NewStats: 3,261,917 , 8,175,548 topics. Date: Saturday, 31 May 2025 at 03:08 AM 6g5v24

Nigerian Central Bank Policy On Cash Withdrawal Limits May Hinder Economic Growth As It Happened In India—Report

A report by the Washington Post titled, ‘Why Nigeria Is Clamping Down on Its Vast Cash Economy’ which was published on Thursday morning has explained how the country’s Central Bank policy on cash withdrawal limits may hinder Nigerian economic growth.

The apex bank had imposed a weekly limit of N100,000 and N500,000 withdrawals on individuals and organisations, starting from January 9, 2023.

The policy, according to the US-based media organisation, has a high likelihood of repeating what happened in India in 2016.

“Nigerians have until the end of January to exchange their highest-value banknotes for freshly-issued bills. The aim is to bring an estimated 2.7 trillion naira ($6 billion) that circulates in informal channels into the regular banking system.

“But cash is the lifeblood of Africa’s biggest economy and there’s concern that the switchover could trigger the kind of chaos that broke out when India tried something similar in 2016,” the report stated.

According to the report, the policy's implementation will be difficult due to the country's high rate of informal transactions.

The report continued: “[i]The central bank is changing the colors of the 200, 500 and 1,000 naira notes and the new bills will go into circulation from Dec. 15. The hope is that when people drop off their old notes, many will choose that moment to switch to making electronic payments via a bank for their day-to-day finances. [/i]

“It’s harder for the central bank to do its job when an estimated 85% of local currency doesn’t go through the banking system and well over 90% of transactions are made using cash. Announcing the currency move in October, bank Governor Godwin Emefiele said it would help to control runaway inflation. It could also reduce corruption and organized crime. The country has a thriving kidnapping industry that sees thousands of Nigerians abducted by bandits each year, with relatives often paying cash to secure their release.

“The amount of cash in circulation has more than doubled since 2015 to 3.23 trillion naira. Yet almost half of the population of 220 million don’t have bank s. Nigeria has just 4.5 bank branches for every 100,000 people, one of the lowest ratios in the world. The risk is that banks are overwhelmed with new customers trying to open s to deposit their old cash as the deadline approaches.

“They’ve begun ad campaigns and hired 1.4 million agents to fan out to markets and rural areas to encourage people to open s, hoping to avoid a last-minute rush. The central bank suspended charges on cash deposits at banks and directed lenders to open their branches on Saturdays to encourage people to turn in their old banknotes.

“Many have rushed to buy dollars, causing a temporary shortage of the US currency and sending the naira briefly to a record low on the black market. Finance Minister Zainab Ahmed has questioned the policy, arguing that it could weaken the currency and slow economic growth. But it was upheld by President Muhammadu Buhari, who backed it as a way to tackle corruption. Grain and gold traders in the northern city of Kano have said their business has been booming as some people try to stay off the authorities’ radar by converting cash into hard assets.

“India implemented a similar demonetization policy that forced farmers to trek for miles to exchange their old banknotes. The move led to cash shortages, long lines at banks and post offices and a slowdown in economic activity. It largely failed to reduce the amount of cash circulating outside the banking system or discourage corruption. Emefiele insisted that Nigeria can avoid India’s fate as banks have taken measures to ease distribution of the new notes and extend access to banking services.”

Human rights lawyer, Femi Falana, SAN, had also described the policy as unlawful, asking President Buhari to immediately overrule the policy.

Falana explained that the policy breached Section 2 of the Money Laundering Act and as a result, he urged President Buhari to direct the immediate withdrawal of the policy.

https://saharareporters.com/2022/12/15/nigerian-central-bank-policy-cash-withdrawal-limits-may-hinder-economic-growth-it

It won't work sef

That policy has come to stay. Anyone that doesn't like it can relocate to India

Please everyone don't mind this fraudsters Anthony okeke is back with a full forces to continue scamming Nairaland people with the same format he has always been using, so just check the format oloriburuku man is still using to defraud a lot of people's here on Nairaland just be aware not to be scam


Please dear everyone, please forgive me for posting this, if I can help myself I won't be begging. I am seeking assistance from well meaning Nigerians to help save my life. Please sirs and ma's, my name is Faith , am a 26 years old single mom of 1. My son is just 2 years old. I used to be a hairdresser before my present predicament. In August of 2021 I fell very sick and was rush to the hospital by my neighbour. Doctor said that I will have to be itted because by the time that they have prescribed several drugs for me, my hands and both of my legs has developed rashes and started to swell up. The swelling got worst and more severe as time went by, eventually leading to multiple skin ulcers. Preliminary results shows that I was diagnosed with blood infection. I also urgently require prolonged sore Management with Vacuum Assisted Closure Device and skin graft to help regain my normal life again but unfortunately I can't treat myself because I don't have enough on me. Doctor said the procedure will require 1.3million Naira to give me my life back and so far I've been able to raise only 300 thousand with the help of my friends and some kind hearted well wishers who have taken pity for me in the past few months. Pleas sirs and ma's, am an orphan both my parents are late. I have been trying every possible best to raise the remainder to no avail. I don't have any property to sell again and I cannot work in this my condition pls I beg of you, I can't even look after my 2 years old son, that's why am pleading with any well meaning person pls


Don't even send a penny to this fraudsters

People will adjust over time.

