Cash Withdrawal Limits Will Cripple Campaign Funding – Political Parties

Political groups have protested the Central Bank of Nigeria’s new cash withdrawal limits, claiming that they will suffocate the political process.

Parties such as the Peoples Democratic Party, Social Democratic Party, Africa Democratic Congress, and African Democratic Party argued that the policy would have an impact on the amount of money candidates needed to sustain their campaigns ahead of the 2023 elections.

In separate interviews with Newsmen on Sunday, the African Action Alliance, Zenith Labour Party, and All Progressives Grand Alliance all stated that it would affect poor rural inhabitants.

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Adamawa State Governor Ahmadu Fintiri accused the CBN Governor, Godwin Emefiele, of targeting the political class with the new cash withdrawal limit, which limits over-the-counter cash withdrawals by individuals and firms to N100,000 and N500,000 per week, respectively.

It also restricted withdrawals from point-of-sale terminals and automated teller machines to N20,000 per day.

Withdrawals exceeding the criteria would now incur processing costs of 5% and 10%, respectively, for individuals and business entities, according to a document signed Tuesday by the CBN’s Director of Banking Supervision, Haruna Mustafa.

Furthermore, third-party cheques worth more than N50,000 would not be eligible for OTC payment, although existing clearing cheque restrictions of N10m will be maintained.

The circular further instructed banks to load only N200 and lesser denominations into ATMs and to limit ATM withdrawals to N20,000 per day.

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The proposal, which goes into effect on January 9, 2023, has been met with controversy, although the CBN reiterated on Wednesday that PoS operators can seek for exceptions.

The PDP campaign Reacts

Chief Dele Momodu, Director, Strategic Communications, National Election Management Committee of the PDP Presidential Campaign Council, commented on the circular, saying that the recently announced cash withdrawal policy would affect the parties’ funding activities, adding that “if enforced, the policy will strangle the political process, not the PDP alone.”

He said, “In 2014/2015, I am sure if (President) Buhari had no access to funding, he would never have been the President of Nigeria. There are people who are making contributions to the political parties and some parties have set up structures to receive support from people. How then will they be able to access the fund if they are saying you cannot withdraw more than N100, 000 a week?’’ he asked

“I read somewhere that the CBN said the policy would not be rigid but why make the policy in the first place if it is not going to be rigid?” he queried.

Momodu stated that “the Finance Committee is better equipped to say the degree this will effect us as we prepare for a series of activities coming up to the general elections.” If the Finance Committee believes the party will be badly impacted, it may consider writing to the CBN, but as I previously stated, this is more of a concern for the average citizen than it is for a political party.”

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He also discussed how the new CBN policy would impact the poor.

He added, “Why make a policy that will largely affect the poor more than the rich? My worry is that most of our policies always target the poor. The PDP is worried about the poor market woman, the ordinary man on the street because we still run a cash-and-carry economy.

Chief Ralph Nwosu, National Chairman of the Africa Democratic Congress, noted that the policy could offer a challenge to the parties, noting that the CBN did not conduct proper sensitization efforts on it, emphasizing that it was politically motivated.

Nwosu stated that the policy would have an impact on the party’s campaign, saying that paying ADC agents in remote areas might be difficult.

He added, ‘’How do you expect the ADC candidate to have the cash to do the things he wants to do and how do you think that this is the best time for such an undertaking?

‘’We have almost 200,000 agents that we must pay and 80 per cent of them live in rural areas. Is it that N2,000 or N5,000 that you pay them that you would transfer to each of them? How many of them have such a facility? So it’s completely inconsiderate of them.”

He added that the cash withdrawal policy would affect Nigerians negatively.

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He said “What is the literacy level (of Nigerians), what kind of campaign have they done so far on the policy? You know, you can’t continue dealing with Nigerians as if we are still in the military, especially when that dictatorship is meted out by people who are not even in the military. It’s most irresponsible.

‘’We want to believe that the intention this time is also political. It is not only affecting the election but will affect the general way of living in Nigeria.

‘’This is part of the challenge we have as a country in that people in government occasionally just take actions on their own without caring how it will affect the masses. So, generally it’s not about how it affects the elections but about how it affects the society.

“There are people selling rice, beans and every day, people come to them to buy things and pay with naira and kobo, so before the CBN should do anything they should think about the society.’’

Angry SDP

“You cannot overnight bring a policy that will adversely influence a project as vast as the general elections,” said Alpha Muhammed, the Social Democratic Party’s factional National Publicity Secretary.

‘’Definitely, cash has to move, people have to pay for logistics; you have to give cash to agents, you have to give cash to those who will transport people to rallies. It will definitely affect the success of the election and the campaign itself.’’

Asked if the parties would write to the CBN for a waiver, he responded, ‘’Of course, if the need arises, it is expected that the party or candidate will write to the CBN for a waiver. But it’s important for them to utilise cash in prosecuting some logistics aspect of the election campaigns.”

See Percentage of Nigerians That Have Less Than N500,000 In Their Account

Sani Yabagi, National Chairman and Presidential Candidate of the African Democratic Party, told Newsmen that while the Federal Government may have intended to limit the flow of money during the 2023 elections, political parties may face practical issues if the strategy is implemented.

