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FG should educate people on cash limit policy

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By Okunloye Abiodun Segun

The new CBN cash limit policy has raised many questions from the people.

Following the recent introduction of a policy by the Central Bank of Nigeria (CBN), that restricts over-the-counter withdrawals in commercial banks to N100,000 and N200,000 for individuals and businesses per week, respectively, this has caused a great deal of controversy, with many people asking questions such as the reasons for such, and whether it was to promote financial inclusion or to attack politicians. In an effort to maintain a stable exchange rate, the Central Bank of Nigeria (CBN) has always attempted to regulate the naira’s supply and demand. This appears to be yet another of its regulations.

In keeping with its cashless agenda as well as financial inclusion goal, the CBN has clarified that the modified Naira withdrawal policy would synchronize with the release of the latest redesigned naira notes. The withdrawal limit is intended to encourage individuals to conduct more transactions using digital services as well as the e-Naira in place of cash by reducing withdrawals. If the countries move toward a more “cashless” economy, the CBN will have a greater ability to manage both the supply and movement of cash.

The withdrawal limit policy also has tax implications.

According to PricewaterhouseCoopers’ Fiscal Policy Partner and Africa Tax Leader, Taiwo Oyedele, this new cash withdrawing restriction would get tax consequences, in particular, for individuals and MSMEs that rely heavily on cash, will be more transparent to tax authorities as more people are forced to use electronic payments. The government’s part is to raise awareness, particularly amongst entrepreneurs, while the central bank’s role is to ensure collaboration with tax authorities. He added that a Tax Identification Number might be one of the requirements for withdrawals of surplus cash.

Furthermore, Oyedele, who also serves as the Chairman of PwC West Africa’s COVID-19 intervention committee, advised Nigerians to adopt the following activities if they were small business owners: The first is to register with the appropriate tax authorities, including the FIRS as well as the state Internal Revenue Service wherever their business is; create a different bank account for business (or designate one for this use if they have a business bank account already); and avoid mixing personal and business transactions.

Nigerians will suffer the policy aftermath if care is not taken – Adewale.

Journalist and specialist on Industrial Relations and Environment concern Adewale Adeoye has called the new CBN strategy the “Talibanisation of the political economy”. However, he declared that he is in support of a cashless economy but that the necessary conditions first need to be met. Policy proposals in Nigeria often have good intentions but are poorly thought out and executed. He added that the new CBN policy is a type of good policy, but if implemented without first removing the obstacles, it could have unintended negative consequences.

Adewale stated that the strategy would squeeze Nigerians and children to death. Assuming someone Is requested to deposit N50k to perform an emergency operation in a hospital, even when on a sick bed, one has to transfer N20k to a person to purchase medicine from a drugstore and transport himself inside a taxi driven by a person without PoS. He added that most Nigerians see the banks as high-risk businesses and criminal accomplices. Still, the interest rate on savings is around 1.5%. He concluded that saving in Nigerian banks is pointless.

Exchange rates and inflation be stabilized through economic productivity.

On the same, Stears, an intelligence organization that provides subscription-based information for global financial and policy experts, said this cash restriction would constrain their business operations, reduce expenditures, and increase unemployment, as witnessed in India. Agent banking operators are essential for withdrawing cash and financial services in remote regions, which are among the financial inclusion goals. According to the media organization, the CBN’s goal of “strengthening the Naira” can be linked to this withdrawal policy. Stears concluded that the only way to stabilize exchange and inflation rates is to boost economic growth.


Related Link

CBN: Website

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Admin
9 months ago

FG should educate people on cash limit policy – The new CBN cash limit policy has raised many questions from the people. – Express your point of view.

DimOla
DimOla
Member
9 months ago

The policies created to strengthen the Naira will only make life unbearable for Nigerian in general. Incase of emergency how do we survive. CBN need to amend this policy to align with our daily livelihood. This policy will put may out of business if not thought through.

Abusi
Abusi
Member
9 months ago

There is need for the government to enlighten the people on this withdrawal limit, and it will also affect a lot of businesses. If it will happen, then must not be problem with bank transfers.

Adeolastan
Adeolastan
Member
9 months ago

There lots of advantages and disadvantages with this newly introduced policy from the CBN but the disadvantages will be more,many problems normally come up with using electronic bank transactions in Nigeria because of bad network.

Hassan Isa
Hassan Isa
Member
9 months ago

The Central Bank of Nigeria has made it a long-standing goal to control the supply and demand of naira currency in an effort to keep the country’s currency exchange rate constant.

Adesanyaj72
Adesanyaj72
Member
9 months ago

The Central Bank of Nigeria (CBN) has stated that the new Naira withdrawal policy will coincide with the launch of the newly redesigned Naira notes, two initiatives central to the CBN’s cashless mission and its goal of broadening access to the financial system.

Chibuzor
Chibuzor
Member
9 months ago

The limit on withdrawals is meant to reduce reliance on cash and promote the use of digital services and the e-Naira in place of traditional currency.

Kazeem1
Kazeem1
Member
9 months ago

The restrictions on transactions is meant to reduce reliance on cash and promote the use of digital services and the e-Naira in place of traditional currency.

Taiwoo
Taiwoo
Member
9 months ago

The function of the central bank is to ensure coordination with tax authorities, while the duty of the government is to raise awareness, particularly among business owners.

theApr
theApr
Member
9 months ago

Following the development on the new CBN policy, it is essential that the general public be well educated and informed about necessary details about the policy

Nwachukwu Kingsley
Nwachukwu Kingsley
Member
9 months ago

Increasing economic growth is the only method that can successfully stabilize exchange and inflation rates, and this is exactly what should be done.

Iyanu12345ogg
Iyanu12345ogg
Member
9 months ago

The govt need to enlighten its people on the withdrawal limit policy. Failure to do so will affect a lot of businesses and attracts other disadvantages.

Haykaylyon26
Haykaylyon26
Member
9 months ago

The government need to enlighten people on the new cash limit policy so people will know how money is deal with now in other to be able maintain the line of the policy

Godsewill Ifeanyi
Godsewill Ifeanyi
Member
9 months ago

The provision of cash withdrawals and other financial services in more rural areas is a primary objective of the agent banking operators.

Remi1
Remi1
Member
9 months ago

By limiting withdrawals, the withdrawal restriction hopes to encourage people to do more transactions using digital services and the e-Naira instead of cash.

Tonerol10
Tonerol10
Member
9 months ago

cash limit policy is not the mAkorede problem of Nigeria now, Nigeria is passing through a lot now. Cashless or not cashless government should do the needful

jdpumping
jdpumping
Member
9 months ago

This cash withdrawal limit is inconsequential because I see no reason why reductions are made to individual and company withdrawal in order to make citizenry use e naira and cashless policy.

Ultra0711
Ultra0711
Member
9 months ago

In order to preserve the line of the policy, the government must educate the public about the new cash limit policy and explain how money is handled today.

SarahDiv
SarahDiv
Member
9 months ago

The withdrawal limit policy by the CBN is actually impracticable because it will only make life unbearable for the masses. Added to that is the unnecessary taxes deducted by banks that are not checked or regulated.

Christiana
Christiana
Member
9 months ago

Withdrawal restrictions aim to push more digital service and e-Naira transactions at the expense of cash.

Tolaniiii
Tolaniiii
Member
9 months ago

To maintain the naira’s exchange rate, the Central Bank of Nigeria has historically controlled supply and demand.

Bola12
Bola12
Member
9 months ago

Agent banking operators aim to facilitate cash withdrawals and other financial services in less populated locations.