Financial experts have said that the Central Bank of Nigeria’s recently imposed withdrawal cap will have more impact on small and medium enterprises.
Small company owners in Nigeria worry that the policy will make running their operations more expensive.
The maximum weekly cash withdrawal over the counter for business organizations and individuals is now limited to N500,000 and N100,000, respectively, under the CBN’s new withdrawal policy.
The new withdrawal regulation further sets a weekly cap on cash withdrawals via Automated Teller Machines at N100,000. A daily cap of N20,000 applied.
In a letter to local commercial banks, CBN made this information known.
The policy, which is scheduled to go into effect on January 9, 2023, had drawn criticisms, but the CBN made it clear last Wednesday that PoS operators could request exemptions.
A financial specialist and the lead director of the Centre for Social Justice, Eze Onyekpere, claimed that the policy was hastily drafted.
In an interview with Daily Post, Onyekpere claimed that before announcing the policy, the CBN should have adequately consulted relevant parties.
Onyekpere said; “That policy looks like it was not properly mapped out, like a midget reaction that puts the cart before the horse. Such a far-reaching policy should have benefited from wide-ranging consultation of various stakeholder groups, as well as an empirical study, which will reveal existing laws and policies and the social impact on the people.
“Based on the study done and the feedback from consultations, then, you will have a well-planned policy which would reflect the input of multiple stakeholders.
“Now, that was not done before the policy was announced, which reminisces of the military era.
“If you know already, you can’t withdraw more than N150, 000 a day at the bank for individuals and for the corporate organisation is N500,000, and there are also provisions for the money laundering law which set limits for what you can withdraw daily.
“Limiting this money from N150,000 a day to saying you can only withdraw N100, 000 per week and limiting it to N20, 000 per day now that money has no value is unacceptable. If you want to buy a bag of rice, you can’t do it with cash because you have to do a cash transfer or find another way to do it. The value of the money is so low.
“What I’m trying to say is that the amount was too small, there was no consultation; this is something you should do after sensitising people for some months, you don’t just announce it before Christmas.
“A lot of businesses, especially small-scale businesses, will be adversely affected; it may increase the cost of doing business, because if you have to do more than that, you will pay the penalty.”
The financial expert said Nigeria was not ripe for the policy, adding that more time should have been given to sensitise Nigerians.
“I do not support this policy because we are not ripe for it at this time; we need more time to sensitise people and make sure communication facilities are available. We don’t need to make policies and laws just because we have the power.
“We must ensure that the poorest of the poor are put into consideration when making laws. We can say in the next six months this, and this should be done, so that means we have to amend our money laundering laws and the limits of money we can take across the counter. We have to look at other relevant laws underlying this money laundering law,” he added.