In the November 2021 edition of the Nigeria Development Update prepared by the global financial institution, Nigeria is projected to have one of the highest inflation rates globally and the seventh-highest among Sub-Saharan African countries in 2022.
“High inflation is frustrating Nigeria’s economic recovery and eroding the purchasing power of the most vulnerable households. In the absence of measures to contain inflation, rising prices will continue to diminish the welfare of Nigerian households.”
The bank further highlighted the adverse effects of inflation on Nigeria, which include pushing eight million Nigerians into poverty, andamo8, reaching 2.4 percent of the GDP in 2019 and then falling to 2.2 percent of the GDP in 2020.
“Cost of debt is high as Federal Government also resorts to overdraft (Ways and Means financing) from the CBN to meet in-year cash shortfalls. At end of 2020, the stock of the CBN Ways and Means financing was estimated at N13.1tn or 8.5 percent of the GDP,” it stated.
Meanwhile, the Federal Government had estimated that Nigeria’s total public debt will rise from the present N38 trillion to N50.22 trillion by the end of 2023, with domestic debt projected at N28.75 trillion and foreign debt at N21.47 trillion. Suggesting that President Muhammadu Buhari-led’s administration is planning to borrow an estimated N12 trillion in two years.
Economists have condemned President Buhari’s incessant borrowing habit and warned that it could hurt the country’s development and productivity down the line. In the second quarter of 2021, the administration spent N445 billion on debt servicing, according to Debt Management Office. That is the amount that could have been used to improve factors of production and grow the economy.
CBN reverses itself on cash withdrawal limits as Emefiele succumbs to pressure
—now pegs weekly withdrawal for individual to N500,000, Corporate N5million
The Eyewitness Reporter
The Central Bank of Nigeria(CBN) may have succumbed to pressure from the National Assembly and other rich Nigerians as it has reversed itself on its earlier cash withdrawal limits for individuals and corporate organisations.
In a circular number BSD/DIR/PUB/LAB/015/073 dated December 21st, 2022 and addressed to all Deposit Money Banks(DMBS) and other financial institutions, the apex bank disclosed that the new weekly cash withdrawal limits for both the individuals and corporate organisations have now been reviewed to N500,000 and N5million respectively.
The new weekly cash withdrawal limits now superseded the earlier one released on December 6th, 2022 which were put at N100,000 for individuals and N500,000 for corporate organisations.
In the new revised cash withdrawal limits, the CBN claimed the revision of the policy was in response to feedback from the stakeholders.
The new revised policy also slashed the processing fees for amounts above the approved threshold from an initial 5 percent for individuals to 3 percent and for corporate organisations from 10 percent to 5 percent.
The circular, which was signed by Haruna Mustafa, the Director of Banking supervision, the CBN said the new revised cash withdrawal policy takes effect from January, 9th,2022.
”Following our circular BSD/DIR/PUB/LAB/015/069 dated December 6, 2022, on the above subject and based on feedback received from stakeholders, the Central Bank Of Nigeria(CBN) hereby makes the following reviews;
–the maximum weekly limit for cash withdrawal across all channels by individuals and corporate organisations shall be N500,000 and N5 million respectively.
–In compelling circumstances where cash withdrawal above the limits in (1) above is required for legitimate purposes, such requests shall be subject to a processing fee of 3 percent and 5 percent for individuals and corporate organisations respectively.
–Futrher to (2) above, the financial institution shall obtain the following information from the Customer, at the minimum,and upload same on the CBN portal created for the purpose
a. Valid means of identification of the payee(National ID, International passport, or driver’s license)
b.Bank Verification Number(BVN) of the payee.
c.Tax Identification Number(TIN) of both the payee and the payer.
d. Approval in writing by the MD/CEO of the financial institution authorising the withdrawal.
–Third-party cheques above N100,000 shall not be eligible for payment over the counter, while the extant limit of N10 million on clearing cheques still subsists.
—Monthly returns on cash withdrawal transactions above the specified limits should be rendered to the banking supervision, Other financial institution supervision and Payment System Management Departments as applicable
—Compliance with extant AML/CFT regulations relating to KYC, ongoing customer due diligence, currency and suspicious transaction reporting, etc is mandatory in all circumstances.
—Customers should be encouraged to use alternative channels(internet banking, mobile banking apps, USSD, cards/POS, eNaira,gets) to conduct their banking transactions”, the circular reads.
The CBN however warned all the banks and OFIS that aiding and abetting the circumvention of this policy will attract severe sanctions.
It could be recalled that the policy, which was first announced on December 6th, 2022, generated mixed reactions, especially from the members of the National Assembly who invited the CBN Governor. Godwin Emefiele to come and explain the rationale behind the cash withdrawal limits.
Twice, the National Assembly invited Mr. Emefiele, but twice, he did not appear, citing national assignment engagement as the reason for his non-appearance.
The review may, however, be as a result of the intense pressure that the CBN governor has lately been subjected to as a result of this policy which analysts believed does not favour the elites, the politicians and the rich Nigerians, especially giving the forthcoming elections.
ICT media chiefs launch foundation to drive advocacy, development
Cashless policy: CBN limits daily cash withdrawals to N20k
—-removes N500, N1000 notes from ATM
The Eyewitness reporter
The maximum cash withdrawal over the counter (OTC) by individuals and corporate organisations per week shall henceforth be N100,000 and 500,000 respectively.
“Third-party cheques above N50,000 shall not be eligible for payment over the counter, while extant limits of N10,000,000 on clearing cheques still subsist.
Headlines2 months ago
I am ready to stake my integrity over disbursement of CVFF—-Sambo
Headlines3 months ago
Transport Minister, Bello-Koko, Hassan Bello storm MARAN 34th anniversary celebration
Headlines3 weeks ago
Joe Sanni feeding fat on ANLCA crisis —-Prince Ozo Chukurah
Headlines2 months ago
NIMASA unveils N17.4 billion new highrise headquarters on Victoria Island
Headlines2 months ago
Excitement grips maritime stakeholders as MARAN holds 34th anniversary celebration
Headlines2 months ago
Possession of NIN by passengers now requirement for boarding trains—Sambo