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The presidential candidate of the African Democratic Congress (ADC), Dumebi Kachikwu, on Monday, faulted the Central Bank of Nigeria (CBN) for its recent policy on withdrawal limits.
The CBN had ordered Deposit Money Banks (DMOs) and other financial institutions to ensure that weekly over-the-counter (OTC) cash withdrawals by individuals and corporate entities do not exceed N100,000 and N500,000, respectively.
The apex bank said the regulatory directives take effect nationwide from January 9, 2023. The CBN also fixed daily maximum withdrawals via point of sale (PoS) terminals at N20,000.
READ ALSO: Senate Yet To Take Decision On CBN’s Cash Withdrawal Limit – Lawmaker
But Kachikwu, who made a live appearance on Channels Television’s Politics Today, accused the CBN of using “cosmetic measures” to address what he described as the country’s failing economy.
“Unfortunately, what is happening is that we are using cosmetic measures to address the failings in our economy, instead of tackling it head-on and coming up with solutions that will ginger (and) bring back our economy to life,” he said.
The entrepreneur drew a connection between the policy and an instance of widely circulated “fake news” alleging that the United States government was withdrawing dollars in circulation in Africa because of corruption and politicians.
As a result, according to him, the bureaux de change in the country stopped collecting dollars.
“That’s why the naira seemed to appreciate for a period of time. It’s not gotten back to the N800 and above since then. What was happening prior to this? There was a run on the banks; we had a lot of the middle class taking out their money from deposit money banks and they were leaving Nigeria.
“People didn’t have any trust in the economy anymore and people were taking out their money, buying foreign exchange, and leaving Nigeria in droves. So, what the CBN has done is what you call ‘wag the dog’ – essentially do something to distract the attention of the people from what the real issues are.
“They don’t want a run on the banks because a run on the banks will lead to panic in the financial system, and it will lead to a total collapse of the economy, which is why they have come up with this policy. And what does it do? It restricts you from taking your money out of the banking system, which is reversing what was going on,” he said.
Kachikwu likened the CBN policy to similar ones in Greece, Lebanon, Zimbabwe, and Venezuela, among others. According to him, when economies are failing, central banks restrict access to money.
“The annoying thing for me is when you attribute it to politics, people storing money in their vaults, vote-buying, and what have you,” he said. “I’m not saying that does not exist – that exists. But do you know what it means to store N5 billion or N10 billion or to even move N100 million in cash? The volume of that money? The bullion vans required to move that?”
Policy Open To Review
However, the Chairman of the Senate Public Accounts Committee, Senator Matthew Urhoghide, reiterated the commitment of the CBN to follow through on the policy amid an openness to some amendments.
“At the convention hearing at the committee level, even the CBN director that will be confirmed mentioned very clearly, and I think the CBN governor too corroborated that when he visited the President in Daura, I think, last week,” Urhoghide said.
“He said, ‘We are amenable to whatever changes that will meet the desire of our people, but that is not to say it is not a policy we really must embark on.’ They have said that ‘Yes, we can do some amendments to it, but to throw it away altogether, that one is not possible.’”