The Governor of the Central Bank of Nigeria, Godwin Emefiele, said on Thursday that the Nigerian economy was overdue to go cashless as the Federal Government had sufficiently invested in the required payment system infrastructure to make the transition seamless.
Emefiele said this shortly after meeting President Muhammadu Buhari in his native hometown of Daura, Katsina State.
Controversies have trailed the CBN’s latest policy, which limits daily cash withdrawals to N20,000 and weekly withdrawals of N100,000 for individuals.
But defending the CBN’s directive, Emefiele said, “I think it’s important for me to say that the cashless policy started in 2012. But on almost three to four occasions, we had to step down the policy because we felt that there was a need for us to prepare ourselves and deepen our payment system infrastructure in Nigeria.
“Between 2012 and 2022, or almost 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.
“And we think Nigeria, as the biggest economy in Africa, needs to leapfrog into the cashless economy. We cannot continue to allow a situation where over 85 percent of the cash that is in circulation is outside the bank. More and more countries that are embracing digitisation have gone cashless.”
Responding to the National Assembly’s rebuttal of the policy, Emefiele said the withdrawal limits were not set in stone but would be reviewed upward with time.
He argued that the CBN did not wish to make life difficult for Nigerians but only sought to improve the economy.
“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 tweaking some amount to be a little bit higher or a little bit lower, and all the rest of them.”
He added that the CBN would publish the names of all its 1.4 million super agents to ease the return of old money in unbanked communities.
On the amount of the old notes that had been returned to vaults, he said, “We have taken more than a trillion, and in the bank, we also have close to a trillion.”
Meanwhile, the House of Representatives summoned Emefiele to come and explain the policy to the parliament. He is to appear before the lawmakers on Thursday.
However, the House is considering a joint session with the Senate to grill Emefiele on Tuesday.
The resolutions were based on a motion of urgent public importance moved by a member of the House, Aliyu Magaji, at the plenary on Thursday.
Speaker of the House, Femi Gbajabiamila, noted that it was “a topical issue that everybody is concerned about,” asking the mover of the motion to explain why the policy was bad.
Magaji said, “This issue on which I have moved this motion bothers whoever is sitting in this place because most of them are from rural areas where everything is done in cash. Then, somebody will wake up like they own this country and make a policy that will start tomorrow—no consultation. People have forgotten that 80 to 90 percent of the people are in rural areas. We must do something to save the situation. If there was enough time, enough banks, and enough facilities, why not?”
Most of the lawmakers condemned the policy, with Gbajabiamila noting that he would meet with the President of the Senate, Ahmad Lawan, to see if the chambers could have a joint session to grill Emefiele.
The Speaker said, “If we want to comply with the Act, 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. This is important enough for him to brief the National Assembly jointly.
“If that fails, appearing before the National Assembly does not necessarily mean a joint session. If you appear before the Senate and he appears before the House separately, you have appeared before the National Assembly. But at the same time, I will ask if that is possible.”
Tentatively, the House resolved that Emefiele appear in the chamber at 11 a.m. on Thursday.
However, a member of the House, Ibrahim Olanrewaju, raised a point of order after the motion to summon Emefiele had been unanimously adopted, urging the chamber to demand suspension of the policy until the lawmakers concluded their investigation.
Olanrewaju noted that Emefiele’s appearance on Thursday next week might fail, and the lawmakers were billed to go on break while enforcement of the CBN policy was to commence on January 9, 2023.
“The implication, therefore, is that they will go ahead to implement this policy and will gradually crumble our economy. I therefore pray for us to rescind that decision (of only inviting Emefiele) and ask the Central Bank governor to stop, for now, until we meet with him in this hallowed chamber and make a firm decision. It is only on that basis that all of us, both parliament and executive, can be on the same page,” he stated.
Gbajabiamila put the prayers to a vote, and they were unanimously adopted by the lawmakers.
Earlier, Aminu Suleiman had stated that his constituency in Kano would be “terribly affected” by the policy. He added, “As a matter of fact, this could be an exit strategy for many of us if we allow this radical decision to succeed. Therefore, my voice must be heard on this.”
Suleiman noted that there were several chief executive officers in the government that had “outlived the essence of their positions, because I cannot simply understand how we will wake up one day and introduce this draconian approach to businesses, giving Nigerians one month notice to adjust their belts.”
Suleiman asked how Nigerians would be able to manage their cash-based businesses with a withdrawal of N100,000 per day.
“To allow this means every other chief executive is independent, and they will just go and brief and debrief Mr. President, and he will give them a fiat. We must arrest these things and ensure that it is not done.”
Also, Nnolim Nnaji said, “This decision is totally against commerce. In the economic situation we are in now, we need more spending than saving. The only way to drive an economy in this situation is for people to be spending money—not saving money—for businesses to be moving.
Another member, Mark Gbillah, raised a point of order, of privilege, to state that the CBN had breached the Act establishing the apex bank by failing to brief the National Assembly before rolling out policies.
Gbillah read out Section 8(4) of the CBN Act, which prescribes that “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 respect to monetary policy, economic development, and prospects for the future.”
Also commenting, Prof. Julius Ihonvbere stated that there were no banks in his constituency while most of the inhabitants were farmers who depended on cash transactions.
Meanwhile, the Minority Leader, Ndudi Elumelu, however, said the policy would check crimes as funds would now be tracked through the banking system. He said that though the timing might be wrong, the country would benefit more from it.
“If you want to stop banditry, make it impossible for them to have cash. There should not be available cash for them,” he stated, adding that the CBN had had the law but was only enforcing it.”
Meanwhile, the Arewa Consultative Youth Movement and Middle Belt Youth Forum said the policy would help guarantee a credible election in 2023, economic growth, and aid the anti-corruption crusade of the Federal Government.
They commended president Muhammadu Buhari and the governor of CBN, Godwin Emefiele, for the policy, saying it would fight vote-buying and money laundering.
The Abuja Chamber of Commerce and Industry also kicked against the policy by the CBN, arguing that the initiative would further increase the cost of doing business in Nigeria.
ACCI’s President, Al-Mutjaba Abubakar, said though the intention of the apex bank was to address growing inflationary pressure and stabilize the value of the naira, the timing of the announcement was worrisome.
Director-General of the Nigeria Employers Consultative Association, Adewale Oyerinde, said: “As usual with the CBN, the bank announced a new naira withdrawal policy without extensive consultation with organized businesses and those that will be directly impacted by the policy. This new policy is diversionary and a mere distraction from the critical issues that are affecting the nation.”
Commenting on the recent withdrawal policy by the Central Bank of Nigeria, the National President, Association of Mobile Money and Bank Agents in Nigeria, Victor Olojo, noted that the association had written to the CBN appealing for a review of the policy.
In an eight-paragraph letter titled “Letter of Appeal or Protest,” available to The PUNCH on Thursday, the association appealed to the CBN governor to review the policy.
Meanwhile, cashless transactions in Nigeria rose by 41.75 percent to N318.66tn in the first 11 months of 2022, according to data from the Nigeria Inter-Bank Settlement System.
The N318.66tn was the total amount processed on the Nigeria Instant Payment System and Point of Sales terminals monitored on the NIBSS. In the corresponding period of 2021, the figure was N224.79tn.