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Cash withdrawal limits of N100,000 have been in place since 2012, the CBN informs the Senate.

THE Central Bank of Nigeria, or CBN, informed the Senate on Friday that the planned policy to limit cash withdrawals for individuals at N100,000 and corporate bodies at N500,000 per week was first introduced in 2012 during the administration of the former President Goodluck Jonathan and expanded to Abuja and six other States in 2013.

The Deputy Governor of CBN on Financial System Stability, Mrs. Aishat Ahmad, said yesterday during her appearance before the Senate Committee on Banking, Insurance, and Other Financial Institutions, which is chaired by Senator Uba Sani, APC, of Kaduna Central, that the cashless policy being fully implemented by CBN now is not new, as necessary steps in that direction were taken in 2012 with Lagos State as a pilot scheme and Abuja and Six Other States in 2013.

However she added that the Apex Bank was accommodating and would be open to suggestions that wouldn’t make the policy burdensome for any group of Nigerians throughout execution.

She made her disclosure shortly after controversies erupted over the apex bank’s proposed policy.

The CBN Deputy Governor testified yesterday during the Senate Committee on Banking, Insurance, and Other Financial Institutions’ screening process for re-appointments of her and her Corporate Services counterpart, Edward Lametek Adamu.

Although the CBN has not yet fully implemented the policy since its introduction, Ahmed noted that it has significantly changed the banking and payment systems. She continued, “Distinguished Chairman of this committee and members, I’m happy for the opportunity given to make presentations on planned N100,000 withdraw limits for individuals and N500,000 for Corporate Bodies per week, beginning on 9th January 2023, in line with the CBN’s policy.”

“Based on information available to CBN, the time for full implementation of the policy with proposed limit on  cash withdrawals per week is now.

“Required infrastruture for its implementation in terms of financial access point system , mobile money , e – naira  etc ,  are available across the 774 local government councils in the country.

“All fears and worries being expressed by Nigerians on the planned limited cash withdrawal policy are seriously being taken care of as nobody or section of Nigerians , will be left out.

“In the past , banking transactions in Nigeria was limited to Bank Branches alone as the only means , which has now expanded into multiple electronic platforms  as well as geometrical increase in the number of agents from 88,000 to 1.4million.”

Following the presentation, the two nominees were given the “take a bow and go” treatment by the chairman of the committee, Sen. Uba Sani, on a motion made by the whip of the senate, Sen. Orji Uzor Kalu, APC, of Abia North, and seconded by Sen. Danjuma Goje, APC, of Gombe Central.

“With presentation made by the Deputy Governor of CBN on Financial System Stability, Aisha Ndanusa Ahmad on the planned limited cash withdrawal, required information on the merits of the policy has been given,” Senator Uba Sani said in his remarks. “This information will be communicated to the Senate in plenary through our report.”

“The two Deputy Governors , having earlier been screened before serving their first tenures , need not to again as unanimously agreed by members of the Committee. They should therefore take a bow and go.”

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Cash Withdrawal Limits: Senate Grills CBN Chiefs Friday

The Senate will on Friday grill two deputy governors of the Central Bank of Nigeria over the cash withdrawal limit policy unveiled by the apex bank on Tuesday.

The red chamber planned to seek clarifications on the new directive which restricts over-the-counter cash withdrawal by individuals and organisations to N100,000 and N500,000, respectively, per week.

It also limits cash withdrawals via point-of-sale machines and automated teller machines to N20,000 daily and N100,000 weekly, respectively.

According to a memo signed Tuesday by the CBN’s Director of Banking Supervision, Haruna Mustafa, withdrawals above the thresholds would attract processing fees of five per cent and 10 per cent, respectively, for individuals and corporate entities going forward.

In addition, third-party cheques above N50,000 shall not be eligible for OTC payment while extant limits of N10m on clearing cheques still remain.

The circular also directed banks to load only N200 and lower denominations into their ATMs and restricted withdrawal to N20, 000 per day from ATMs.

The policy which will become effective on January 9, 2023, had generated criticisms but the CBN clarified on Wednesday that PoS operators could apply for waivers.

