Editorial
CBN’s New Cash Withdrawal Limits
In an obvious move to reposition Nigeria’s national currency, the Naira, for effective performance and control of the amount of cash in circulation, the Central Bank of Nigeria (CBN) has introduced new cash withdrawal limits for banks and other financial institutions. The new policy comes on the heels of its recent currency redesign project, in which it expresses concerns about immense amounts of cash outside the banking system.
The directive on the new cash withdrawal limits was contained in the CBN letter dated December 6, 2022, which was addressed to all Deposit Money Banks, and other financial institutions like Payment Service Banks (PSBs), Primary Mortgage Banks (PMBs) and Microfinance Banks (MFBs). The letter was formally endorsed by Mr Haruna Mustafa, Director, Banking Supervision Department, CBN.
Under the new regulations, the Central Bank capped weekly over-the-counter (OTC) cash withdrawals by individuals and business organisations to N100,000 and N500,000, respectively. However, the apex bank states that withdrawals above the threshold will be charged a processing fee of 5% for individuals and 10% for corporate bodies. Also, third-party checks over N50,000 are not eligible for OTC payments, while the existing limit for cleared checks remains at N10 million.
The new cash withdrawal regime further limits maximum cash withdrawals via Automated Teller Machines (ATMs) to N100,000 per week and N20,000 per day. According to the CBN, ATMs can only load denominations of N200 and below, while the maximum amount that can be withdrawn via point-of-sale (POS) terminals is limited to N20,000 per day.
However, the Central Bank declares that in cases of last resort, not more than once a month, if cash withdrawals exceeding the prescribed limit are required for legitimate purposes, the withdrawal amount of individuals and corporate organisations shall not exceed N5 million and N10 million respectively, and shall comply with the referenced processing fee. This would be in addition to enhanced due diligence and further information requirements.
Furthermore, the CBN says that monthly re-runs of cash withdrawal transactions exceeding the prescribed limit should be referred to the banking supervisory authority. While needing to comply with existing Anti-Money Laundering/Combating the Financing of Terrorism regulations related to Know Your Customer (KYC), ongoing customer due diligence and suspicious transaction reporting, among others, are required in all circumstances.
Moreover, the Central Bank encourages bank customers to use alternative channels including Internet Banking, Mobile Banking Apps, USSD, Card/POS, eNaira, etc., for banking transactions. The CBN also warned banks and other financial institutions that aiding and abetting circumvention of the new policy would attract severe sanctions.
Current moves by the CBN point to an effort to curb vote-buying ahead of the 2023 general elections, check and diminish the amount of cash in circulation. It is also aimed at containing the ease by which the Nigerian currency has been counterfeited by criminal gangs. Most significantly, these policies would help the apex bank regain control of excess cash floating in the economy, thereby upscaling the value of the Naira and curbing inflation.
The CBN governor, Godwin Emefiele, had revealed in last October that out of N3.23 trillion Naira in circulation, N2.73 trillion was lying outside Nigeria’s banking system. This figure, which represents about 85%, is what the CBN is trying to mop up back into the system to be able to control the money supply. We commend the bank for the initiative, which is quite positive. Many Nigerians will benefit from the new policy.
The government and banks would equally gain from the practice in the sense that it would reduce the cost of holding large amounts of cash, and capture more e-transactions and e-revenue for the institutions. Crimes like armed robbery, burglary, and kidnapping for ransom will drop because it will be difficult to raise the huge amount of money the criminals usually demand from the banking system.
Drastically reducing cash in circulation will likewise compel more transactions to be conducted electronically. There would be less currency outside the banking system, which will make monetary policy interventions more effective. This would reduce the size of the black economy and provide more intelligence for the tax authorities to expand the tax net to economic activities which were previously under the radar. Additionally, the volume of Naira to be printed every year will reduce significantly.
Apparently, the CBN is trying to drive a cashless economy by placing stiffer restrictions on cash withdrawals. However, a more effective strategy could have been to first enhance the cashless economy infrastructure to remove or significantly reduce the challenges and irritations that people experience when transacting using electronic payments. Many Nigerians regularly experience unsuccessful electronic payment transactions either due to bad network, switch failure or even lack of electricity to charge the devices.
A different strategy could have been employed to make a cashless economy attractive as was the case with Mesa in East Africa, so people voluntarily embrace it rather than the stick approach, which will, unfortunately, punish many people for circumstances that are beyond their control, especially the large unbanked population in rural areas. If not properly handled, the situation could result in a lull in economic activities, which may slow down GDP growth in the short to medium term.
