Victor EzejaThe Central Bank of Nigeria’s new cash withdrawal limits for daily and weekly transactions is unsustainable but will speed up cashless policy adoption by Nigerians. Dr Marcel Mbamalu, CEO of Newstide Publications Limited, publishers of Prime Business Africa, expressed this view on Wednesday morning’s newspaper review segment of the Sunrise Daily programme of the Channels Television.
The apex had, on Tuesday, December 6, 2022, directed all Deposit Money Banks in Nigeria to implement new daily and weekly cash withdrawal limits for individuals and corporate organisations.
Join our WhatsApp ChannelThe directive was also extended to other financial institutions, including Payment Service Banks (PSBs), Primary Mortgage Banks (PMBs) and Microfinance Banks.
The new withdrawal policy meant that the CBN set N100,000 as maximum amount that can be withdrawn by individual account holders; while corporate account holders can only withdraw N500,000 per week.
The CBN also set N20,000 daily limit for Automated Teller Machine (ATM) terminals and mobile money agents, adding that banks are only allowed to load N200 notes.
The new policy for cash withdrawals will take effect when the redesigned naira notes are released for use.
But Dr Mbamalu says that the new measure is unrealistic but will limit the use of cash and spur the masses to quickly key into the cashless policy drive of government by adopting electronic channels for transactions.
Dr Mbamalu who joined Channels TV presenters – Chamberlain Usoh, Maupe Ogun Yusuf and Kayode Okikelu – during the early morning newspaper review, agreed that the new cash withdrawal limit is not realistic, given the centrality of cash usage in transactions, especially in the informal sector.
He said the economic problems on ground and Nigeria’s currency management challenges as highlighted by the apex bank could have pushed monetary policy managers to take the bull by the horn, but warned that the move could present new economic challenges for citizens.
“I know it’s not sustainable but I’m telling you that the situation is worse than you see. If you talk to monetary policy managers, they will tell you that it’s really more serious than we think,” Mbamalu stated.
He noted that the new rule on cash use suggests a continuation of CBN’s liquidity-tightening measures to tame underground financial activities involving terrorism financing and other unwholesome activities like possible vote-buying in the 2023 general elections.
The media entrepreneur, who had over two decades of journalism experience in reporting Business and financial matters, observed the inflation which the financial regulatory authority is trying to deal with might actually get worse. Citing an instance of what happened in the 1980s and when new naira notes were once reintroduced, he said there could be scarcity of new notes leading to artificial price disparities for purchasing items with new and old notes.
He further noted that though the policy would come with pain for the masses in the interim, it could be for the good of all in the long term.
“I think what the CBN is trying to achieve is to ensure that people buy into the cashless policy and do more transactions electronically.
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“Of course, it is going to be problematic at the beginning, but it should be gradual. What is happening is a reflection of the challenge they are having right now, managing money in circulation. It is sad that they are comfortable passing the buck to Nigerians, but I believe that over time, things will gradually sit right.”
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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