CBN Insists on Cashless Policy, Refutes Claims it Will Affect Majority of Nigerians

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The Central Bank of Nigeria has refuted claims that the new policy of fees being charged on deposits and withdrawals on savings account would affect the majority of Nigerians.

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.

Emefiele made this clarification while addressing journalists in Abuja on Friday.

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.

The House of Representatives had on Thursday through a resolution directed the apex bank to suspend the policy.

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 apex bank boss said if the CBN did not implement the cashless policy, credit cards owned by Nigerians might not be used abroad.

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.

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