Nigeria's policy on cash withdrawal limit begins

Nigeria's policy on daily cash withdrawal limit has taken off, sparking discussions and concerns among individuals and corporate organizations. The policy, which sets a maximum weekly limit for cash withdrawals at 500 thousand naira for individuals and 5 million naira for corporate bodies, has raised several issues regarding its implementation and impact on various sectors of the economy. One of the key challenges highlighted by Oluwatosin Ayanfalu, Assistant Vice President of Securities Trading and Investment at Zedcap Partners, is the scarcity of the new currency notes. Despite the Central Bank's directive for banks to exclusively use the new notes for ATM transactions, many institutions are struggling to obtain an adequate supply. This shortage has resulted in a mix of new and old notes being dispensed, complicating the transition to the new policy. Furthermore, the move towards a cashless economy presents a significant hurdle for businesses in Nigeria's informal sector, particularly Point of Sale (POS) operators. With a daily cash withdrawal limit of 20,000 naira per transaction, these operators face the risk of losing customers who rely heavily on cash transactions. The informal sector, which forms a substantial part of the Nigerian economy, is still predominantly cash-based, making the transition to digital payments a major challenge. The lack of adequate sensitization and education around the new currency notes has also been a point of concern. The delay in informing the public about the security features and quality of the new notes has raised questions about the preparedness and implementation of the policy. With elections approaching in February, the impact of the cash withdrawal limit on political activities and vote-buying practices remains to be seen. In light of these challenges, stakeholders are calling for a reevaluation of the policy's implementation and deadlines. While the Central Bank remains firm on the January 31st deadline for full adoption of the new currency notes, the practical implications on businesses and individuals suggest a need for a more gradual transition. The potential effects on rural communities, where access to banking services is limited, also raise concerns about increased costs and operational challenges for those reliant on cash transactions. As Nigeria grapples with the complexities of shifting towards a cashless economy, the coming weeks will be crucial in determining the success and impact of the new cash withdrawal policy. Stakeholders across sectors will be closely monitoring developments and advocating for measures to address the challenges that have emerged.