The Nigeria Labour Congress (NLC) has averred that the Central Bank of Nigeria’s recent policy on withdrawal limit will send more Nigerians into poverty, stressing that it poses an abiding threat to the livelihood of millions of Nigerians and their families.
It could be recalled that the CBN had reviewed the policy that puts a ceiling of N100,000 per week for individual cash withdrawals and N500,000 ceiling for corporate cash withdrawals. But after a swift uproar, the CBN raised its weekly cash withdrawal limits set for individuals and corporate organisations to N500,000 and N5 million, respectively.
However, the NLC President, Ayuba Wabba stated that the limit would be antithetical to the Federal Government’s drive to rescue millions of Nigerians currently trapped under the ruins of poverty.
He said “The fiscal policy which on paper appears to target the rich especially unscrupulous ones who manipulate the system to launder money has now become a case of trying to kill a fly with a machine gun”.
According to Wabba, Nigerians particularly rural dwellers are the ones feeling the full punch of this policy, emphasizing that Nigeria’s economy is largely informal and substantially rural as a far greater majority of Nigerians live in rural locations.
The NLC boss believes that, “The impact of this policy can be easily felt in rural markets where agricultural commodities, livestock, and farm produce are traded.”
He noted that it is general knowledge that most rural places in Nigeria are bereft of modern banking services, adding that “A few instances would help paint a clearer picture. In Yobe State, there are only 4 local governments that have the presence of fully functional banking facilities.
“In Borno State with 27 local governments, there are only about four local councils where conventional deposit money institutions operate”.
The NLC boss said most rural dwellers and informal economy operators in areas starved of formal banking services rely heavily on cash for their daily business transactions.
According to him, these cash transactions are usually conducted with Point of Sale (POS) machines, adding that the imposition of cash withdrawal limits by the CBN means that these businesses would suffer from cash starvation shock and most would not likely survive it.
He said “The implication is that many more Nigerians would be thrown under the poverty bus”. While noting that it has been estimated that there are over 18 million POS informal economy workers in Nigeria, he said “there is no gainsaying the fact that this policy by the CBN will put majority of them out of business and rob their families their daily subsistence. With the galloping rate of multidimensional poverty in Nigeria especially rural poverty, the impact of this policy for millions of Nigerians is really scary!”
“While this policy punishes the poor, the rich especially the unscrupulous ones would hardly feel the pinch of this fiscal regulation.
“It is an open secret that many of the very rich people in Nigeria run private banks in their houses. There have been several instances where humungous stash of cash had been unearthed in many private homes in Nigeria during criminal investigations.”
He lamented that many of those targeted by this policy have the means to induce bank officials to circumvent the policy and still withdraw as much cash as they want without any consequence or in extreme cases can easily pay the prescribed fine.
He insisted that “Overall, we wish to draw the attention of the Central Bank of Nigeria to the disruptive impact of its recent policy on cash withdrawal limits especially given its counter-productive effect on CBN’s commendable drive for financial inclusion. This policy would emasculate many small businesses and informal workers from formal financial circles”.
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