Deliberating on the policy on the floor of the Senate on Wednesday, senators said there was a need to debate the policy on the floor of the red chamber.

However, the Senate President, Ahmad Lawan, directed the Senate Committee on Banking to grill the two re-appointed deputy governors of the CBN, Aisha Ahmad, and Edward Adamu, who will be screened on Friday, on the new cash withdrawal policy.

Senators raise motion
The resolution on the new CBN policy followed a move by Senator Philip Aduda (PDP FCT) to move a motion on the development.

Aduda had sought to rally other senators to deliberate on the policy but the Senate President, Lawan, interrupted him, saying it was too early to debate the circular.

Also, Senator Gabriel Suswam (PDP Benue North-East) supporting his colleague and pushed that the motion should be allowed to fly considering the innocent Nigerians that would be affected by the CBN policy.

Addressing Lawan, he said, “I think you should have allowed us to discuss this motion for the sake of Nigerians.”

But Lawan, who appeared not to favour the move, stopped Aduda and Suswam, saying, “No, distinguished (Senators), there is a misunderstanding here. I told you what my personal opinion is. My personal opinion is that this weekend is off. Maybe but we have an opportunity; the Committee on Banking will be screening two deputy governors of the CBN. This is one major issue they should raise with them.

“As good as the cashless policy may be, it shouldn’t be jumped at, at once. The way the CBN is going about the policy, many Nigerians would be cut off and that won’t be accepted. Motion on the policy will be thoroughly debated in the Senate on Tuesday next week after adequate information has been gotten on it.”

Lawan noted that the newly re-appointed deputy CBN governors would be screened between Thursday and Monday so that by Tuesday, they would have been equipped with enough information to raise a motion in support or shoot down the policy.

He said, “Before Tuesday next week, our committee on Banking, Insurance and other Financial Institutions mandated to screen the re – appointed deputy governors of the Central Bank should focus its questions on the planned policy.

“The CBN deputy governors must be thoroughly grilled on the policy after which extensive debate on it will be made by Senators on Tuesday next week.”

However, the lawmaker representing Kaduna Central and Chairman of, Senate Committee on Banking, Insurance and other Financial Instructions, Senator Uba Sani confirmed to The PUNCH that the CBN deputy governors would be screened on Friday.

He said, “We are working on their letters, the letters will be served tomorrow (Today)  and the deputy governors of the CBN will be screened on Friday.’’

President Muhammadu Buhari had on Tuesday sent for screening and approval the names of the two CBN deputy governors.

PoS operators get a waiver. The Director of Corporate Communications of the Central Bank, Mr Osita Nwanisobi, has said that Point-of-Sale operators can take advantage of an exemption to request more cash beyond the new limit.

Ppeaking with one of our correspondents on the phone, he noted that there is an exemption stipulated in the newly released circular, which PoS operators can take advantage of, based on the requirements and in line with the number of transactions they process.

He said, “The circular is very clear. If you are doing PoS, it is an online and mobile transaction. Whenever cash is involved, then there is a limit. However, there is an exemption in the circular, which PoS operators can apply for based on the volume of their transactions.”

Following the new directive, the National President, the Association of Mobile Money and Bank Agents of Nigeria, Victor Olojo, had said that PoS operators would protest against the policy which he said was targeted at killing their livelihood.

Olojo argued that the cash limit would harm their business as it translated to shutting down PoS terminals.

However, there was an exemption that allows up to N5m for individuals and N10m for corporate organisations once a month but with certain requirements.

To enjoy the exemption, banks were required to obtain some information from the drawee and upload the same on the CBN portal created for the purpose.

The requirements include a valid means of identification such as the National Identity Card, international passport, or driving licence; the Bank Verification Number of the payee; notarised customer declaration of the purpose of the cash withdrawal; senior management approval for the withdrawal by the managing director of the drawee where applicable and approval in writing by the MD/CEO of the bank authorizing the withdrawal.

According to the guidelines, monthly returns on cash withdrawal transactions above the specified limits will be rendered to the banking supervision department.

