Barring any last minute change, the House of Representatives is set to insist on the reversal of the cash withdrawal limit policy of the Central Bank of Nigeria (CBN), Daily Trust gathered last night.
A ranking lawmaker told this paper that it is the general opinion of the lawmakers that the policy be reversed.
This is just as a former governor of Sokoto State, Senator Aliyu Magatakarda Wamakko (APC, Sokoto) has urged President Muhammadu Buhari to sack the CBN governor, Godwin Emefiele, over the policy.
The apex bank, under the new withdrawal policy was restricted the maximum cash withdrawal over the counter (OTC) by individuals and corporate organisations per week to N100,000 and N500,000 respectively.
Following the uproar that trailed the policy, the apex bank on Wednesday reviewed the withdrawal limit upward to N500,000 for individuals and N5 million for corporate bodies.
Daily Trust reports that the lower chamber had earlier passed a resolution asking the bank not to proceed with the implementation of the cash withdrawal limit, which is due to come into effect from January 9, 2023 until the CBN governor appears before it to clarify issues on the new policy.
Deputy Governor of the CBN in charge of Financial Stability, Aisha Ahmad, yesterday appeared before the House of Representatives to brief lawmakers on the policy.
But after the briefing and responses to lawmakers’ questions by the CBN deputy governor, Speaker Femi Gbajabiamila did not make any ruling, saying the House will deliberate on the briefing by the apex bank and come up with its resolution.
A lawmaker who spoke to Daily Trust yesterday, said a decision will be taken on the matter next week.
The lawmaker who spoke on condition of anonymity, said it is the general opinion of the lawmakers that the policy be reversed.
“Yes, next week we will take a stand. But, they have contravened a provision of the CBN Act, which requires the Central Bank to consult and discuss with the National Assembly before initiating or implementing any policy.
“They must come to the National Assembly and discuss with the lawmakers.
“The CBN must always come; we discuss the merits and demerits of their policies. It must be reversed. It wouldn’t hold. We will sanction them, but, one; they must first reverse the policy and we then look at the issue. Aside from the reversal, the bank would be sanctioned for violating its Act,” he said.
Why policy is essential – CBN
Speaking earlier, the CBN deputy governor told the lawmakers that the cashless policy of the apex bank was first launched in 2012 under the CBN’s mandate in Section 2(d) and 47 of the CBN’s Act.
She said the policy was not intended to disenfranchise anyone particularly those in vulnerable situations, rural areas and markets, adding it was meant to bring everyone into the significant economic opportunity.
She said the policy pronouncement of the apex bank on December 5 was a continuation of the cashless policy that was started 10 years ago, adding that it was in recognition of the positive changes that have happened in the financial and payment system since the cashless policy was first launched.
“Some of these changes included a wide proliferation of financial access points. In 2012, thereabouts, we were still talking about bank branches as the only source of access to financial services. Today, we have a very robust payment system that includes bank branches; branches of micro-finance banks, POS machines, ATM machines, agent banking, E-Naira and many other options.
“To be specific, between the bank and the micro-finance banks, we have 6,500 locations, 900,000 POS terminals, 14,000 ATMs across the country and 1.4 million agents nationwide and every single local government in Nigeria has agents represented. We also have a proliferation of electronic transactions. Just by way of quick example, in 2012, we had N48 billion in POS transactions. Today, we have N6 trillion in POS transactions.
“On electronic transfers, we had N3 trillion in 2012. Today, we have 300 trillion as of October, 2022. That’s a 7,000 per cent increase. We have also seen an improvement in financial inclusion to 54.1 per cent and lastly, perhaps, more importantly, we have seen the evolution of the Nigerian payment system on the global stage.
“Nigeria is ranked 6th in the world for instant real payment and we are only behind countries like India, China, Thailand, Brazil and South Korea. We are the only African country in the top 10 and this has been as a result of some of the initiatives that have gone on. Also, electronic payment and real time data payments have been estimated to contribute about 0.67 per cent to our GDP.
She told the lawmakers that the essence of the cashless policy was among others to reduce cash processing cost, minting cost, the cost of destroying old notes and the cost of moving physical cash from place to place.
Lawmakers express concerns
Speaker Femi Gbajabiamila expressed concerns over the failure of the apex bank to brief the House as required by the Section 8 of the CBN Act before proceeding on its policy.
He also said that the apex bank ought to have given an adequate timeline for the implementation of the policy as was the case in the US and the UK.
But responding, the deputy governor said the CBN remains open to continue to engage with the House.
“You talked about comparing our situation with what just happened with the Bank of England; I think when we are making the comparison, consider all the factors; global best practices say you need to redesign your currency every five to eight years. We have not done that in two decades. So, the Bank of England routinely does this. The amount of cash outside circulation in the UK is much lower than what we have today. We have about 80 outside circulation”, she said.
A Borno lawmaker, Satomi Ahmed in his question said there were many wealthy people in his state but there were not enough banks to exchange their old notes and wondered what would be their fate.
But responding, Ahmad said Borno State has over 52 deposit money banks, 16, 547 locations and 16,000 agents where people can deposit their money.
Rep Ali Shettima from Yobe State, also expressed concern over the counterfeiting of the new notes and asked the apex bank over measures being put in place to address it.
On his part, Chinedu Obidigwe from Anambra queried the rationale behind the CBN’s urgency in the implementation of the policy, wondering if it was an opportunity for the ruling party to rig out opposition parties.
Responding, Ahmad said the policy was not politically motivated but done in the best interest of the country’s economy.
Isiaka Ibrahim from Ogun State asked her to speak on the level of advocacy and public enlightenment on the new policy, saying many Nigerians were not yet carried along.
Responding, she said that the apex bank is collaborating with the National Orientation Agency (NOA) to enlighten Nigerians at the grassroots on the apex bank’s cashless policy.
Rep Sada Soli from Katsina in his question raised concerns over the non-availability of the redesigned notes days after they were released to the public and asked her to disclose the quantities of the notes printed.
Responding, she said the apex bank ordered for printing of 500 million pieces of the redesigned notes from the Mint.
She however did not give the breakdown of the figures for each denomination and the amount spent on the printing.
Rep Tolulope Sadipe from Oyo State sought to know the fate of over 1.4 million POS agents in the country in view of the new policy.
Responding to this, she said “I believe that the reversed limit that we have actually takes the agents into consideration and from the data that we received from the agents themselves, in terms of transaction size is less N2.5 million so they will not be affected.
Rep Dennis Idahosa while expressing support for the policy, however, urged the CBN to address the concerns raised by the House to ensure the policy works well.
Wamakko urges Buhari to sack Emefiele
Meanwhile, a former governor of Sokoto State, Senator Aliyu Magatakarda Wamakko, has urged President Buhari to sack the CBN governor.
In a phone interview, he said the policy was capable of causing confusion in the country.
He wondered why Emefiele would “so disrespectfully impose a policy on Nigerians without, at least public sensitization for one year”, adding that “the CBN Governor thinks Nigerians are stupid to just follow him without questioning”.
He further explained that by the naira redesign and cash withdrawal limits, Emefiele was “grossly unfair to the federal government”.
Wamakko said all Nigerians of good conscience should call out Emefiele over what he called, “thoughtless monetary policy direction, otherwise President Buhari should immediately sack him before he plunges the country into chaos”.
The lawmaker questioned where Emefiele would get the appropriate infrastructure for efficient digital transactions.
By Ismail Mudashir, Itodo D. Sule & Balarabe Alkassim