Nigerians, CNPP kick as Senate rejects CBN’s N100, 000 withdrawal limit

CBN governor Godwin Emefiele presents new naira notes to President Muhammadu Buhari

The Senate Wednesday threatened 100 federal government owned agencies with zero budget allocation in 2023 for not honouring invitations of its committee on public accounts on queries slammed on them by the Office of Auditor General of the Federation (OAuGF).

The red chamber also kicked against plan by the Central Bank of Nigeria (CBN)  to limit cash withdrawal by any individual to N100,000 and corporate bodies to N500,000 per week from January 9, 2023.

The hammer of the Senate fell on the affected 100 agencies which included the State House, Presidential Fleet, Ministry of Finance, Nigeria Army, Navy, Air Force, Police and the Independent National Electoral Commission ( INEC ) among others, was sequel to complaint by Chairman  Senate Committee on Public Accounts  Mathew Urhoghide (PDP Edo South).

Urhoghide, had, through Orders  42 and 95 of the Senate Standing Rules, rose to complain of  alleged recalcitrance of heads of the affected agencies to honour invitations sent to them by his committee for required appearance before it on queries raised by OAuGF on financial infractions observed in their yearly budgetary implementations.

Urhoghide hinged his complaints on provisions of Sections 62, 88 and 89 of the 1999 Constitution (as amended).

“Mr. President, heads of agencies totalling about 100, indicted in various audit reports forwarded to the Public Account Committee by Office of Auditor General of the Federation in line with provisions of sections 62, 88 and 89 of the 1999 Constitution, have repeatedly failed to appear before us. 

“This to us is against the Constitution and policy of accountability and transparency of the federal government. I crave your indulgence that we invite through your order either by way of warrant of arrest or anything so that these agencies can come so that we can complete our report and submit to this Senate,” he said.

Riot Act

Miffed by the submission, Senate President Ahmad Lawan requested for the list of the affected agencies, read them out to all senators and ordered that they should appear before the committee within one week or risk zero budget allocation in 2023 as far as capital expenditure component is concerned.

Reading the riot act, Lawan said: “Your point of order are sustained fully and completely, totally sustained, you are right on the dot to bring to the plenary your grievances.

“Reading this list at plenary gives the agencies opportunity to now know if they were not aware before for those that may claim ignorance and I am taking the opportunity here to advise that in the next one week if the name of any agency is here that agency should reach the Committee on Public Account of the Senate to sort out when the agency would appear before the committee. 

“If there is no communication whatsoever and no cogent and verifiable reasons are given, we will slash the budget of the agencies as far as capital component is concerned.

“Heads of the affected agencies must take this very seriously because any serving public officer must be ready to render accounts on public funds and if not ready to do so, should quit, since nobody should be above the law.”

Other affected agencies aside ones earlier mentioned are: Office of The Accountant General of the Federation, Federal Ministry of Interior, Budget Office of the Federation, Nigeria Bulk Electricity Trading Plc, Ministry of Foreign Affairs, National Emergency Management Agency, National Commission for Refugees, Migrants and Internally Displaced Persons, Nigeria Security and Civil Defence Corp, Ministry of Defence and Office of the Special Assistant to the President on Niger Delta Affairs.

Others are Ministry of Petroleum Resources,  National Inland Water Ways  Authority  Lokoja ,  Ministry of Health , Presidential Amnesty Programme, Ministry of Agriculture and Rural Development, Federal Civil Service Commission ,  Nigeria Nuclear Regulatory Authority , National Health Insurance Scheme, Ministry of Communications and Digital Economy,  Tertiary Education Trust Fund (TETFund), Ministry of Youth And Sport Development , Ministry of Environment, National Hajj Commission of Nigeria, Revenue Mobilization Allocation and Fiscal Commission , Ministry of Information and Culture , Nigeria Defence Academy, National Human Rights Commission, Nigeria Centre for Disease Control,  National Security Adviser etc .

 Redesigned Naira

 On the planned N100, 000 withdrawal limit per week, Senator Philip Tanimu Aduda (PDP FCT), in an aborted motion, sought for debate from all senators on the planned policy before the President of the Senate intercepted him that it was too early to debate the policy.

However Lawan in stopping him said: “As good as the cashless policy may be, it shouldn’t be jumped at, at once. The way CBN is going about the policy, many Nigerians would be cut off and that won’t be accepted. 

