The Central Bank of Nigeria (CBN) has explained to the House of Representatives, on why it came up with redesigning of some of Nigeria’s currency notes, and the desirability of the cash withdrawal limits it recently introduced.
However, Aisha Ahmad, Deputy Governor, Financial System Stability Directorate of the apex bank who appeared in the stead of the CBN Governor, Mr. Godwin Emefiele, Tuesday, disclosed that N500 million worth of the new currency notes have been ordered from the mint, but could not say how much was expended to produce same.
The House had three separate occasions shifted the briefing session, with the last update coming from Emefiele on Wednesday that he was attending to his health outside the country, a development that led to the appearance of Ahmad.
Setting the stage for the engagement, Speaker Femi Gbajabiamila explained that the House had invited the CBN to brief it “in accordance with the extant laws of the federation on the new monetary policies as it affect cash policy and I believe the new redesign.
“We have with us today after the considered explanation of the CBN governor who is unable to be here because he is out of the country at the moment attending to his health and he had graciously asked that he be represented by the deputy governor who is in charge of Financial System Stability in the CBN and she here with her team. We will take her briefing and ask questions if necessary”.
On the cashless policy that culminated in the introduction of withdrawal limits, the CBN deputy governor recalled that same was introduced in 2012.
“The cashless policy was first launched in 2012 and it was launched under the CBN’s mandate in section 2(d) and 47 of the CBN’s act. We commenced this on a pilot basis in Lagos State and introduced limits on transactions on N500, 000 and N3 million for individuals and corporate customers respectively and with charges for any amount above this”, she said.
According to her, the pilot scheme “was very successful and following that, the policy was extended to 6 other states: Abia, Anambra, Kano, Ogun and Rivers in July 2013. It’s been 10 years now since we first launched this, the policy had been amended severally due to feedback from stakeholders and also to ensure that we develop the infrastructure and financial acces points required to support the policy”.
She further told the House that the fresh policy pronouncement on December 5, which generated the current debate “was a continuation of the cashless policy that we started 10 years ago and it was in recognition of the positive changes that have happened in the financial and payment system since the cashless policy was first launched”, citing one of such to be “a wide proliferation of financial access points”.
According to her, upward reviews of the initial withdrawal limits for both individuals and corporate entities have been done in response to feedbacks the apex bank got.
“We have since reviewed the limit significantly from N100,000 that we had per week to N500,000 per week for individuals; from N500,000 per week for corporate to N5 million per week for corporate bodies”, stressed, and added that charges do not apply to withdrawals within the set limits.
In response to questions by members, Ahmad denied any political consideration to the bank’s new policies, especially in view of fast approaching general elections in 2023, noting that the CBN was an independent institution that never consider any political interests in its policy formulations.
After listening to the briefing, Speaker Gbajabiamila however did not mince words in drawing attention of the bank to its failure to comply with its establishment Act, part of which require that it has a minimum of two time engagement with the parliament in every year, citing the UK and the USA as great economies where such monetary policies allow enough time for full implementation.
He also assured that all the details received would be deliberated upon by members, and the necessary action taken subsequently.
