The House of Representatives has setup an Ad-hoc Committee to interface with Managing Directors of deposit money Banks and the Central Bank of Nigeri
The House of Representatives has setup an Ad-hoc Committee to interface with Managing Directors of deposit money Banks and the Central Bank of Nigeria on the review and extension of implementation of the cashless policy on Wednesday.
This is sequel to a motion on urgent public importance by Hon. Sada Soli, on the ‘Need for the Central Bank of Nigeria (CBN) to review the Cashless Policy and extend the timeframe of the currency swap’ on Tuesday at plenary.
Leading the debate, Hon. Soli observed that pursuant to Section 2, paragraphs (a) and (d) of the CBN (Establishment) Act, 2007, the objects of the Central Bank of Nigeria shall be to ensure monetary and price stability, and promote a sound financial system in Nigeria, respectively.
The lawmaker also noted that banks are places where people keep their money for safety and expect to withdraw it when needed.
Rep. Soli stated that the motion is aimed at easing the expected suffering Nigerians, especially those in the rural areas will definitely go through if the deadline is not extended.
According to him, the currency stability of Nigerians may be in jeopardy if the necessary measures are not put in place before the cash swap/cashless policy is enforced, especially in the rural areas where most Nigerians live, work and trade.
He therefore wondered why the Central Bank remains adamant on the deadline even when the National Assembly, masses and other critical stakeholders have continued to call for the extension of the timeline until adequate measures are put in place.
Soli who further noted that the world over, such currencies are phased out and not forced out, called on the CBN to review the deadline for the enforcement of the cash swap policy and that the cashless policy implementation should also be extended urging President Muhammadu Buhari to intervene in the matter.
“The House recalls that in December 2022, the House of Representatives invited the CBN Governor to discuss the cashless policy and introduction of the redesigned 200, 500 and 1,000 notes.
“The House is aware that the cashless policy is in tandem with global best practices.
“The House is also aware that for such a policy to be successful, it should not be overbearing on the people and the economy.
“The House is concerned that the financial institutions in Nigeria lack the infrastructure to handle a sudden increase in customer base as well as adequate employees to handle any challenges that could arise in the process of implementing the cashless policy within the limited time given by the CBN.
“The House is also concerned that Banks and POS outlets are struggling with a shortage of the redesigned new Naira notes ahead of the CBN deadline of January 31, 2023, consequently making it difficult for them to comply with the CBN directives as regards availability of the new notes for customers.
“The House is further concerned that despite several concerns and appeals by the National Assembly, the Governors Forum, the Bank Customers Association of Nigeria, and a host of other stakeholders in the country for the CBN to extend the period for the currency swap of the new Naira notes as well as a review of the cashless policy, the CBN has remained adamant on the given deadline.
“The House is worried that due to inadequate sensitization and the rush in the implementation of the policy, the country is exposed to a situation whereby businesses or rejecting the old currency even in the face of unavailability of the redesigned new naira notes.
“The House is also worried that as a result of the rigidity in the implementation of the policy, there is a tendency of decline in the economy if cash withdrawals are delayed due to short supply of the new Naira notes.
“The House is cognizant that in order for the policy to be successful and acceptable, the CBN should keep their relationship closer to reality, rather than theorized assumptions.
“The House is also cognizant that in global best practices, currencies are phased out, not forced out, thus adequate time is required for such policy.
“The House is further cognizant that the policy, though a good one, is not fair on the incoming government which will require a smooth transition, which will help to promote and financial system in the country.
“The House is disturbed that coercing the people to accept the new CBN policy within such a timeframe will pose serious monetary challenges and impact negatively on micro-economic activities across the country,” he noted.
Speaking in favour of the motion Hon. Ahmed Jaha, member representing Chibok federal constituency of Borno State, noted that CBN officials deployed to one of the communities within his Constituency do not have sufficient cash.
He said: “I just came back from my constituency yesterday, I want to use this opportunity to commend the CBN for taking certain steps to address this issue in my constituency.
“As I am talking to you, CBN staff are in my constituency since yesterday. They went there with some amount to swap the little currency with people. It is a very good move but I also realised that the amount taken there is not enough to swap the available currency in the hands of the people.
“For the past 10 years, my constituency is operating without a single bank branch in my constituency. People transact, do their activities and do other activities in cash. I have a ward in my constituency in Kirawa Ward on the border of Cameroon, only N1 million was taken to the ward to swap, when they have N100 million.
“When they were given the money, they gave them 100 notes, while people are doing transactions in 200, 100, and other lower denominations”
Hon. Obinna Chidoka supported the motion but suggested a six month extension and that the House invite Chief Executives of Commercial Banks to give reasons for the scarcity in banks.
The Speaker Femi Gbajabiamila ruling on the motion agreed with the lawmakers on the need to review the policy and further constituted a 14 man Ad-hoc Committee to be chaired by the House Leader, Alhassan Doguwa, to interface with bank MDs and CBN on Wednesday, January 25 and report back to the House Thursday this week.
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