CBN cash withdrawal limit will collapse informal sector – ACF

THE Arewa Consultative Forum (ACF) has warned that the cash withdrawal limit introduced by the Central Bank of Nigeria (CBN) will lead to the collapse of the informal sector.

In a statement released by the Secretary-General, Murtala Aliyu, the ACF noted that the CBN might have the best of intentions while initiating the policy but failed to consider its extreme consequences on the informal sector.

The statement said, “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.

“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.

“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.”

The Forum maintained that 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.




     

     

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    “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.”

    The ACF said under the prevailing circumstances, the CBN will do itself and the country a world of good if it invests more efforts at addressing the challenges.

    The CBN recently announced a new policy that mandated banks and other financial institutions to ensure that over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100,000 and N500,000 per week, respectively.

    The revised cash withdrawal limits are contained in a CBN circular on December 6. The apex bank stated that the policy would take effect nationwide from January 9, 2023.

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