He argued, “I think the government is trying to control the flow of money in circulation. We have all agreed that vote buying and selling is a cankerworm to our democracy. So, if the intention of the government is to curb the use of cash for vote buying, this will be good news for everyone.

“But will this not amount to killing an ant with a sledgehammer? Again, which is better: the medicine or the sickness? Government must think about this again particularly as it would affect the logistics of all the political parties.”

Chief Dan Nwayanwu, National Chairman of the Zenith Labour Party, voiced concern about the policy’s impact on the rural poor, adding that a lack of access to internet platforms might lead to a grassroots crisis.

Speaking with Newsmen on Sunday, the ZLP boss said, “The only negative aspect of this is the fact that the policy will affect the rural and urban poor. These are people who are out every day in search of their daily bread. How many of them have access to electronic platforms to transact business? Even the Point of Sales; are they evenly distributed everywhere? This is the worry of the Zenith Labour Party.

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“As far as the parties are concerned, we are okay. Let those who stashed billions of naira in tanks bring them out. They should have the courage to bring them out. It is good to note that over N500bn have been returned in the past two weeks. Maybe before the elections, trillions will be returned to the banks.’’

According to Chief Victor Oye, National Chairman of the All Progressives Grand Alliance, poor Nigerians will undoubtedly suffer as a result of the program if it is implemented, but any agony will be temporary.

He said, “The poor will be affected no doubt but this is just a temporary measure. It is not going to last. It is part of the process to make the transition to the new currency seamless. The pain and difficulty will ease out very soon.

“Of course, it will take time for poor Nigerians to get used to this but they will eventually embrace it. Let me also add here that this is a process in the journey to a cashless economy. There will be a question or two about the timing, particularly with elections around the corner. Still, the rich and the poor should support it.’’

Yunusa Tanko, spokesman for the Obi-Datti Presidential Campaign Council, stated that the Labour Party would support any policy that would bring about constructive change while opposing anti-people programs.

Noting that the naira has appreciated since the new policy was revealed, Tanko stated that his party would not support party waivers, adding that this may be a tactic to conceal money that could be used to buy votes during the elections.

Ladipo Johnson, spokesman for the New Nigeria Peoples Party, disagreed, claiming that the CBN strategy was geared at curbing inflation in the country.

While admitting that the measure may cause some hassles, he insisted that it would not impair party fundraising, noting that contributors may use online channels to send money to the parties of their choice.

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Omoyele Sowore, presidential candidate of the African Action Alliance, stated that his party is unconcerned with the cash limit withdrawal policy, emphasizing that it is aimed at underprivileged individuals.

‘’The policy targets the poor, not powerful political figures and parties anyway,’’ he contended.

The Spokesman of the Tinubu-Shettima Presidential Campaign Council, Festus Keyamo, declined to comment on the matter.

“For now, I decline to give any comment on that. We have not met formally to take a position on the issue,” he said.

However, the South-South Agenda for Tinubu/Shettima Support Groups strongly opposed the CBN policy, calling it a conspiracy to pit the poor masses against the President.

The National Coordinator of the group, Mr. Bitrus Oliver, in a statement said, “This policy will clearly undermine the efforts of the Federal Government in sustaining micro and small scale enterprises across the country as it will limit the fund in circulation due to the non-availability of cash and may totally asphyxiate small and struggling businesses before the policy is stabilised.’’

Oliver noted that in practically all rural marketplaces across the country, 90% of transactions are done in cash rather than via mobile transfer, and that capping ATM withdrawals at N20,000 will stymie many transactions and perhaps cause turmoil in the business sector.

Election Authorities Respond

In response to the parties’ criticisms, Musa Rafsanjani, Chairman of the Transition Monitoring Group, stated that the policy would not harm lawmakers or their parties.

He went on to say that, despite the policy’s efforts to limit vote buying, politicians would still get around it and buy votes during the election.

“We all know that for the big politicians, this policy is not going to affect them because the bank, the same Central Bank will provide money for them to do their own campaigns.

‘’The big politicians, who are into vote trading, have ways in which they can blow (bypass) this policy because they can hide under so many identities to get money from the CBN.

‘’This policy will not affect them. The only people who will be affected are the rural people who don’t have access to the Internet, who don’t have access to android phones, and who do not know how to even transfer,’’ said Rafsanjani, who is also the Chairman, Transparency International Nigeria.

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Idayat Hassan, Executive Director of the Centre for Democracy and Development, agreed that the regulation would not hinder party financing, adding that it might serve to level the playing field for all parties participating.

She stated, “Maybe it will even be better because while people are supposed to pay into bank accounts, any physical transfer of cash that is moved will allow for monitoring and will disadvantage one party against the other.

‘’So, maybe proportionally, as it comes to the parties, it might create a level playing field, since we can see where the money is going to, and who is giving them.

‘’It will now have to pass through the banking system, somehow reducing the role of money in politics. But the real casualties are the ordinary Nigerians who are largely unbanked and live in rural areas.”

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