The Central Bank of Nigeria has
insisted on the implementation of its new cashless policy despite lawmakers’
call to the CBN to suspend the policy.
The CBN had earlier said that
nationwide implementation of the cashless policy will take effect from March
31, 2020.
According to the policy, a 3
percent processing fee will be charged for withdrawals of amounts above
N500,000 for individual accounts, while 2 percent will be charged for deposits.
For corporate accounts, a
processing fee of 5 percent will be charged for withdrawals, and 3 percent for
deposits of amounts above N3 million.
Reacting to the policy, the
Federal House of Representatives in its plenary session on Thursday, September
19, 2019, asked the apex bank to suspend the implementation of the cashless
policy.
But the governor of the apex
bank, Mr Godwin Emefiele, while briefing journalists on Friday September 20,
2019, said, implementation of the policy would continue as announced by the
CBN.
Debunking the claims that many
Nigerians would suffer the negative impact of the policy, Emefiele said only
about five to ten percent of bank customers would be affected by the policy.
The CBN governor added that a
payment system that encourages the use of non-cash channels was desirable, if
Nigeria wishes to compete with the economy of developed countries.
He said the policy was first
introduce in 2012, adding that a lot of stakeholder engagements were done to
sensitise Nigerians on its benefits.
According to him, the cashless
policy was suspended in 2014 to allow more payment channels to be developed by
Deposit Money Banks.
Emefiele explained that since the
policy was suspended, there has been a continuous increase in currency
management cost every year.
He said, “Since the policy was
first launched, currency management costs have continued to increase
year-on-year at an average annual growth rate of 33 per cent.
“Notwithstanding, electronic
transactions have increased within the economy. We have provided alternative
channels and people have embraced it.
“This is a strategic timing of
these actions because on Monday, September 23rd, the mutual evaluation by GIABA
(Inter-governmental Action Group Against Money Laundering in West Africa) on
the country’s anti-money laundry and CFT (Combating Financing of Terrorism)
regime will begin.
“Passing the mutual evaluation
positions Nigeria as a safe and credible destination for financial transactions
across the world.
“GIABA will be in Nigeria to
access the rate at which Nigeria has embraced anti-money laundry and CFT
regime. It is important that we display and show to them that Nigeria is indeed
in conformity with their practices as enshrined in their anti-money laundry and
CFA laws.”
The CBN boss also maintained that
credit cards owned by Nigerians might not be used abroad if the apex bank did
not implement the policy.
Speaking on the recent increase
on the Value Added Tax, Emefiele said the MPC supported the decision of the
Federal Government to increase the rate from five per cent to 7.5 per cent.
He said increase in tax is the
best way to shore up revenue as Nigeria has one of the lowest VAT rate in the
world.
“The MPC endorsed the increase in
the VAT rate from five per cent to 7.5 per cent. The government has the
responsibility to fend for everybody.
“In fending for everybody means
that it has to spend money to provide infrastructure — roads, airports,
different things that will improve the lives of its people.
“There are two ways through which
government can fund these expenditures. It’s either it raises revenue or goes
for debt. You all know that the government has been criticised that the debt
stock is too high.
“You all know that government
debt service ratios are too high. What that means is that your revenue is small
because if your revenue is large, then your debt service ratios will be lower,”
he said.
Emefiele said while the decision
to increase VAT might be painful to Nigerians, the benefit of such move far
outweighed the cost, Punch reports.
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