Naira redesign: Governors oppose policy, say challenges are huge

The governors of the 36 states of the federation under the auspices of the Nigeria Governors Forum have opposed the Central Bank of Nigeria policy on naira notes, saying that the challenges are huge.

In a communique signed by Chairman, Nigeria Governors Forum and Governor, Sokoto State, Aminu Tambuwal, at the end of the virtual meeting held on Thursday with the CBN Governor, Godwin Emiefele, the state chief executives described the challenges as problematic to the Nigerian populace.

They called on the CBN to consider the peculiarities of states, especially as they pertain to financial inclusion and under-served locations.

They resolved to: “Work closely with the CBN leadership to ameliorate areas that require policy variation particularly the poorest households, the vulnerable in society and several other citizens of our country that are excluded.

“Collaborate with the CBN and the Nigerian Financial Intelligence Unit (NFIU) in advancing genuine objectives within the confines of our laws, noting that the recent NFIU Advisory and Guidelines on cash transactions were simply outside the NFIU’s legal remit and mandate.

“Finally set up a six-member Committee to be chaired by the Governor of Anambra State, Professor Charles Soludo and the governors of the following states: Akwa Ibom, Ogun, Borno, Plateau and Jigawa as members, to engage the CBN in addressing anomalies in the country’s monetary management and financial system.”

Recall the CBN had announced the upward review of the limit on cash withdrawals made by individuals and organisations.

Ahead of the distribution of the redesigned naira notes, the bank had on December 6 announced a new policy limiting over-the-counter cash withdrawals by individuals and corporate entities to N100,000 and N500,000, respectively, per week.

The upward review followed the request by the National Assembly to the CBN to considerably adjust the withdrawal limits in response to public outcry on the policy.

The new directive to all banks, now allows individuals to withdraw up to N500,000 weekly and organisations, N5 million weekly.

In the event of compelling circumstances where cash withdrawal exceeds the limits required for legitimate purposes, such requests will attract a processing fee of 3 percent and 5 percent for individuals and corporate organizations, respectively.

And in such cases, the financial institutions are directed to obtain some information from the customer, at the minimum, and upload the same on the CBN portal created for the purpose.

The information includes a valid means of identification of the payee (National ID, International Passport, or Driver’s License); Bank Verification Number (BVN) of the payee; Tax Identification Number (TIN) of both the payee and the payer; and the approval in writing by the MD/CEO of the financial institution authorising the withdrawal.

It also said third-party cheques above N100,000 shall not be eligible for payment over the counter, while the extant limit of N10 million on clearing cheques still subsist.

Meanwhile, the Director, Nigerian Financial Intelligence Unit (NFIU), Modibbo Tukur has reiterated that the March 1, 2023, deadline for ban of cash withdrawals from accounts belonging to the Federal Government, all its agencies, and also state and local governments remains in enforce.   This is even as he has agreed that the unit will work with the six-man committee set up by the governors under the auspices of the Nigerian Governors Forum (NGF), regarding the guidelines on cash withdrawals from all government accounts.

Recall the NFIU had said effective from that day, any government official that withdraws cash from public accounts risks investigation from the Economic and Financial Crimes Commission, the Independent Corrupt Practices Commission, and the Nigeria Police Force in collaboration with the NFIU, depending on the gravity of the situation.

According to a statement by unit’s Chief Media Analyst, Ahmed Dikko, the NFIU boss is quoted as saying: “First of all, we are ready to partner with the six-man committee they set up. We will enlighten them.

“Secondly, we acted within our functions and the law. We issued the guidelines to control the barrage of investigations that we saw coming. Our guidelines were meant to help the governors not to fight them or any public servant.”

“We’ve reached a stage that if we allow the present scenario to continue, all public institutions will drift into structured cash withdrawals of certain amounts of money which by law, standards and best practices MUST be investigated continuously which is neither desirable nor reasonable.

“We feel communities must move on by accommodating changes and adjusting to new developments.

“Last time we issued the local government guidelines we were taken to court but we won the case.

“But more importantly we need to understand that in the recent past United States FIU and United Kingdom FIU penalized Nigerian banks with fines of millions of U.S Dollars due to non-compliance. Internally, non-compliance with sections cited in the recent guidelines comes with heavy penalties on financial institutions. We did, on gentlemanly pretext, avoid it until this moment putting a fine to financial institutions expecting, gradual learning and adjustments.

“But to eternally guarantee this kind gesture is to automatically keep abusing our laws.

“We want every stakeholder to appreciate that we cooperated for far too long. We held deep breath while defending these deficiencies internationally, just to continue to remain in the international pay points and competing with others.

“Finally, we also clearly stated in the preceding advisory, that the entire financial system suffered excess liquidity and liquidity ratio infringements which put hedging pressure of demand for foreign currency and gradually destroying the value of the Naira and above all creating wide room for money laundering and terrorism affecting significantly the rural populace on top of general inflation in the open market place.”

“We are in support of working together to stop these challenges and in most progressive manner.”

(SUN)