Though there will undoubtedly be implementation challenges, the policy is a step in the right direction for sanitising the economy. The excess liquidity floating around in the economy needs to be mopped to minimise price escalation. However, the slow adoption of e-banking, the rise in cybercrime coupled with an election year, and other macroeconomic factors could dramatically slow the benefits of the policy.
Last Friday, the National Agency for Food and Drug Administration and Control (NAFDAC) destroyed fake, counterfeit and substandard drugs worth over N1 trillion in Awka, the Anambra State capital. Recall that for one month, NAFDAC shut the Onitsha Drug Market, restricting shop owners from coming to the market, barricading it with military personnel, while officials broke into and ransacked shops in search of fake drugs.
NAFDAC’s Zonal Director for South-East, Dr. Martin Iluyomade, revealed some of the drugs destroyed to include Analgin, Tramadol, and various paediatric pharmaceuticals, which had been stored in prohibited areas or were banned by the World Health Organisation (WHO). Iluyomade said the closure and raids of the markets where the drugs were confiscated was in response to public complaints regarding the prevalence of fake, substandard and counterfeit drugs in the South-East.
He said: “Many of these drugs are banned, such as Analgin and certain paediatric medications, and they were stored in places that violate WHO regulations. It is our responsibility to ensure that these products are safe and fit for human consumption. These drugs were transported in a 140-foot truck, valued at over N1trillion, and were supposed to be stored at specific temperatures. However, they were kept in markets that do not meet the required standards.
“The volume of drugs found in these two markets could destabilise the country, and many of these are narcotic drugs associated with criminal activities. People who consume these drugs are not only harming themselves but also using them to commit crimes, which contributes to the growing insecurity in our country.”
Unfortunately, that is the chilling reality of counterfeit drugs, and it is a problem NAFDAC is relentlessly fighting. This dramatic action underscores the monumental scale of the problem and the unwavering commitment of NAFDAC to protect public health. The massive destruction highlights the pervasive nature of the counterfeit drug trade and the resources NAFDAC dedicates to combatting it.
Counterfeit drugs are dangerous, even deadly. They can contain the wrong dosage, the wrong active ingredients, or even harmful substances. Imagine taking a pill you believe will cure your illness, only to find it contains something entirely different – something that could worsen human condition or even kill. That is the terrifying reality of the counterfeit drug market.
The insidious world of counterfeit medications poses a grave threat, as these fake drugs often harbour toxic fillers or entirely different, untested chemicals. The consumption of such substances can trigger a cascade of adverse reactions, varying from minor allergic responses to catastrophic organ failure, leaving vulnerable individuals severely harmed. In this critical battle for public health, NAFDAC stands as our frontline defender.
Through tireless monitoring, rigorous inspections, and decisive action against those who peddle these dangerous fakes, NAFDAC acts as a vital gatekeeper, ensuring the safety and efficacy of the medications we depend on. Supporting NAFDAC’s mission is paramount, as it directly equates to safeguarding the lives and well-being of our Nigerians by preventing the proliferation of these harmful and potentially lethal counterfeit medications.
Given the breadth and criticality of NAFDAC’s mandate – regulating everything from food and drugs to cosmetics and medical devices – it is imperative that the Federal Government bolsters the agency’s resources and capabilities. This monumental task, encompassing the entire lifecycle of regulated products from importation to usage, demands substantial investment in infrastructure, advanced technological tools, and a highly skilled workforce.
Under-resourcing NAFDAC risks compromising its ability to effectively monitor and enforce regulations, potentially leading to substandard or counterfeit products entering the market, with devastating consequences for public health and safety. Therefore, increased funding, enhanced training programmes, and optimised operational systems are essential to fortify the agency’s effectiveness and ensure it can continue to protect the Nigerian populace.
No doubt, NAFDAC currently faces numerous hurdles in fulfilling its mandate. These challenges range from inadequate funding and outdated equipment to a lack of personnel and poor training. Insufficient funding directly translates to limited capacity for effective inspection, testing, and enforcement. Imagine trying to police a vast country with only a handful of officers – the task becomes virtually impossible. This lack of resources allows substandard and even dangerous products to enter the market, posing serious risks to public health.
