The Central Bank of Nigeria has imposed a naira withdrawal limit, which the Nigeria Labour Congress (NLC) claims will cause greater hardship for country residents, especially the unemployed.
The NLC said that the policy’s introduction was mistimed because most rural areas lacked the technological infrastructure necessary to conduct such business transactions. This claim was made by the NLC’s president, Ayuba Wabba.
According to him, some local governments in various states currently lack even basic banking services and are forced to rely significantly on cash transactions to conduct day-to-day commercial operations.
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Wabba continued by saying that the livelihood of POS operators, who depend on it for sustenance, is also in jeopardy.
The CBN initially announced a limit of N100,000 per week for individual cash withdrawals and a N500,000 ceiling for corporate cash withdrawals. However, in response to significant public outcry, the apex bank revised the limit to N500,000 and N5 million for individuals and organizations, respectively.
Even while the policy is intended to stop individuals who manipulate the system to launder money, it has turned into a case of trying to shoot a fly with a machine gun.
Therefore, the NLC president demanded that the policy be completely reviewed.
He said: “The fiscal policy which on paper appears to target the rich especially unscrupulous ones who manipulate the system to launder money has now become a case of trying to kill a fly with a machine gun.
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“The impact of this policy can be easily felt in rural markets where agricultural commodities, livestock, and farm produce are traded.”
He pointed out that people in rural areas who have limited or no access to modern banking services would be impacted by the policy.
“A few instances would help paint a clearer picture. In Yobe State, there are only 4 local governments that have the presence of fully functional banking facilities.
“In Borno State with 27 local governments, there are only about four local councils where conventional deposit money institutions operate,” he said.
Wabba bemoaned that the CBN policy would harm many innocent Nigerians if it were put into effect as written, while those who were targeted would find a way to get around it.
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“The implication is that many more Nigerians would be thrown under the poverty bus,” he said.
There are over 18 million POS employees in Nigeria, he continued, and it is undeniable that the CBN’s strategy will drive the bulk of them out of business and deny their families access to the daily necessities.
He stated that, “while this policy punishes the poor, the rich especially the unscrupulous ones would hardly feel the pinch of this fiscal regulation.
“It is an open secret that many of the very rich people in Nigeria run private banks in their houses. There have been several instances where humungous stash of cash had been unearthed in many private homes in Nigeria during criminal investigations.”
The NLC President urged that the policy be examined before it is put into effect in order to protect the populace and avoid defeating the purpose.
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“Overall, we wish to draw the attention of the Central Bank of Nigeria to the disruptive impact of its recent policy on cash withdrawal limits especially given its counter-productive effect on CBN’s commendable drive for financial inclusion. This policy would emasculate many small businesses and informal workers from formal financial circles,” Wabba submitted.
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