Naira Policy: Workers urge CBN to revisit cash withdrawal limits

*The Nigeria Labour Congress argues the Central Bank of Nigeria’s cash withdrawal limits means the businesses will suffer from cash starvation shock, and mostly informal economy players, especially the rural dwellers, ‘will not likely survive’ the Naira redesign policy in the country

Alexander Davis | ConsumerConnect

Against the backdrop of the recent launch of new Naira denominations and announcement of cash withdrawal limits to Deposit Money Banks (DMBs), Nigerian workers have urged the Central Bank of Nigeria (CBN), to revisit the policy on withdrawal limits.

Comrade Ayuba Wabba, President of the Nigeria Labour Congress (NLC), made the request via a  statement issued Friday, December 23, 2022.

Photo collage of Mr. Godwin Emefiele, Governor of CBN, and new Naira notes

Wabba said Nigerians, especially workers received the CBN’s recent policy on withdrawal limits that puts a ceiling of N100,000 per week for individual cash withdrawals and N500,000 ceiling for corporate cash withdrawals with disconcerting concerns.

However, ConsumerConnect had reported that the Bankers’ Bank in a recent circular released effected upward reviews of the cash withdrawal limits.

The CBN announced the adjustments comprised N500,000 for individuals and N5million for corporate or companies.

The Bank had said: “The maximum weekly limit for cash withdrawal across all channels by individuals and corporate organisations shall be N500,000.00 and N5,000,000.00 respectively.”

The CBN stated that the latest directive on cash withdrawal limits would become effective from January 9, 2023, as it explained the adjustment was based on feedback received from stakeholders after its initial announcement on December 6 this year.

The NLC also stated that the fiscal policy, which on paper appears to target the rich especially unscrupulous ones who manipulate the system to launder money has now become a case of trying to kill a fly with a machine gun.

Wabba noted that the truth is that Nigerians, particularly rural dwellers, are the ones feeling the full heat of this monetary policy.

He said: “First, the Nigerian economy is largely informal and substantially rural as a far greater majority of our people live in rural locations.

“The impact of this policy can be easily felt in rural markets where agricultural commodities, livestock, and farm produce are traded.

“Second, it is general knowledge that most rural places in Nigeria are bereft of modern banking services.

“A few instances would help paint a clearer picture. In Yobe State, there are only 4 local governments that have the presence of fully functional banking facilities.

The President of NLC noted: “In Borno State with 27 Local Government (Areas), there are only about four local councils where conventional deposit money institutions operate.

“Third, most rural dwellers and informal economy operators in areas starved of formal banking services rely heavily on cash for their daily business transactions.

“These cash transactions are usually conducted with Point of Sale (PoS) machines.”

Businesses, rural dwellers will suffer from cash starvation shock: Wabba

The Labour leader also argued that the imposition of cash withdrawal limits by the CBN means that these businesses would suffer from cash starvation shock and most would not likely survive it.

He further stated: “The implication is that many more Nigerians would be thrown under the poverty bus.

“Fourth, it has been estimated that there are over 18 million POS informal economy workers in Nigeria.

“There is no gainsaying the fact that this policy by the CBN will put majority of them out of business and rob their families their daily subsistence.

“With the galloping rate of multidimensional poverty in Nigeria especially rural poverty, the impact of this policy for millions of Nigerians is really scary!”

According to Wabba, “fifth, while this policy punishes the poor, the rich especially the unscrupulous ones would hardly feel the pinch of this fiscal regulation.

“It is an open secret that many of the very rich people in Nigeria run private banks in their houses.

“There have been several instances where humongous stash of cash had been unearthed in many private homes in Nigeria during criminal investigations.”

The Labour said: “Also, many of those targeted by this policy who have cash in their bank accounts have the means to induce bank officials to circumvent this policy and still withdraw as much cash as they want without any consequence or in extreme cases can easily pay the prescribed fine.

“Overall, we wish to draw the attention of the Central Bank of Nigeria to the disruptive impact of its recent policy on cash withdrawal limits especially given its counter-productive effect on CBN’s commendable drive for financial inclusion.

“This policy would emasculate many small businesses and informal workers from formal financial circles.

“This would be antithetical to the Federal Government’s drive to rescue millions of Nigerians currently trapped under the ruins of poverty.”

He also stated, that “given the dearth of consultations with stakeholders prior to the public announcement of this policy, we believe that this policy is largely knee-jerk in nature and should be immediately reviewed or completely withdrawn.

“The truth is that this policy poses an abiding threat to the livelihood of millions of Nigerians and their families.”

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