As CBN Cash Withdrawal Policy Unsettles Lawmakers

Udora Orizu writes that the National Assembly is kicking against the Central Bank of Nigeria’s new cash withdrawal policy for some suspicious reasons

The Senate and House of Representatives last week expressed concerns over the Central Bank of Nigeria’s (CBN) new cash withdrawal policy introduced for banks and other financial institutions.

The apex bank had in an apparent move to tackle vote buying as the 2023 elections draw closer, and control the amount of cash in circulation, introduced a limit on cash withdrawal. 

The new policy followed the apex bank’s recent currency redesign in which it had expressed concerns over the high volume of cash outside the banking system. Under the new dispensation, the central bank restricted the maximum cash withdrawal over the counter (OTC) by individuals and corporate organisations per week to N100,000 and N500,000, respectively.

Since the return to civil rule in 1999, Nigeria’s politics has been characterised by monetisation through vote buying and financial inducement of voters. Money-based politics has become dominant themes in Nigeria’s electioneering process. 

The 2022 political parties’ primary elections yet again brought to the fore the reality of ‘dollarisation’ of vote buying in Nigeria. According to reports, delegates to the primary elections of the two major parties were paid thousands of dollars to induce them to vote for certain candidates.

During the June 2022 governorship election in Ekiti State, election observers and the media reported that some voters received between N5,000 and N10,000 each, to vote for certain candidates. A civil society organisation, Centre for Democracy and Development (CDD), said its field observers documented 41 bribery cases in six local government areas of the state. 

While analysts have thrown their weight behind the latest decision of the CBN to limit cash withdrawals by individuals and corporate organisations, the federal parliament however is of a different view.

At the Senate’s plenary last Wednesday, the Senate President, Dr. Ahmad Lawan while ruling on a motion by the Senate Minority Leader, Senator Phillip Aduda, on the issue of the newly announced CBN policy on withdrawal limit, said the two nominees for the position of deputy governors of the central Bank would address the matter during their screening exercise.

Aduda had in his motion, asked the Senate to discuss the issue of the planned N100, 000 cash withdrawal by an individual per week. His position was supported by Senator Gabriel Suswan, who urged the Senate President to allow the debate on the matter.

Lawan said debating the matter without much information or fact on the policy could amount to exercise in futility.

The Senate President said, “we have an opportunity to screen two nominees for the position of Deputy Governor of the CBN. I think it is after their screening we should take this motion. These people are there in the CBN, why can’t they come tomorrow?”

But Suswam, disagreed with Lawan, saying, “I think you should have allowed us to discuss this motion for the sake of Nigerians.”

Lawan insisted on his earlier position and replied: “No, distinguished, there is a misunderstanding here. I told you what my personal opinion is. My personal opinion is this weekend is off but we have an opportunity; the Committee on Banking will be screening two deputy governors of the CBN. This is one major issue they should raise with them. On Tuesday next week we can take a motion but let’s have something solid.”

But at the House of Representatives’ plenary on Thursday, the lawmakers directed the CBN to halt the implementation of the new cash withdrawal policy, pending compliance with the provisions of the Act establishing the apex bank.

The lawmakers also summoned CBN Governor, Mr. Godwin Emefiele in accordance with the provisions of the Central Bank Act to brief them on several policies of the bank in recent times, particularly the new currency and the withdrawal limit policy.

The angry lawmakers took turns to condemn the new cash withdrawal policy, while contributing to a motion of urgent national importance sponsored by the Chairman of the House Committee on Power, Hon. Magaji Da’u Aliyu.

Aliyu had while moving the motion, said the new policy by the CBN should not be allowed to stand as it would adversely affect the Nigerian people, especially those running small-scale businesses.

According to him, while the country was trying to come to terms with the decision to redesign the currency, the CBN was coming up with yet another policy that would adversely affect the masses without proper advocacy.

But, the Minority Leader, Hon. Ndudi Elumelu supported the CBN policy, saying that it would curb banditry, kidnapping and reduce corruption.

