Posted by 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 move will not stop the naira's growing 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 countrywide on January 9, 2023, the daily maximum withdrawals via point of sale (PoS) terminal of N20,000 will throw thousands of Nigerians who operate PoS terminals out of work.
The group criticized the program, 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 guarantee 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 placed into ATMs.
The CBN added that the new policy follows President Muhammadu Buhari's November 23, 2022, introduction of the revised N200, N500, and N1,000 notes.
Onwubiko of HURIWA commented,
“The CBN has gone bonkers under its current governor, Godwin Emefiele. The apex bank is unable to increase the value of the naira and is unable to release more than $550 million in stuck cash that belong to international airlines, forcing several 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 totalitarian economy. However, the naira's unprecedented decline versus the dollar is still ongoing. Emefiele ought to be fired since he has run out of ideas for ineffective experiments.
“It is known that the naira's exchange rate decreased, exacerbating Nigeria's foreign debt burden, from N196.92 in June 2015 to N414.72 in June 2022. Under Presidents Buhari and Emefiele, the naira lost 52.52 percent of its value against the US dollar while the total external debt of the nation increased by a staggering 288.18 percent in just seven years, from $10.32 billion on June 30, 2015, to $40.06 billion on June 30, 2022!
The World Bank urged that in order to achieve price stabilization of the naira, the local currency should be allowed to respond to actual forces and not be restrained by the CBN. This advice should be heeded by the next CBN governor after Emefiele's ouster.
“Emefiele's successor should also urge the Federal Government to heed experts' recommendations to stop depending on foreign aid to finance regional development projects as a method to strengthen the naira.”