The Coalition of Northern Groups (CNG), is extremely worried about the imminent of crises arising from the Central Bank of Nigeria’s pronouncement of a regime of harsh policies on cash withdrawal limit, noting especially, that the livelihood of many individuals and enterprise sustainability would be impacted.
As the representatives of various interest groups from Northern Nigeria, the CNG, after watching and analyzing the situation carefully, has come to believe that the CBN policy is another not-well-thought-out, unreasonable and unacceptable action perpetrated by certain dubious interests led by Godwin Emefiele against Nigerians collectively, and northerners in particular.
We find it ridiculous for Emefiele and the CBN, after plunging the country into economic crisis, that involves high inflation, poor exchange rate, and dwindling foreign reserve as symptoms of mismanagement and bad economic policies, to so arrogantly insist on the enforcement of this policy despite an order of the National Assembly to the contrary .
The CNG notes that the timing without adequate preparation and sensitization of the critical mass that drives the economy (the SMEs and MSMEs) could prove counter-productive and further drive many below the poverty line.
We note also that the banking infrastructure and mobile/digital facility to drive the cashless policy in Nigeria and in the North in particular, are not sufficiently developed.
As usual, not one to remain silent in the face of this constancy of disastrous Monetary Policies by the CBN that potentially affect the livelihood of Nigerians and the people of northern Nigeria, the CNG hereby arrives at the following inevitable observations:
- According to data available from the Nigeria Inter-Bank Settlement System, there are 134 million active bank accounts in Nigeria. When narrowed to BVN ownership, the account holders turned out to be 52.1 million.
- This in effect means that out of 200 million Nigerians, only 52.1 million have bank accounts and a large percentage of that belongs to corporate bodies, civil and public servants, not individuals.
- There are also 1.1 million POS in Nigeria, about 93% of it are concentrated in urban areas.
- Where 148 million people in the country are without bank account this policy by the CBN will only plunge the economy into further chaos.
2. NORTHERN NIGERIA
CNG is convinced that th policy introduced by the CBN is totally against Nortern Nigerian interest for the following reasons:
- The North has the lowest financial Inclusion rate.
- Out of the total number of deposit money bank branches, the North has less than 25%.
- Out of over 800 Microfinance banks in Nigeria, the North has less than 20%. ( Lagos has over 150 MFBs, the whole North East has less than 50, Borno has 3 MFBs. Yobe has 1).
- States like Borno and Yobe have not more than one branch per DMBs and they all concentrate in the state capital while other LGs are totally excluded from the banking system.
- This policy deliberately aims to cripple the Northern entrepreneurs as Northerners are generally micro and medium industry investors who normally transact in billions on especially market days and they deal with cash payments looking at unavailability of banks in their localities.
- The apparent insensitivity in Emefiele’s action at a time when hunger is stalking millions of homes, inflation making life difficult by the day, people losing jobs, businesses closing down, infrastructure decaying, young people losing hope of being employed, hospitals filled with people who suffer mysterious illnesses, and cannot afford the fees, speaks of a deliberate agenda to completely cripple the economic viability of northern Nigeria.
- This hostile and damaging policy, coming at a time when northerners bear the brunt of bad or poor governance more than other Nigerians with solid experience of living under leaders who are inept and whenever the economy deteriorates, the North feels the pain more sharply than other Nigerians.
- Inadequate banking system, presence, and acceptance in the North compared to number of banks in southern Nigeria and the large population of the North living in the rural areas with few microfinance banks, this policy will make it difficult for them.
- Non-functioning internet connectivity in many commmunities across the North.
- Current cashless payment channels are insufficient to meet the policy’s demand which is complicated by a lack of financial infrastructure.
- Because the system is largely driven by ICT, the policy is vulnerable to the risks of fraudulent practices, as any security flaws can be exploited by the astute fraudster to perpetrate fraud.
- Whereas electricity is a critical infrastructure for an efficient e-payment system, regrettably, Nigeria cannot boast of consistent power supply in both urban and rural areas which will undoubtedly make seamless transactions difficult.
- Because of the technology involved, some level of literacy is required to operate successfully in a cashless economy. As a result, Northern Nigeria, which has a high rate of illiteracy, will face serious challenges and will be negatively impacted by the policy.
