The Central Bank of Nigeria (CBN) recently announced new measures to bolster its cashless policy, sparking a wave of criticism from the Organized Private Sector (OPS). The new directives, effective immediately, place limitations on cash withdrawals from Point-of-Sale (POS) agents, aiming to curb fraud and promote electronic transactions. These measures include a daily cash-out limit of N100,000 per individual customer at POS agents, a cumulative daily limit of N1.2 million for agents, and a weekly withdrawal cap of N500,000 per customer across all channels. The CBN also mandated that all agent banking transactions be conducted through designated float accounts, separated from other merchant activities, and reported electronically to the Nigerian Inter-Bank Settlement System (NIBSS). These regulations signify a significant shift in the operational landscape of POS agents and the broader financial ecosystem.
The OPS has vehemently opposed these new restrictions, arguing that the CBN is detached from the realities of the Nigerian economy. Dele Oye, President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), criticized the CBN’s monetary policies as impractical and disconnected from the struggles of businesses and citizens. He highlighted the dwindling number of bank branches, particularly in rural areas, making access to traditional banking services difficult. Oye questioned the feasibility of conducting business under such conditions and expressed concern about the eroding value of the Naira. He underscored the CBN’s apparent lack of engagement with stakeholders and the detrimental impact of these policies on the overall economy.
Furthermore, concerns have been raised about the impact of these restrictions on rural communities. Segun Kuti-George, National Vice President of the Nigerian Association of Small Scale Industrialists (NASSI), pointed out the potential difficulties for individuals in rural areas who rely heavily on cash transactions and often lack access to bank accounts or POS services. He cited the example of farmers in remote locations who may lack the infrastructure to accept electronic payments, creating obstacles for buyers. While acknowledging the CBN’s intention to reduce cash in circulation and promote electronic transactions, Kuti-George emphasized the need to address the challenges faced by rural communities to ensure a smooth transition to a digital economy.
Despite the criticisms, some stakeholders have welcomed the new regulations. Olusoji Oluwole, President of the Association of Senior Staff of Banks, Insurance, and Financial Institutions (ASSBIFI), lauded the daily cash-out limit for POS agents as a positive step towards restoring their original function of serving unbanked populations. He argued that this move would realign the sector with its mandate of enhancing financial inclusion and address the problematic cash flow within the economy. Oluwole expressed optimism that the policy would curb exploitative cash transactions and improve the overall functionality of the banking ecosystem, provided it is effectively enforced. This suggests a divergence of opinions regarding the efficacy and potential impact of the CBN’s new directives.
Adewale-Smatt Oyerinde, Director-General of the Nigeria Employers’ Consultative Association (NECA), while acknowledging the positive intent of the cashless policy, cautioned against hasty implementation. He emphasized the need for a gradual approach to avoid unnecessary shocks to the economy. This sentiment reflects a broader concern that the rapid transition to a cashless system could disrupt economic activity, particularly for businesses operating in the informal sector and rural areas. The debate highlights the complexities of implementing such a policy in a country with varying levels of financial literacy and access to technology.
Dr. Muda Yusuf, Director of the Centre for Promotion of Private Enterprise (CPPE), echoed these concerns, warning that the current cash scarcity could significantly slow down business activity, especially in the informal sector and rural communities. He argued that cash remains a crucial means of payment in these areas, and disruptions in cash flow could negatively impact transactions and economic activity. Yusuf emphasized the need for a seamless payment system to facilitate economic growth, raising questions about the timing and appropriateness of the CBN’s new regulations in the context of the existing cash crunch. The differing perspectives on the CBN’s policy underscore the need for a balanced approach that promotes electronic transactions while addressing the challenges faced by vulnerable populations and ensuring a smooth transition for all stakeholders.