The Federal Government must prioritise NAFDAC’s needs and take decisive action to support, equip, and empower this vital agency. NAFDAC is a cornerstone of public health in Nigeria and its health and economic well-being depend on its support. By providing financial, technological, and human resources, the government can strengthen the organisation’s capacity to protect Nigerians and contribute to national development. Tinubu’s administration must ensure that NAFDAC had the tools it needs to succeed. The lives of millions depend on it.
The Nigerian Meteorological Agency’s ominous forecast of severe flooding in nine states as the rainy season draws nearer serves as a reminder of the country’s vulnerability to environmental disasters. With coastal states like Lagos, Ogun, Delta, and Rivers particularly at risk, the immediate need for proactive mitigation measures cannot be overstated.
This warning demands swift and decisive action from state governments, including the activation of urgent environmental interventions and a concerted effort to encourage citizens residing in flood-prone areas to relocate preemptively. Nigeria’s history is unfortunately punctuated by the devastating impacts of floods, a recurring crisis often compounded by inadequate infrastructure, haphazard urban planning, and a frustratingly slow response to impending threats.
The devastating 2024 floods serve as a stark and traumatic reminder of the catastrophic consequences of neglecting proactive flood management. With over 300 lives lost and more than 1.2 million people impacted across 31 states, the scale of the disaster underscores the urgent need for decisive action.
The UN has allocated $5 million to Nigeria to enhance flood preparedness, aiming to strengthen early warning systems, support emergency response initiatives, and provide relief to vulnerable communities. However, the ultimate responsibility for implementing and maintaining effective flood management strategies lies with Nigerian authorities at all levels, requiring a shift from reactive responses to comprehensive preventative measures.
Nigerian governors should take urgent measures, such as alerting residents in flood-prone areas and removing illegal structures blocking waterways to offer a glimmer of hope. The pervasive complacency across some states remains deeply concerning. This reactive approach, waiting for disaster to strike before responding, has repeatedly resulted in devastating consequences and underscores a critical need for a paradigm shift in flood management plans.
Specifically, in states like Rivers which is surrounded by water, a multi-pronged approach is needed, including strengthening infrastructure, enhancing drainage systems, promoting community engagement, and implementing sustainable land-use planning, while also considering nature-based solutions and early warning systems.
The cyclical nature of flooding in the country is exacerbated by human activities. The dangerous practice of constructing buildings on natural waterways and the rampant issue of indiscriminate waste disposal into drainage systems directly contribute to the problem. These actions obstruct the natural flow of water, leading to overflows and ultimately, the widespread flooding that plagues the nation.
The government’s inaction regarding waste management and environmental upkeep is a significant contributor to the looming environmental crisis. The absence of efficient waste disposal systems, coupled with the lack of environmental projects and proper maintenance of vital drainages and waterways, breeds unsanitary conditions and ecological damage.
This negligence carries a high price, manifesting in public health risks, degraded ecosystems, and increased vulnerability to natural disasters. To reverse the trajectory, a comprehensive strategy is paramount. Importantly, regulatory bodies need to step up their enforcement efforts, ensuring strict adherence to environmental regulations and imposing meaningful penalties on those who violate them.
Such measures are vital not only to curb pollution and irresponsible practices but also to send a clear message that environmental accountability will be enforced. There is a pressing need for the government to overhaul waste management systems, ensuring efficient collection and disposal to prevent blockages in drainage channels.
To mitigate future disasters, National Emergency Management Agency (NEMA) and the National Orientation Agency (NOA) are urged to launch comprehensive awareness campaigns to educate the public about environmental degradation risks and promote personal responsibility in flood prevention. This will empower citizens to adopt sustainable practices, reduce flood risks, and protect vulnerable communities.
The September floodings in Borno State, resulting in the collapse of the Alau Dam, highlighted Nigeria’s vulnerability to disasters. To mitigate the impact, the government and citizens should work together to demolish structures obstructing natural waterways, dredge rivers and canals, and equip emergency response units to act swiftly in case of a flood.
Long-term strategies must focus on sustainable urban planning, the construction of dams, and continuous public education on environmental stewardship. Crucially, transparency and accountability of ecological funds are paramount to ensure that allocated resources effectively address the challenges at hand. Nigeria should draw valuable lessons from countries like Denmark and the United States, which have successfully implemented flood mitigation plans.
Increased awareness efforts have already resulted in a noticeable reduction in flood-related incidents in subsequent years, underscoring the efficacy of effective measures. State emergency agencies must collaborate, sharing resources and information to create a unified front against flooding. By embracing a culture of preparedness and environmental consciousness, Nigeria can safeguard its communities and build resilience against future natural disasters.
