There appears to be a sharp power tussle between the House of Representative and the Central Bank of Nigeria (CBN) over the cash withdrawal limit policy ahead of the release of some redesigned denominations of the Naira notes.
The CBN memo
On November 26, the bank unveiled new 200, 500 and 1000 naira bills ahead of the December 15 launch date, citing massive hoarding of banknotes with over 85 per cent of currency in circulation outside the banks’ vaults, as one of its reasons.
And in a memo issued Tuesday and signed by CBN’s Director Banking Supervision Haruna Mustafa, the apex bank directed all banks and other financial institutions to ensure over-the-counter cash withdrawals per week by individuals and corporate entities do not exceed N100, 000 and N500, 000, respectively.
Consequent upon this, the CBN directed that only N200 and lower denominations should be loaded into banks’ ATM machines.
Motion and reps’ angst
But dissatisfied with the apex bank’s decision, the House of Representatives Thursday summoned CBN Governor Godwin Emefiele to appear before it next week Thursday.
The decision followed a motion of matter of urgent public importance moved by Aliyu Magaji Dau (APC Jigawa) on Thursday during plenary.
Raising concerns over the announced policy, Chairman of the Committee on Power, Hon. Aliyu Magaji Da’u in a motion said: “My heart bleeds for the people who voted us into power, we seem to come to Abuja and forget about them and this is my opinion,” recalling how in about a month ago, Nigerians woke up to hear that there will be new currency notes.
In the motion, Da’u said small businesses, “which are the major drivers of the economy, depend on cash for transactions,” adding that the owners of these businesses would be negatively impacted by this policy.
He said: “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.”
The lawmaker further observed: “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.”
In his contribution, Chairman House Committee on Tertiary Education, Hon. Aminu Suleiman said allowing the policy might 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…”.
Minority Leader of the House, Hon. Ndudi Elumelu, who offered a contrary opinion, however, said the policy would reduce incidences of kidnapping and related vices, saying “if you go to the communities today, they will ask them to contribute money, 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.”
Another twist was added by Hon. Mark Gbillah, who in citing section 8(4,5) of the CBN Act pointed out that the apex bank’s governor is required to consult with the parliament over certain policies, saying the procedure was breached.
When asked by Speaker Femi Gbajabiamila to state whether the House Committee on Banking and Currency was briefed on the recent development, a member of the panel, Hon. Mela Danzariya, said for his over three year-stay and being a member of the committee, “I have never seen the CBN Governor giving us any report. For four times, he has increased interest rate for loaners.”
In its resolution, the House directed Emefiele to appear before it next week Thursday to explain the impact and significance of the new policy.
The lawmakers also urged the suspension of the decision pending the outcome of the expected meeting with the House on the compliance of the apex bank with relevant sections of the CBN Act and other relevant laws.
Affirming the House’s resolution, Speaker Gbajabiamila said Emefiele is expected to face the House next Thursday, unless he (Speaker) is able to obtain the understanding of Senate President Ahmad Ibrahim Lawan for a joint session on the matter.
No going back – Emefiele
But the CBN governor has insisted that the decision is on course, assuring the associated challenges would be overcome.
He also said the apex bank had so far retrieved more than N1 trillion since its launch of new naira notes in a bid to move cash back into the banking system.
The CBN boss said this Thursday while fielding question from journalists in Daura, after his visit to President Buhari.
He was recently reported to have said N3.23 trillion was in circulation as at September 2022, a development he described as “a worrisome trend that cannot be allowed to continue.”
Speaking on efforts so far, he said: “The central bank, we have taken more than a trillion and in the bank we also have close to a trillion. But what we have done in the central bank is to move more people from different departments into currency processing so that they can process this cash as quickly as possible and from there, banks can now move what they have with them.”
Emefiele said banks received the new notes on Wednesday and have started dispensing them.
On the redesigned Naira notes, Emefiele said: “We are more than prepared because I said December 15 when we announced it, we said December 15 is when we will issue the cash but we have to move it forward because it leaped, the President launched it in November 26 instead of December 15 that the President unveiled it.
“And I just told you now that yesterday, the banks have received the new cash and they have started dispensing them. I can only just assure you that it will go round, let us just be calm, luckily the old currency continued 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.”
He said the bank would continue to monitor the situation and make adjustments where needed.
“We will do so because we are humans; we want to make sure that we are 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,” he said.
On the cashless decision: the CBN boss said: “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 digitization have gone into cashless. And I said it at different fora that this is not targeted at anybody, it’s just meant for the good and development of the Nigerian economy and we can only continue to appeal to Nigerians to please see this policy the way we have presented it.”
“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.
“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.
“Having 1.4 million of them is as good as having 1.4 million banking points where people can conduct services. And we think, Nigeria as a big country, the biggest economy in Africa that we need to leapfrog into the cashless economy,” he explained.
By Joshua Egbodo and Benjamin