- It is impossible to save the naira without a large foreign account saving, and there cannot be economic health with multiple exchange regimes, a creation of corruption in the CBN management.
- Dollars are allocated to the wrong people while BDCs are deliberately killed and in their place, government officials, family and friends and party men have access to official Dollar becoming the defacto BDCs in the country without either control or regulations.
- Millions of artisans, traders, market women and farmers carry out their daily economic lives using cash.
- The size of Nigeria’s informal economy is vast, estimated to be 57.7% of the total size. By rapidly withdrawing most cash from the market without an alternative widely used system being available will smash the economy
- If the process is rushed and the economy loses confidence in the system due to a high level of fraudulent activity, the Nigerian economy will suffer severely.
- The policy will most certainly take away the jobs of thousands of young people operating POS, at a time Nigeria is battling with serious unemployment, particularly among the young population.
- The new policy wil worsen the already tight economic environment in especially, communities with blind spots or poor network connectivity.
- The policy implementation timeline and available infrastructure suggest a difficult time for the public with negative consequences that could lead to crises.
- It is likely to cause disruptions in the economy, especially in rural areas where bank branches are few and telecommunication networks are very weak.
- Small and medium enterprises (SMEs) that have small working capital tend to hold most of it in cash in order to keep their businesses running.
With the inflation rate hovering around 20 percent and over 100 million Nigerians in multidimensional poverty, the worst scenario would be to allow government to further cripple the economic activities of Nigerians with this unfavorable CBN policy.
In the light of the above observations and highlighted complications and attendant risks, the CNG hereby resolves to:
- Condemn wth all our might draconian, inhuman, absurd and absurd blatant insistence by Emefiele on setting traps of processing fees for individuals and businesses who desire to withdraw their hard-earned money from the bank for legitimate and genuine business transactions.
- Call for the immediate unconditional resignation of Emefiele from the position of the Governor of Central Bank of Nigeria and an unreserved apology to Nigerians.
- Call on the National Assembly in the alternative to initiate the immediate process of removing Emefiele from the position of the Governor of Central Bank of Nigeria, order for his probe and consequent prosecution.
- To strongly and unequivocally back the National Assembly’s resolve to compel Emefiele to suspend the implementation of this policy and hold him to account for his roles in causing the dwindling value of the Naira, rising inflation, oil theft, ballooning foreign debt, and getting millions of Nigerians into poverty realm.
- Embark on the mobilization of Northerners for a massive protest to resist the attempt by Emefiele or any other authority to place more misery on Nigerians at a time when businesses are groaning under the burden created by not-well-thought-out Government policies.
For the avoidance of doubt, the CNG is resolved to taking further necessary actions to stop Emefiele and the CBN from going ahead with the implementation of this and other manifestations of inconsistencies and misalignments between the fiscal and monetary policies of the Government.
This is because it is embarrassing that the CBN has been making announcements without any regard to the constitution and other relevant laws on the national economy and complete defiance of the Money Laundering Act.
Section 2 of the Money Laundering Act, 2022 for instance, provides as follows: “2. (1) No person or body corporate shall, except in a transaction through a financial institution, make or accept cash payment of a sum exceeding (a) N5,000,000 or its equivalent, in the case of an individual or (b) N10,000,000 or its equivalent, in the case of a body corporate.
“(2) A person shall not conduct two or more transactions separately with one or more financial institutions or designated non-financial businesses and professions with intent to (a) avoid the duty to report a transaction which should be reported under this Act and (b) breach the duty to disclose information under this act by any other means.”
The action of the CBN therefore amounts to a brutal violation of the fundamental right to property under Section 44 (1) of the 1999 Constitution of the Federal Republic of Nigeria (as amended).
To the extent that the restrictions specified in the Policy do not come within the recognized exceptions to the enjoyment of that right under Section 44 (2) of the Constitution, they are ultra vires, invalid, null and void.
The restrictions constitute a compulsory acquisition of the right (or interest) of a person to access or dispose of his or her money freely without let or hindrance within the contemplation of Section 44 (1) of the Constitution.
We therefore hold the draconian decision by Emefiele unacceptable as it is in clear breach non-negotiable fundamental right of Nigerians that cannot be derogated from under Section 45 of the Constitution; and to that extent, absolute.