Also, compliance with extant anti-money laundering and countering the financing of terrorism regulations relating to Know Your Customer, ongoing customer due diligence and suspicious transaction reporting are required in all circumstances.

On the likely effect of the policy on the people in the rural areas, who regularly deal with cash, Nwanisobi said, “The policy only states that you cannot go beyond a particular limit. It doesn’t stop anybody from using cash. So, those in the rural area can still transact with the available cash.”

Group kicks

Meanwhile, the South-South Agenda for Tinubu/Shettima Support Groups has condemned the CBN policy in strong terms, describing it as a plot to pitch the poor masses against the President.

In a statement on Wednesday signed by the National Coordinator of the group, Mr. Bitrus Oliver, it argued that Nigeria is one of the top three unbanked countries in the world with more than 60m of its adult population still unbanked.

The group stated, “This policy will clearly undermine the efforts of the Federal Government in sustaining micro and small scale enterprises across the country as it will limit the fund in circulation due to the non-availability of cash and may totally asphyxiate small and struggling businesses before the policy is stabilized.

“When people find it difficult to withdraw enough money they need from the bank and are repeatedly unable to complete transactions due to lack of funds, there may be public outrage and a massive backlash on the president for allowing the policy.

“The new withdrawal policy will be able to put money politics in check within the (election) period, it also has the capacity to wreck many local economies across the country due to the paucity of cash it will create.”

Oliver argued that in almost all the rural markets across the country, 90 per cent of transactions are done by cash and not by mobile transfer, noting that pegging ATM withdrawal to N20,000 would stall many transactions and may even trigger chaos in the commercial sector.

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PWC and Proshare warn the FG of the negative effects of the SOFT DRINKS TAX.

PricewaterhouseCoopers, PwC, the top management and financial consulting firm in the world, has urged the Federal Government to improve the difficult operating environment in the nation before enacting the proposed 20 percent excise tax on soft drinks. This is done in order to prevent the manufacturing sector’s collapse, the loss of jobs, and additional suffering for Nigerians at the bottom of the economic ladder.

Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PwC, commented on the existing tax burden on the beverage industry and the proposed new tax. He also said that the government should take into account the poor and the impact of the policy on the economy, regardless of the recommendations made by the World Bank, IMF, or ECOWAS committee.

He said: “We know the government needs money because it does not have enough to fund critical infrastructure, overheads and the rest of them. However, the best thing to do is to strike a balance. That delicate balance, as to what you task, what rate of tax would be appropriate and when should you impose that tax”?

Olufemi Awoyemi, the founder and chairman of Proshare Limited, also commented on the matter. He said that while he agrees that the government needs money, the ad-valorem tax is the only explanation that is illogical.

He claimed that the N10 per litre excise tax on non-alcoholic beverages that soft drink companies have paid is a tax on both production and consumption, and that it has a negative knock-on effect on manufacturers who in turn have trouble passing along the cost of their goods to consumers.

“If the revenue of the manufacturing companies declines, with the -25 percent already being experienced, there would be a layoff of workers, and it would lead to many other macroeconomic headwinds”.

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World Bank Warns Developing Economies As External Debt Hits $9trn, More Than Double Over Decade

The external debt of developing economies has more than doubled from a decade ago to $9 trillion in 2021, the World Bank said Tuesday, warning the debt crisis facing these countries has intensified.

The pandemic has forced many countries to take on more borrowing, and World Bank President, David Malpass has warned that the world is facing a fifth wave of debt crisis.
Many countries are already facing or at risk of debt distress with surging global inflation and rising interest rates.

And global growth is slowing sharply this year, with an increased risk of world recession in 2023 amid “one of the most internationally synchronous episodes of… policy tightening” in 50 years, the World Bank said.

“A comprehensive approach is needed to reduce debt, increase transparency, and facilitate swifter restructuring — so countries can focus on spending that supports growth and reduces poverty,” Malpass added on Tuesday.

Speaking to reporters, he said the combination of high government debt levels and rising interest rates will cause greater absorption of global capital by advanced economies for a longer period.

“For developing countries, this is a grim outlook… access to electricity, fertilizer, food and capital is likely to remain limited for a prolonged period,” he added.

