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HOW NOT TO GROW AN ECONOMY- the Nigerian ill- fated monetary policy and matters arising

Updated: Sep 18, 2023


The palpable confusion was infectious as all segments of the society were transfixed without anyone been sure as to the overall benefit and expectation of a policy directive that was both strange and weird.

The time-honored awe and sacrosanct that the apex bank is held have been broken and shattered into tiny bits.

It was like a lightning thunder bolt strike, when Nigerians woke up one morning to the Central Bank of Nigeria’ pronouncement and directives pegging the cash withdrawal limit of account holders to a miserly 20,000.00 Naira per day on all platforms and on all any other bank accounts

held by an individual using the instrumentality of the Bank Verification Number; this time not as a confirmatory instrument of account ownership, but as a restrictive tool to cash availability and accessibility.

Bank customers no longer have control over their finances and means of doing business to a large extent. Overnight, the Naira became an essential commodity and an item for sale in the corners and open streets for a fee, effectively to the highest bidder far beyond the dictates of the market forces.

This policy has effectively created a new brand brood of sales executives who have no single milk of human compassion both at the banks and on the streets; particularly so with POS operators who have now taken over the retail banking aspect of licensed money operators with the active connivance of a few privileged bank workers who abuse their fiduciary trust to a devastating effect as an instrumentality of get rich quick by selling the available new notes to currency speculators.

Suddenly, the pronouncements of the CBN governor now outweighs that of our lordships in our Courts of competent jurisdictions while the Supreme Court rulings are now subject to validation by the Central Bank before such rulings could have the effect of law and specific compliance.

The central bank’ stand on withdrawal limit is a leveler; reducing the society to one huge wasteland of paupers who cannot in any given situation make withdrawal of 20,000.00 Naira per day or even less to a ridiculous amount of 3,000.00 Naira or 5,000.00 Naira per day when and where available, this amount as it is, is subject to your having a benevolent account officer who has your back.

The reason behind this policy of mopping cash from the economy without strengthening other alternative means of business transactions electronically, and payment platforms is ill-advised and ill-conceived.

In an economy, where currency transition is desired and envisaged, modalities would be put in place to guide such smooth transition by either pegging to a reasonable sum the amount to be drawn from all channels of cash withdrawals on a daily basis.  Availability of the local currency is key and should be the ground norm.

The financial inclusion greatly desired by the monetary authorities have been lost. This is simply because, the new currency as it is been released into circulation is being mopped up, absorbed and traded within the circle of buying and selling or hoarded and kept in personal vaults without recourse to the banking channels for savings activities.

While small and medium enterprises are taking a direct hit and may end up complicating and losing the miles of job creation gains through various interventions; the major corporation would end up downsizing their work force, this is because every enterprise(s) has an element of direct cash impact on their operations.

The monetary authority may very well take a leap of faith by making cash available in quantum, and start rebuilding confidence in the populace that funds entrusted with the banks can and could be easily accessed and retrieve when the need for such arises.

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1 Comment

Muhammad Inuwa
Muhammad Inuwa
Jul 10, 2023

This cashless policy and N20,000.00 limit for daily withdrawal has insert hardship to citizens and cripples many business, were the

POS owners took advantages by increases untold hardships to masses and gaining overnight profit.

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