Governor Siminalayi Fubara has exemplified a proactive and resolute approach in steadfastly advancing the agenda of his administration, even in the wake of the Supreme Court’s ruling, which officially recognised Martins Amaewhule as the legitimate Speaker of the Rivers State House of Assembly. This unwavering commitment to governance and developmental progress underscores the Governor’s dedication to fulfilling his responsibilities to the people of Rivers State, regardless of the prevailing political and legal circumstances.
In meticulously orchestrating and initiating a broad spectrum of project inaugurations in multiple locations within Rivers State, Fubara articulates his resolute determination to honour the assurances given to Rivers people. His strategic focus on delivering tangible developmental projects not only highlights his determination to ensure the continued advancement of the state but also reinforces his vision of sustaining infrastructural growth, social welfare improvements, and economic empowerment.
This proactive stance can be viewed as a strategic move to showcase his administration’s competence and dedication to the public. Through the continuation of infrastructure endeavours and social initiatives, Governor Fubara aspires to reinforce public endorsement and effectively handle the complicated political situation resulting from the Supreme Court’s decision. The commissioning events serve as concrete evidence of the government’s initiatives and achievements, highlighting its commitment to progress.
The announcement of the projects generated widespread excitement throughout the state, with residents eagerly anticipating the institution of major infrastructure developments. The completion of these projects signifies an important milestone for the administration, demonstrating its dedication to fulfilling promises and investing in the state’s future. The Governor’s emphasis on the projects’ potential to drive economic growth, improve public services, and enhance overall quality of life, reflects his administration’s focus on delivering tangible benefits to the people.
The commissioning ceremonies are highly publicised events that attract considerable public attention and participation. This underscores the importance of the projects in enhancing the well-being and infrastructure of key areas in Rivers and Bayelsa States. The projects cover a wide range of sectors including housing, firefighting and emergency response, security, healthcare, education, and judiciary welfare, reflecting a comprehensive development approach essential for community progress.
The allocation of resources across various sectors demonstrates a deliberate strategy to address urgent needs and improve residents’ quality of life. In its efforts to foster safer communities, the government focuses on enhancing security and emergency response measures. Additionally, investments in healthcare and education underline a long-term commitment to human capital growth and well-being.
Among the projects scheduled for commissioning by the state government are the Government House Staff Quarters, the State Fire Service Headquarters with firefighting vehicles, the handover of a helicopter to the Nigerian Air Force, the Borikiri Fire Service Station, and the construction and furnishing of the palace and residence of the Akpor monarch. These projects address critical infrastructure needs and highlight the government’s dedication to enhancing public services and community welfare.
Other projects include the judges’ quarters, Bori General Hospital, Okrika Grammar School, as well as the furnishing, equipping, and electrification of the Nigerian Law School, Yenagoa Campus, and the Rumuodomaya Fire Service Station along with firefighting vehicles. Each of these projects plays a crucial role in improving the quality of life for residents and fostering development across key sectors in the region.
Governor Fubara’s actions speak volumes about his commitment to propelling Rivers State forward. The inauguration of diverse infrastructure projects is a tangible demonstration of his administration’s focus on progress and effective service delivery. This ardent approach extends beyond mere construction; it is a strategic investment in the future. Recall that in December last year, the Governor embarked on a schedule of projects commissioning and flag-offs to advance infrastructure and security across the state.
Through the prioritisation of key industries and allocating resources to essential sectors, the government is laying the groundwork for a more robust and prosperous Rivers State, offering its citizens enhanced opportunities and a higher quality of life. Through these initiatives, Governor Fubara is not just building roads and facilities; he is building trust, fulfilling his promises, and solidifying his leadership as a driver of sustainable development in the state.
The government is clearly committed to improving Rivers State. To say that Governor Fubara is rapidly transforming the state’s landscape with bold development initiatives is simply stating the obvious. In a short period, the Governor has turned the entire state into a vast construction site, with significant projects either underway or already completed — all in spite of the ongoing political challenges.
We join the good people of Rivers State, Nigerians, businesses, and individuals in commending and celebrating the Governor during this remarkable season of project commissioning and inauguration. The projects delivered so far reflect an extraordinary transformation, positioning the state as an attractive destination for investors. This progress stands as a testament to His Excellency’s commitment to leaving Rivers State far better than he found it.