NIGERIA ain't India, and if the cashless policy is not imposed on us, then it may never happen. There would always be critics to state how itll affect us. The benefit of this cashless policy is way too large to consider its little downturn. Nigeria besides have the fastest growing improving banking system in the world.. make the policy and see wide range improvement. Soon mobile wallets would have a platform where you can pay bike and car drivers as little as 200 via transfer without charges. The policy has both short and long term benefit while the downside is only shortie as we are one of the best in adaptation.
No rook for thieves hoarding cash any longer.

Only advice I can give any old school is to get a good android phone and also learn how to use and secure it. The world is pushing forward and sometimes people are left behind, don't be left out.

How can it hinder economy that is hindering already? How, just how again���

It's gonna be hard to for Nigerians to adjust if the new rules are implemented.
But I trust Nigerians to always find a way to 'outsmart' the law.
Las Las , we go still survive either way

If you do a legit business with huge funds, learn how to use digital money.
I know beforehand that fraudsters and money lunders will find this policy hard on them and they will pay those useless media houses to publish lies about it.

Okoroawusa:
That policy has come to stay. Anyone that doesn't like it can relocate to India

Democracy is the greatest sin against mankind. Once the number of fools outnumber the intelligent, boom you have a catastrophic environment to live in.

Okoroawusa:
That policy has come to stay. Anyone that doesn't like it can relocate to India

seandurse:
How can it hinder economy that is hindering already? How, just how again���

no b lie

To the person above me, there is nothing to adjust to. It is not going to work out.

We are in Nigeria and not India....

Some people are just pained cos it'll affect their plans.

Intelligent move by the CBN, however, Most rural farmers and traders can't even make transfer with USSD, they deal with Cash, especially the livestock market in core north of Nigeria. Most banks have network issues especially weekends. How does the government intend to manage such? Our technology is not vast like that of India. It's really going to be challenging.

Okay... Naija is nosediving....

By now, no ATM should dispense old note anymore, but Nigeria banks are still stocking ATM with old notes.

So many illiterate and semi illiterate artisans out there operate with cash! Market women, labourers, food vendors...how will they manage? Yes, People will adjust eventually; but is it the best for an economy like ours?

Hmm

As far as it will stop Tinubu from buying votes, it is a welcome development.

No more bullion van. All the money Tinubu gathered that he wants to use to influence 2023 election is wasting away now. That is why he told his boy, Femi Gbajabiamila to kick against it. You saw when House of rep kicked against it. It was Tinubu that instructed his boy to kick against the CBN limit.

If you don't like this policy fucking go to hell, everything you guys want to complain about shit you know nothing about

those guys in cbn are daft..
there is nothing bad with this policy, but these thing should be done in phases. And more education of these policy to the market women.

I was around oilmill market yesterday, those women were just raining insults on the cbn governor. I feel people should be given time, and appropriate measures should be put in place to educate ppl

You can make as much electronic transfer as usual, but not in cash

If you want to buy anything above, 5k, the seller should know how to use the banking app

Jimmythewise:
Democracy is the greatest sin against mankind. Once the number of fools outnumber the intelligent, boom you have a catastrophic environment to live in.

True talk

Yeye comparison.

Abeg we in 2022, anyone still interested in carrying Millions of cash should be arrested.

Do you know how many Nigerians have hundreds of thousands in cash at home?

Abeg, 100k cash is enough for a week, any other transaction should be online.

Na those bank charges make them Reduce.

Lol

POS outlets are everywhere,no one needs to treks miles to the bank just to make a deposit when POS agents can simply do that.


Only politicians and terrorists can only be uncomfortable with this policy

dre11:
Nigerian Central Bank Policy On Cash Withdrawal Limits May Hinder Economic Growth As It Happened In India—Report




https://saharareporters.com/2022/12/15/nigerian-central-bank-policy-cash-withdrawal-limits-may-hinder-economic-growth-it

It will work. Nigerians can easily adapt when they have no choice. Cashless is here to stay. I'm glad house of Reps ed it.