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ACF backs CBN’s new cashless policy, faults implementation
The less cash available for all these criminals as the CBN is trying to achieve, the better for law-abiding citizens.
Arewa Consultative Forum, a pan-Northern socio-political body, has endorsed the Central Bank of Nigeria’s anticipated new policy of cashless banking, which would take effect in the nation in January 2023.
The body maintained that a cash-based economy continued to be notably expensive, ineffective, and vulnerable to attacks by wicked people.
This was stated in a statement made by Malam Murtala Aliyu, the Secretary General of the ACF, to journalists on Friday in Kaduna.
“A huge amount of time and money is needed to print the currency and a lot more still to steer it through the system. The currency notes themselves have a shelf life after which they have to be replaced. Cash is the lifeblood of the underworld: difficult to trace and quite convenient for terrorists, money launderers, smugglers, vote buyers,” the ACF said.
In a statement headlined “CBN’s Risky Plan,” the ACF Let’s be clear, it was a well-intentioned move made by the apex bank to begin the long-awaited cashless payment regime in January 2023.
The ACF, however, criticized the CBN for its implementations after making a case for the villagers, particularly in the North, who the policy would severely affect.
The forum pointed out that while considering the policy, CBN officials may have had the best of intentions, but that they “failed to consider the unforeseen repercussions of implementing it in the way they have planned; ramifications that may be quite dangerous.”
A preemptive move or “frog-jump” towards a cashless payments system, no matter how well-intentioned, can only lead the nation into a bottomless hole, claims the ACF, until the CBN is able to address several difficulties significantly.
The conference also criticized the CBN for sticking to its “unrealistic policy” of capping personal withdrawals from banks to N20,000 per day, N100,000 for a week, or N500,000 for corporate entities, as the case may be.
The forum said, “So, yes, the less cash available for all these criminals as the CBN is trying to achieve, the better for law-abiding citizens. That said, we do need to remember that the road to hell is paved with good intentions. CBN officials may have the best of intentions while contemplating this policy but evidently failed to consider the unintended consequences of implementing it in the way they have planned; consequences that may be extremely grave.
“If the CBN insists on implementing this wholly unrealistic policy of restricting individual’s cash withdrawal from the banks to N20,000 per day and N100,000 for a week or N500,000 in the case of corporate bodies, it won’t be long before we suffer a catastrophic collapse of the informal sector of the economy. More than anyone, CBN knows that transactions in commodity markets especially in rural areas are entirely cash-based.
“The villager that brings to the market his chickens, beans, onions, goat or cows does not typically have a bank account or internet skills. Cash remains the overwhelming medium of exchange for much of the country, particularly in the North. This should surprise no one as bank offices are largely unavailable even for people who are keen and have the skills to use them.
“Even by the CBN’s reports, over 38 million adults in Nigeria do not currently have access to banking services with “women, rural dwellers, Micro-Small and Medium-Sized Enterprises and Northern Nigeria” being among the most disproportionately excluded.”
“And despite its pious pretensions, it is on record that the CBN under the present management, apparently out of the desire to safeguard the interests of the commercial banks, has done much to undermine and stifle the progress of financial inclusion in Nigeria.
“Thanks to the decisions taken by the CBN, Nigeria, today, despite its size, has the dubious record of having the lowest financial penetration in all of Africa, perhaps in the world.
“Under the circumstances, the CBN will do itself and the country a world of good if it invests more efforts at addressing these challenges. It should start by ensuring that various financial institutions are created in sufficient numbers and in all parts of the country.”
The ACF added, “It should allow a level playing field for a wide range of finance providers and encourage partnerships between them. Furthermore, the CBN must enforce strict regulations that protect people’s money. It must inform, encourage and prepare the public adequately for the transition.
“Until the CBN is able to address these challenges substantially, a preemptive move or a”frog-jump” into a cashless payments system, however well-intentioned, will only land us into a bottomless pit.”
Read more: Motives for CBN’s most recent cash withdrawal policy