Cash Withdrawal Limit: Kachikwu accuses CBN of using cosmetic measures to address economic failures


African Democratic Congress (ADC) presidential candidate Dumebi Kachikwuhas blamed the Central Bank of Nigeria (CBN) about his recent policy on cash-out limits, accusing him of using cosmetic measures to address economic failure.

This was made known by Kachikwu while appearing on a Channels Television show, Politics Today, on Monday night.

More about the accusation: Kachikwu alleged that the CBN introduced this new cash withdrawal limit into its cashless policy to prevent potential bank runs that could lead to a panic in the financial system and, subsequently, a complete collapse of the economy. Kachukwu said:

  • Unfortunately, what is happening is that we are using cosmetic measures to address the failures of our economy, rather than tackling them head-on and finding solutions that will test (and) bring our economy back to life.’

The presidential candidate drew a connection between politics and a widely circulated case “fake news” alleging that the United States government was withdrawing dollars from circulation in Africa because of corruption and politicians.

As a result, according to him, the country’s exchange houses stopped charging dollars.

  • “That is why the naira seemed to appreciate over a period of time. It hasn’t been back to the N800 and above since. What was going on before this? There was a run on the banks; we had a lot of middle class taking their money out of the depository banks and leaving Nigeria.

No more trust: Speaking further, Kachukwu stated that Nigerians no longer trust the economy. He said:

  • “People no longer trusted the economy and people were taking out their money, buying foreign currency and leaving Nigeria in droves. So what CBN has done is what you call ‘wagging the dog’: essentially doing something to distract people from what the real issues are.
  • “They don’t want a bank run because a bank run will panic the financial system and cause a total collapse of the economy, which is why they have come up with this policy. And what does he do? It prevents you from taking your money out of the banking system, which is reversing what was happening.”

Going further, Kachikwu in his analysis said that CBN’s policy is similar to those of Greece, Lebanon, Zimbabwe and Venezuela, among others. According to him, when economies fail, central banks restrict access to money.

  • What bothers me is when you attribute it to politics, people keeping money in their vaults, buying votes, and whatever.,” he said. “I am not saying that it does not exist, that it exists. But do you know what it means to store N5 billion or N10 billion or even move N100 million in cash? The volume of that money? The bullion trucks needed to move that?

To catch: Remember that on December 6, 2022, the CBN in a new circular placed limits on cash withdrawals at the teller, ATM withdrawals and point of sale (PoS) withdrawals.

  • The main bank in a memorandum directed all banks and other financial institutions to ensure that over-the-counter cash withdrawals by individuals and legal entities do not exceed N100,000 and N500,000 respectively per week.
  • It also mandated that only N200 and lower denominations should be loaded at bank ATMs.
  • After the policy goes into effect on January 9, 2023, nationwide, all cash withdrawals above the stated limits will incur processing fees of 5% and 10%, respectively.
  • However, the policy has received both praise and criticism from Nigerians and various interest groups, with critics suggesting that full implementation of this initiative will stifle micro and small businesses.

…Cash Withdrawal Limit: Kachikwu accuses CBN of using cosmetic measures to address economic failures Read more on… Naijaonpoint.




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