The Central Bank of Nigeria's weekly cash withdrawal limits have drawn criticism from the Human Rights Writers Association of Nigeria (HURIWA), who claim that the measure will not stop the naira's worsening depreciation.
In a statement, Emmanuel Onwubiko, the national coordinator for HURIWA, claimed that CBN Governor Godwin Emefiele is chasing his tail after he ruined Nigeria's economy with bad fiscal policies during his roughly 10-year tenure at the top bank.
The group recommended that the Federal Government and the apex bank reduce Nigeria's mounting external debt, which experts have identified as the primary factor driving the depreciation of the naira against the US dollar, rather than introducing novel and pointless policies like restricting cash withdrawals or redesigning the naira.
HURIWA added that when the policy goes into effect nationwide on January 9, 2023, the daily maximum withdrawals via point of sale (PoS) terminal of N20,000 will force thousands of Nigerians who operate PoS terminals out of work.
The group criticized the policy, saying it was unfit for a nation with a 21.09% inflation rate, 133 million people living in multidimensional poverty, and a 33% unemployment rate, meaning that more than 23 million Nigerians who are employable are unemployed.
On Tuesday, the Central Bank of Nigeria (CBN) issued a directive to Deposit Money Banks and other financial institutions directing them to ensure that the weekly over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100,000 and N500,000, respectively. The maximum cash withdrawal limit per day from PoS terminals and ATMs is N20,000, according to the apex bank, which also stated that only N200 bills will be loaded into ATMs.
The CBN noted that the new policy follows President Muhammadu Buhari's November 23, 2022, introduction of the redesigned N200, N500, and N1,000 notes.
HURIWA's Onwubiko made the following comment in response: “The CBN under its current governor, Godwin Emefiele, has gone bananas. The apex bank is unable to increase the value of the naira and is unable to release more than $550 million in trapped funds that belong to foreign airlines, forcing many of them to halt service to the nation. In Nigeria, manufacturers are also suffering from a lack of access to foreign currency, with many of them dying or leaving the country.
“Among other things, it prohibited the supply of foreign currency to Bureau de Change, and now it has imposed withdrawal limits that give Nigeria the appearance of a communist economy. However, the naira's unprecedented decline against the dollar is still ongoing. Emefiele ought to be fired because he has run out of ideas for ineffective experiments.
“It is on record that the value of naira to dollar fell from N196.92 in June 2015 to N414.72 in June 2022, worsening Nigeria's foreign debt burden. Under President Buhari and Emefiele, the naira depreciated by 52.52 per cent against the US dollar, even as the country's total external debt rose from $10.32bn as of June 30, 2015, to $40.06bn as of June 30, 2022, a whopping increase of 288.18 per cent in seven years!
“The next CBN governor after Emefiele's sack should borrow the wisdom of the World Bank which advised that to achieve price stabilisation of the naira, the local currency should be allowed to respond to real pressures, and not be bottled up by the CBN.
“Emefiele's successor should also advise the Federal Government to heed experts' advice to move away from reliance on foreign assistance to finance developmental projects in the region as means to strengthen the naira.”