Meanwhile, under-investment in businesses is blocking future growth, Malpass said.

The World Bank said in a release that the poorest countries eligible to borrow from its International Development Association (IDA) now spend more than a tenth of their export revenues to service their long-term public and publicly guaranteed external debt.

This is the highest proportion since 2000, added the Washington-based development lender.

The external debt of IDA countries also nearly tripled in the decade leading up to 2021.

“On the surface, debt indicators seem to have improved in 2021,” the World Bank said, adding that “this was not the case for IDA countries.

“Vulnerabilities underscore an urgent need to improve debt transparency,” the bank said.

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Cash withdrawals limited to N100,000 a week by CBN.

The Central Bank of Nigeria (CBN) has started taking steps to set weekly limits of N100,000 and N500,000 for individual and corporate over-the-counter cash withdrawals, respectively.

It was reported that this was made known in a circular issued by the CBN on Tuesday. According to Nigeria’s apex bank, the new policy will take effect nationwide on January 9, 2023.

The CBN announced that, when the policy goes into effect, processing fees of 5% and 10%, respectively, will apply to all cash withdrawals that exceed the restrictions listed above.

Reports has it that this is coming after President Muhammadu Buhari unveiled the newly redesigned N200, N500, and N1000 banknotes.

Keep in mind that the CBN governor, Godwin Emefiele, disclosed in October that the central bank had lost track of N2.7 trillion of the currency that is currently in use in the nation.

Emefiele claimed that 80% of the nation’s cash was in circulation outside the country’s commercial banks’ vaults and charged Nigerians with hoarding bank notes by refusing to take them to banking institutions.

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BusinessNews & Announcements

Naira Redesign May Be Declared Illegal If Challenged In Court – Falana

Human rights lawyer, Femi Falana, has said the redesign of the naira may be illegal if President Muhammadu Buhari did not seek approval of the national assembly for the funds used for the initiative.

On November 23, Buhari unveiled the new currency notes at the state house, Abuja.

The redesigned naira notes are expected to be in circulation on December 15.

Governor of the Central Bank of Nigeria, Godwin Emefiele, had on October 26 announced the plan to redesign the naira to control the money supply and aid security agencies in tackling illicit financial flows.

Falana, in a statement on Sunday, said the president’s endorsement of the CBN’s naira redesign policy is not legally sufficient.

He said the president should have presented a “money bill” to the national assembly to seek approval for the funds used for the project.

Falana said the expense is not captured in the 2022 budget, adding that the president must comply with the provision of section 59 of the 1999 constitution (as amended).

“However, the official endorsement is not sufficient as the president is mandatorily required to present a money bill to the national assembly for the withdrawal of the billions of naira from public funds earmarked for the printing of the new naira notes.

“Specifically, section 59 of the constitution requires “an appropriation bill or supplementary bill including any other bill for the payment, issue or withdrawal from the Consolidated Revenue Fund or any other public fund of the Federation of any money charged thereon or any alteration in the amount of such payment, issue or withdrawal.

“Since the fund for the printing of the new naira notes is not captured in the 2022 appropriation bill, the president is advised to prepare and present a supplementary bill to the national assembly to authorise the withdrawal of public fund from any account of the federation for printing the new naira notes.

“Otherwise, the printing of the new naira without appropriation by the national assembly may be declared illegal and unconstitutional if it is challenged in a court of competent jurisdiction,” the statement reads.

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BusinessNews & Announcements

Naira depreciates slightly against dollar, trading at 445.83.

The Naira depreciated 0.12% from its Wednesday exchange rate of 445.30 to Thursday’s rate of 445.83 to the dollar at the Investors and Exporters window.

On Thursday, the open indicative rate reached a high of N444.60 to the dollar.

Before it closed at N445.83, the highest exchange rate ever seen during the day’s trade was N447 to the dollar.

In the course of the day’s trading, the naira fell as low as 422 to the dollar.

The naira sold for as low as 422 to the dollar within the day’s trading.

On Thursday, transactions in the official Investors and Exporters window totaled N99.50 million.

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