Elumelu advised that the motion should be stepped down, till the committee chairman of banking and finance brief the parliament after the CBN governor has briefed his committee.

He said: “No matter how bad we feel, no matter how we feel that our people will be endangered, I think the right thing is to amend the existing law. On the issue of cashless policy, I think that is the best thing that can happen to this country even though the timing might be difficult; we may ask for an extension of time for it to be well implemented. The policy will help, stories are going round Abuja, even when people go to use the PoS to withdraw money, there are people waiting to cut off their hands to collect the money.”

On his part, Hon. Mark Gbillah raised a point of order on the provisions of the Central Bank Act, saying the CBN was yet to explain to Nigerians how the redesigning of the Naira was funded, as there was no approval of such expenditures by the National Assembly.

Corroborating this position, another lawmaker, Hon. Aminu Suleiman described the CBN’s new policy as draconian and heartless.

He urged his colleagues to look into the CBN Act and see how they can diminish the bank’s powers to prevent a situation like this.

He said: “My people are terribly affected by this policy change of CBN. Several government chief executives have out-lived their stay in office. Creating this kind of draconian policy and giving Nigeria just a month? Most villages don’t have banking system coverage. The CBN under Emefiele woke up to create this heartless policy. This will wipe out the progress we have made in creating small- scale businesses. Let’s search our books and impose necessary laws to diminish CBN’s excessive powers; we should look into CBN laws and ensure it’s not done.”

Similarly, Hon. Julius Ihenbvore chided Emefiele for allegedly towering above the National Assembly.

Ruling on the matter, the Speaker, Hon. Femi Gbajabiamila who felt convinced after confirming from some members of the relevant Committees of the House such as Hon. Victor Danzaria from Gombe State of the absence of Emefiele for the briefings overtime, relied on the sections of the laws so quoted to sustain the point of order.

Gbajabiamila eventually heeded the prayer of the substantive motion and ruled that Emefiele be summoned to brief the House on Thursday this week and that the implementation of the policy be halted pending the outcome of the meeting with the national assembly.

Despite the opposition of the lawmakers, the CBN late on Thursday stated that there was no plan to reverse the policy slated for take-off on January 9, 2023.

It, however, hinted that necessary reviews of the details of the policy would be carried out after implementation.

Emefiele, who disclosed these to State House Correspondents in Daura, Katsina State after a meeting with President Muhammadu Buhari, also said the policy is not targeted at any particular person but aimed at developing the economy.

But Emefiele said he has the President’s backing for the current monetary redirection efforts, saying Buhari “was very, very happy and said we should carry on our work, no need to fear, no need to bother about anybody”.

Responding to questions after his meeting with the President, Emefiele, among others, said: “Well, the Senate of the Federal Republic is National Assembly, they are legislative arm of the government and from time to time we brief them about what is happening and about our policies and I’m aware that they have asked for some briefings and we will brief them but I think it’s important for me to say that the cashless policy started in 2012”.

Meanwhile, following the lawmakers decision to halt the policy, Northern Youths have urged the apex bank to ignore the resolution.

The youths speaking at a joint meeting in Abuja led by co-convener, Comrade Godwin Meliga, accused Gbajabiamila of allegedly working for his political godfathers against the CBN cash limit.

The youths while describing the lawmakers’ resolution as illegal and provocative, said the aggrieved lawmakers ought to head to court if they were not comfortable with the apex bank’s transformative policies.

The youths said: “The decision of the Speaker Hon. Femi Gbajabiamila-led House of Representatives to order CBN to halt the cash withdrawal policy has been condemned and rejected by us. We describe the decision as illegal and case of legislative rascality’ taken too far in a bid to protect interest of godfathers who want to use illicit funds to buy votes and launder ill-gotten wealth, and urged the CBN to ignore the resolutions.”

There are strong indications that the concerns of the lawmakers are not for the well-being of their constituents but the effects of the new policy on the planned financial inducement of voters in the upcoming general election.