“Motion on the policy will be thoroughly debated in Senate on Tuesday next week after adequate information has been gotten on it “Before Tuesday next week, our committee on Banking , Insurance and other Financial Institutions mandated to screen the re-appointed Deputy Governors of Central Bank , should focus its questions on the planned policy.

“The CBN Deputy Governors must be thoroughly drilled on the policy after which extensive debate on it will be made by Senators on Tuesday next week,” he said.


Meanwhile, various reactions from Nigerians have continued to trail the CBN withdrawal limit.

While some hoped that the policy would encourage more Nigerians to use alternative channels to carry out their banking transactions, others criticised the policy, saying it would have a negative effect on daily businesses.

The CBN stated that the revised cash withdrawal policy was pursuant to the launch of the newly redesigned naira notes which aligns with its cashless policy.

One of its financial inclusion goals is to help the CBN “better able to influence savings, investment and consumption behavior through interest and exchange rate changes, and a direct result of increased participation of Nigerians in the formal financial sector.

“This is at the core of its development finance activities which the Central Bank has been driving for years by mopping up liquidity from banks via CRR and utilising it as part of its sources for its intervention funds.”

In his view, Professor of the Capital Market, Uche Uwaleke, hailed the CBN, saying it would further help reduce the amount of currency in circulation.

In a chat with Blueprint, Uwaleke said the move by the apex bank would fast track the financial inclusion drive of the regulator.

“It goes without saying that cash withdrawal limit is an integral part of currency redesign meant to reduce the amount of currency circulating outside the banking system. 

“If the experience of India’s demonetization exercise is anything to go by, then it’s evident that imposition of cash withdrawal limits by monetary authorities, following a de-monetisation exercise, is a norm. So, cash withdrawal limit is part of the currency redesign package. The two are mutually dependent.

“If depositors of old currency notes are able to exchange them for new naira notes which get withdrawn from the banks, then the primary aim of currency redesign is defeated.

“That said, I expect it to give impetus to financial Inclusion as Nigerians become compelled to embrace alternative payments platforms.

“It now behooves the CBN to ensure that bank charges on money transfers and other related charges are reduced to the barest minimum,” he said.

Also, a financial analyst, Kalu Aja, approved of the policy as long as POS, mobile money, and other non-cash transactions are offered at reduced prices.

He, however, suggested that other options; such as writing a cheque, transfer, or mobile banking – which is trackable, should be utilised.
Also, a social analyst, Kunle Adeyemi, explained that the policy would stop those thinking of making brisk business by collecting old notes from criminals at higher rates and go to the ATM to withdraw new notes.

Another analyst in Lagos, Abiodun Adesina said the limits set by the CBN were also part of a broader push to encourage the use of the eNaira. 

 In his opinion, the essence of the policy is to tax cash transactions.
In yet another reaction, Adefolarin Olamilekan, a political economist said while the policy may bring discomfort to individuals and businesses in the short run, the long run benefit should not be overlooked.

“Although, many may not be comfortable with it, especially if we consider the immediate challenges it would throw up.

“Nevertheless, the policy has long term benefits. For us, this policy is a welcome development that resonates around the world today as limited cash withdrawal is a global trend that is out to replace physically carrying cash with digital banking and online transactions. With this, Nigeria is joining the international community to experiment the cashless policy.

“The CBN in the past 7 years have maintained its stands which suggest the current managers of our apex bank know their onions. In this wise, the apex bank mission to ensure Nigeria join the global banking system and embrace more of the fusion of monetary policy with ICT. More so, as the apex from the onset of the current manager positions it’s self as aligning to heterodox monetary style,” he said.

In a similar view, Managing Director SD&D Gabriel Idakolo said the cash limit policy of the CBN is a subtle reminder that Nigerians should start patronising more of online banking.

“The CBN is reminding individuals and businesses to start prioritizing their business transactions online so that the bank can effectively control cash in the economy. Individuals and business will have to adjust to these new measures which I foresee will lift the economy despite the hiccups that will be experienced. 

“This measure will boost the cashless policy drive of the CBN with stiff penalties to defaulters in adherence to global best practices,” he said.  

 ‘SMEs endangered’

However, some Nigerians opine that the development is believed to hold more harm than good.

According to Abiodun Ifeoluwa, “the CBN cashless policy will cripple a lot of SMEs, and millions of people will lose their savings. I pity old people who are not wise enough in cashless.”

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