…Summon Emefiele for explanation
…I have Buhari’s backing — Emefiele
…Says CBN won’t be rigid, but not to reverse policy
The Central Bank of Nigeria (CBN) may have come under the force of political blows over its recent N100,000 weekly cash withdrawal limit, as the House of Representatives citing socio-economic impacts at plenary on Thursday ordered the Governor of the Apex Bank, Mr. Godwin Emefiele to suspend implementation of the policy.
Consequently, the CBN Governor was summoned to make an appearance Thursday next week to justify the significance of the new policy and explain its impacts on the economy, while the suspension is to last pending the outcome of the expected engagement with the House in compliance with the relevant sections of the CBN act and the 1999 constitution on the monetary policies of the apex bank.
Recall that in a memo issued on Tuesday, signed by the Director of Banking Supervision, Haruna Mustafa, the apex bank directed all banks and other financial institutions to ensure that over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100,000 and N500,000, respectively, per week.
In the new development, CBN directed that only N200 and lower denominations should be loaded into banks’ ATM machines.
The resolution of the lower chamber of the National Assembly to summon the Apex bank Governor followed a motion of matter of urgent public importance moved by Aliyu Magaji (APC Jigawa) on Thursday during plenary.
While the minority leader, Hon. Ndudi Elumelu supported the CBN policy on the ground that it will curb banditry and kidnapping, as well as reduce the incidence of corruption, other lawmakers who spoke, vehemently condemned the decision of the CBN.
In the motion, Magaji argued small businesses, which are the major drivers of the economy, depend on cash for transactions, maintaining that the entrepreneurs would be negatively impacted by the policy.
He stated that though the CBN has the statutory power to implement monetary policy, however, the policy will have a negative impact “on the already dwindling economy.”
“Although the Central Bank of Nigeria has the right to issue monetary policies on the Nigerian economy to be able to guide and direct the economy to the right part of recovery and growth, however, the new policy rolled out by the Central Bank of Nigeria (CBN) will definitely have a negative impact on the already dwindling economy, and further weakens the value of the Naira as Nigerians may resolve to use dollars and other currencies as a means of trading and thus further devalue Naira and weakens the economy,” he argued.
The lawmaker further stated that most rural dwellers fall within the unbanked, hence, the policy will impact their economic activities.
“It is good to have a cashless policy but we seem to be borrowing ideas and policies from other countries that are far ahead of us. We are comparing ourselves with the United States and the United Kingdom. These people are far ahead of us. We will get there one day but this type of policy disturbs the people that voted for us.
“The issue affects everyone, most of our people are in rural areas and everything is being done in Naira and cash. And somebody will wake up and make a policy that will start tomorrow, no consultation,” he stated.
Speaking in support of the motion, Aminu Suleiman (APC, Kano), who said if allowed to succeed the CBN policy could be their “exit board,” said CBN appears to be too distanced from the people with the policy.
“This could be an exit board for many of us if we allow this radical decision to succeed and, therefore, my voice must be heard on this.
“There are several government chief executives in this country that have outlived the essence of their positions because I cannot simply understand how we can wake up one day and introduce this draconian approach to businesses, giving Nigerians one month to adjust their belts,” Suleiman stated.
The motion was opposed by the Minority Leader, Ndudi Elumelu (PDP, Delta), who defended the CBN’s policy and described it as the best thing to happen to the country.
“If you go to the communities today, they will ask them to contribute money. It is because there is cash everywhere.
“If you want to stop banditry, make it impossible for them to have cash, there should not be available cash for them,” he said.
Elumelu argued that the CBN is acting within the CBN Act, a law made by the same federal lawmakers.
“We passed the law on this floor, it is our law. The fact that the CBN has been sleeping all this while and never went into the law we passed and to follow it to the letter does not mean that it was not there.
“They are only now waking up to implement the law we sent to them. If we want to amend it, we have to amend the law. it will not come by a resolution and that is the truth,” he argued.
Another lawmaker, Dachung Bagos (PDP, Plateau) who also supported the policy based on security, however, urged the House to get an explanation from the CBN governor on the policy.
In opposition, a lawmaker, Mark Gbillah (PDP, Benue) raised a point of order that the CBN Governor violated Section 8 subsection 4 of the CBN Act by not informing the House about the implementation of the policy.
He explained that the CBN Act mandates the CBN governor to brief the National Assembly bi-annually on its polices and programmes.
“The Governor shall appear before the National Assembly at semi annual hearings, as specified in subsection 1 regarding efforts, activities, objectives and plans of the board with monetary policy and economic development and prospects for the future,” section 8(4) reads.
Gbillah added that subsection 5 also says that “the governor shall from time to time make a formal report and presentation on the activities of the board and the performance of the economy to relevant committees of the National Assembly.”
Before putting the motion to question, the Speaker, Femi Gbajabiamila, said he will interface with the President of the Senate, Ahmad Lawan, on a possible joint session.
He added that if a joint session is not possible, the CBN Governor should appear before the House.
“If you want to comply with the Act, ordinarily he should be appearing before the whole National Assembly. I think you will allow me to speak to the Senate President and see whether, in compliance with the Act, we can have a joint session,” he said.
When the motion was put to question by the Speaker, members overwhelmingly supported and passed it.
Consequently, the Speaker upon confirming from some members of the relevant Committees of the House on the absence of Emefiele for the briefings, relied on the sections of the laws so quoted to sustain the point of order.
He eventually heeded to the prayer of the substantive motion and ruled that Emefiele be summoned to brief the House next Thursday.
