Don Disagrees with Falana, Backs Cash Withdrawal Limits

Obinna Chima

An Associate Professor in the Department of Political Science and International Relations, Covenant University, Ogun State, Dr. Moses Duruji has disagreed with the position of a Senior Advocate of Nigeria (SAN), Mr. Femi Falana on the Central Bank of Nigeria’s (CBN) imposition of cash withdrawal limits which becomes effective from January 9, 2023.

Falana had faulted the fresh cash withdrawal limits fixed by the apex bank and had said the regulator did not resort to the constitution and other relevant laws on the national economy without taking the decision. Precisely, Falana had said the central bank placed the limitation on cash withdrawals in Nigeria in complete defiance of section 2 of the Money Laundering Act, 2022.

“Since the Money Laundering Act 2022 (which has fixed maximum cash withdrawal to N5 million) has not been amended the limitation of cash withdrawal of not more than N20,000 per day and N100,000 per week fixed by the central bank is illegal, null and void in every material,” he had argued.

However, Duruji held a contrary view, insisting that the CBN Act of 2007, grants the regulator monetary policy independence. He argued that the naira redesign policy and cash withdrawal limits would help curb vote-buying in next year’s general elections.

The don explained: “The CBN, according to the CBN Act of 2007, has enormous powers when it has to do with monetary policy in Nigeria. So, they are within their rights to redesign the currency as well as set withdrawal limits. I believe strongly that the CBN in working in collaboration with the Independent National Electoral Commission (INEC) to ensure that the 2023 elections are successful.

“Femi Falana who said it is illegal, citing the Money Laundering Act. When you go through that Act, look at Section 2, sub-section 1, it states that people should not make or accept cash payments beyond N5 million and N10 million. It doesn’t talk about withdrawal.

“So, if the SAN is citing such a law, I think he shouldn’t declare that people should ignore the directive of the CBN. What he should do is to go and test it in the court. But for now, I would urge him to comply with the central bank’s directive.”

Speaking further, Duruji said: “In Nigeria, we have seen INEC working very hard to ensure that we eliminate vote-buying. INEC has introduced technology into the electoral process with the introduction of BVAS and this has cut off so many ways politicians use in rigging elections in the past. Politicians have been used to compromising the voters, INEC officials and security agencies because of the large volume of cash at their disposals.

“But with the naira redesigning and the cash withdrawal limits, that means it would be difficult for any politician that intends to compromise voters to have large volume of cash that they would deploy on election days. I strongly believe that the objectives of these policies are to curtail vote-buying.”

The CBN recently introduced new cash withdrawal limits for banks and other financial institutions. The new policy followed its recent currency redesign project 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. The CBN stated however, that withdrawals above the thresholds would attract processing fees of five per cent and 10 respectively for individuals and corporate entities going forward.

In addition, third party cheques above N50,000 shall not be eligible for OTC payment while extant limits of N10 million on clearing cheques still remains. The new withdrawal regime further pegged the maximum cash withdrawal per week via Automated Teller Machine (ATM) at N100,000 subject to a maximum of N20,000 cash withdrawal per day.

Also, only denominations of N200 and below shall be loaded into ATMs while the maximum amount that can be withdrawn via Point of Sale (POS) terminal was limited to N20,000 daily.