Lack of infrastructure and technical challenges have been described as obstacles to the adoption of Central Bank of Nigeria (CBN) withdrawal limit directive.
Over a decade now, CBN introduced the cashless policy initiative to limit the circulation of physical cash and promote electronic modes of payment in the country.
On the 6th of December 2022, CBN issued a new directive to financial institutions, stipulating that over-the-counter cash withdrawals by individuals and corporate entities should not exceed N100, 000 and N500, 000 (per week) respectively and that the amount of cash that can be withdrawn at ATMs and PoS terminals should not exceed N20, 000 per day and N100, 000 per week.
In a nationwide survey conducted by Market Trends International (MTI) among stakeholders to gauge opinions and understand the perception of the average Nigerian regarding this directive, 59 percent of the respondents considered it to be bad.
While 41 percent of those who responded opined that the restriction of cash transactions will gradually heal an ailing currency, as well as reduce the risk of money laundering.
According to the Executive director of Market Trends International, Victor Ebhomenye, “We probed further to decipher the motives behind respondents’ viewpoints by trying to understand the reasons such assertions were held. A good chunk of the respondents who indicated the policy to be good believe the directive promotes cashless policy, a goal the Central Bank has relentlessly pursued within the past ten years in a bid to promoting financial inclusion, tackle corruption, and prevent money laundering, ultimately becoming of immense benefits to Nigerians.
“Majority of the opposing respondents indicated that the directive will affect the business activities of rural dwellers, rightly so as a result of the lack of access to financial services within the rural community. They also believe that unskilled workers, who happen to be an integral part of the workforce and the nation at large will be affected.
“The directive makes it difficult to move the daily bulk of cash used for the payment of their daily wages. In essence, it has become imperative to view the good, the bad, and the ugly when it comes to how the newly introduced directive should be implemented.’’
Comparing and contrasting the pros and cons of the directive, Ebhomenye said: “It can be likened to a double-edged sword, favouring one set of people while obstructing another cluster of individuals at the same time. Whichever edge of the sword is used, it is pertinent that the CBN takes into consideration the plight of the masses when implementing this directive, keeping in mind that they are the majority mostly affected.’’
Stating that there are more questions yearning for answers, he said such questions include; motive behind the cashless policy, and how does it help a nation with over 55 percent of its adult population in the unbanked bracket?
Quoting EFiNa Access to Financial Services report in 2020, he said that only 45 percent of the Nigerian adult population has access to financial services, leaving well over half of the adult population without access.
This, he said, makes it difficult to implement a cashless policy considering obvious loopholes inhibiting the policy from thriving.