…I have Buhari’s backing — Emefiele
Meanwhile, the CBN Governor on Thursday, said that the policy on cash withdrawal limit was not targeted at anybody, but to strengthen the nation’s economy.
Emefiele who stated this while speaking with State House correspondents after meeting behind closed-doors with President Muhammadu Buhari in Daura, Katsina State, assured that the apex bank, following criticism from lawmakers and key stakeholders, will not be rigid on the policy and may not reverse it.
He argued that more countries embracing digitisation have gone into cashless system and Nigeria should not be left out.
Emefiele, who said he visited Daura to greet Buhari and to brief him about happenings in the Central Bank and the economy, revealed that he has the President’s backing on the policies of the bank.
He said President Buhari was very happy “and said we should carry on our work, no need to fear, no need to bother about anybody.”
“We can only continue to appeal to Nigerians to please see this policy the way we have presented it.”
On the objection of the Senate to the policy, he said, “Well, the Senate of the Federal Republic is the National Assembly.
“They are legislative arm of the government and from time to time we brief them about what is happening and about our policies and I’m aware that they have asked for some briefings and we will brief them.
“But I think it’s important for me to say that the cashless policy started in 2012.
“But almost three to four occasions we had to step down the policy because we felt that there is a need for us to prepare ourselves and deepen our payment system infrastructure in Nigeria.
“Between 2012 and now 2022, almost about 10 years, we believe that a lot of electronic channels have been put in place that will aid people in conducting banking and financial service transactions in Nigeria.
“We heard about people talk about some of the people in the rural areas and the truth is that even online banking; as I was coming out to Daura, I saw a kiosk that has super agent today.
“It’s because of the way we felt that there was a need for us to deepen the payment system infrastructure.
“We have 1.4 million super agents that are all over different parts of the country, all local governments, and all villages in this country.
“And I have told my colleagues, some of their names are already on the CBN website and we will publish all the names of all the super agents.
“And having super agent which is different from the banks, which is different from microfinance banks, which is different from other financial institutions, having 1.4 million of them is as good as having 1.4 million banking points where people can conduct services.
“We think, Nigeria as a big country, the biggest economy in Africa, that we need to leapfrog into the cashless economy.
“We cannot continue to allow a situation where over 85 per cent of the cash that is in circulation is outside the bank. More and more countries that are embracing digitisation have gone into cashless.
“We will be reviewing from time to time how this is working because I cannot say that we are going to be rigid. But it is not to say that we will reverse, it is not to say that we will change the timing, but whether it is about tricking some amount to be a little bit higher or a little bit lower, and all the rest of them.
“We will do so because we are humans, we want to make sure that we make life good for our people.
“We do not want to make life difficult for them. So, there is no need for anybody to worry, the Central Bank is monitoring what is happening and I can assure everyone that we are up and alive to our responsibilities and we will do what is right for Nigeria and Nigerians.”
On the new Naira notes, he said, “I can only just assure you that it will go round. Let us just be calm, luckily the old currency continues to be legal tender till January 31, 2023.
“So, I want to crack a joke, both the painted (new notes) and unpainted (old notes) will operate concurrently as a legal tender.
“But by January 31, the unpainted one will not be useful you again, so please take it to your bank as quickly as possible.”
According to a new memo to banks issued on Tuesday and signed by the Director of Banking Supervision, CBN, Haruna B. Mustafa, individuals will only be able to withdraw N100,000 per week (from over the counter, Point of Sale Machines or the Automated Teller Machines), while organisation can access N500,000 per week.
The memo had read: “Further to the launch of the redesigned naira notes by the President, Major General Muhammadu Buhari (retd.), on Wednesday, November 23, 2022, and in line with the cashless policy of the CBN, all deposit money banks and other financial institutions are hereby directed to note and comply with the following:
“The maximum cash withdrawal over the counter by individuals and corporate organisations per week shall henceforth be N100,000 and N500,000 respectively. Withdrawals above these limits shall attract processing fees of 5 per cent and 10 per cent, respectively.
“Third-party cheques above N50,000 shall not be eligible for payment over the counter, while extant limits of N10,000,000 on clearing cheques still subsist.
“The maximum cash withdrawal per week via Automated Teller Machine shall be N100,000 subject to a maximum of N20,000 cash withdrawal per day.
“Only denominations of N200 and below shall be loaded into the ATMs.
“The maximum cash withdrawal via the point of sale terminal shall be N20,000 daily.
“In compelling circumstances, not exceeding once a month, where cash withdrawals above the prescribed limits are required for legitimate purposes, such cash withdrawals shall not exceed N5,000,000.00 and N10,000,000.00 for individuals and corporate organisations, respectively, and shall be subject to the referenced processing fees in (1) above, in addition to enhanced due diligence and further information requirements.
“Further to (6) above, you are required to obtain the following information at the minimum and upload same on the CBN portal created for the purpose:
“a. Valid means of identification of the payee (National Identity Card, International Passport, Drivers License.). b. Bank Verification Number of the payee. c. Notarised customer declaration of the purpose of the cash withdrawal. d. Senior management approval for the withdrawal by the Managing Director of the drawee, where applicable. e. Approval in writing by the MD/CEO of the bank authorising the withdrawal.
“Please further note the following: i. Monthly returns on cash withdrawal transactions above the specified limits should be rendered to the Banking Supervision Department. ii. Compliance with extant AMUCFT regulations relating to the KYC, ongoing customer due diligence and suspicious transaction reporting etc., is required in all circumstances. iii. Customers should be encouraged to use alternative channels (internet banking, mobile banking apps, USSD, cards/POS. eNaira, etc.) to conduct their banking transactions.”