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‘North is most reliant on cash’ — ACF faults CBN’s withdrawal limit policy

The Arewa Consultative Forum (ACF) says the implementation of the Central Bank of Nigeria‘s (CBN) policy on cash withdrawal limit will result in the catastrophic collapse of the informal sector.

On December 6, the CBN directed deposit money banks and other financial institutions to ensure that weekly over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100,000 and N500,000, respectively.

The policy is expected to take effect nationwide from January 9, 2023.

In a statement on Friday in Kaduna, ACF said the CBN may have had the best of intentions while initiating the policy, but failed to consider its extreme consequences on the informal sector.

The statement signed by Murtala Aliyu, secretary-general of the forum, said the policy was well justified since cash-based economies were “notoriously costly, inefficient and prone to attacks by evil people”.

“A huge amount of time and money is needed to print the currency and a lot more still to steer it through the system,” the statement reads.

“The currency notes themselves have a shelf life after which they have to be replaced. Cash is the lifeblood of the underworld: difficult to trace and quite convenient for terrorists, money launderers, smugglers, vote buyers, etc.

“So, yes, the less cash available for all these criminals as the CBN is trying to achieve, the better for law-abiding citizens.

“That said, we do need to remember that the road to hell is paved with good intentions.

“CBN officials may have the best of intentions while contemplating this policy but evidently failed to consider the unintended consequences of implementing it in the way they have planned; consequences that may be extremely grave.”

ACF described the policy as “unrealistic”, saying cash remained the major medium of exchange for most Nigerians, particularly those in the north.

“If the CBN insists on implementing this wholly unrealistic policy of restricting individual’s cash withdrawal from the banks to N20,000 per day and N100,000 for a week or N500,000 in the case of corporate bodies, it won’t be long before we suffer a catastrophic collapse of the informal sector of the economy,” it said.

“More than anyone, CBN knows that transactions in commodity markets especially in the rural areas are entirely cash-based.


“The villager that brings to the market his chickens, beans, onions, goat or cows does not typically have a bank account or internet skills.


“Cash remains the overwhelming medium of exchange for much of the country, particularly in the North.

“This should surprise no one as bank offices are largely unavailable even for people who are keen and have the skills to use them.”


The group, citing CBN’s report, said over 38 million adults in Nigeria do not currently have access to banking services “with women, rural dwellers, micro, small and medium-sized enterprises and northern Nigeria being among the most disproportionately excluded”.

“And despite its pious pretensions, it is on record that the CBN, under the present management, apparently out of desire to safeguard the interests of the commercial banks, has done much to undermine and stifle the progress of financial inclusion in Nigeria,” ACF added.

“Thanks to the decisions taken by the CBN, Nigeria today, despite its size, has the dubious record of having the lowest financial penetration in all of Africa, perhaps in the world.

“Under the circumstances, the CBN will do itself and the country a world of good if it invests more efforts at addressing these challenges.”

ACF urged the CBN to ensure the establishment of sufficient financial institutions in all parts of the country.

“It should allow a level-playing field for a wide range of financial providers and encourage partnerships between them,” it said.

“Furthermore, the CBN must enforce strict regulations that protect people’s money. It must inform, encourage and prepare the public adequately for the transition.

“Until the CBN is able to address these challenges substantially, a preemptive move or a ‘frog-jump’ into a cashless payments system, however well intentioned, will only land us into a bottomless pit.”




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