BY AWELE OGBOGU
Like the proverbial sprits who take away one’s life the day it is sweetest to them, the Central Bank of Nigeria (CBN), which had been on the prowl with some controversial monetary and fiscal policies, has dealt a huge blow on many, notably POS operators who had looked forward to a lucrative business this Yuletide as banks in recent times made less cash available at ATMs and over the counter.
The Pointer investigation discovered that basically, a POS operator in Asaba, can earn as high as 5,000-11,000 Naira every day as long as your shop is situated in a location with high human traffic. Now, experts say it will limit cash movement and where they may be any profits at all, it would be at very low margins, possibly forcing operators out of business. But banks recently slashed withdrawals at both over the counter and ATMs, saying the policy is meant to reduce the amount of physical cash in circulation in Nigeria and encourage electronic transactions. But not so for the business operators. An Asaba-based POS operator, one of the several lining the Nnebisi Road in the Delta State capital metropolis, 35-year-old Ms. Sharon Olanrewaju, recalled how the POS took her out of the unemployment market two and a half years ago, after graduating at the age of 27, meaning she was jobless for upwards of seven years. Now amidst the threat to her new-found financial freedom, she sees the latest move by the CBN as deadly and even draconian, aimed at killing their businesses and taking her and many others out of work. Without saying, the POS business, also known as agency banking, has served as a means of livelihood for virtually all-comers in Nigeria.
The CBN has further slashed cash withdrawal from ATMs, over-the-counter, PoS and cheques. Another POS operator at Polytechnic Road, Ogwashi-Uku, Mr. Gab Obi, lamented over the “CBN’s Cash Withdrawal Limit”, describing the move as deadly to businesses. Obi, while crying out over the recent move by the CBN to restrict cash withdrawal further to a certain threshold, said the move is a threat to their businesses and job creation in general and has called on the CBN to rethink the policy, or rather, heed the call in high places, such as the Federal lawmakers to reverse the unexpected policy, adding that it is uncalled for. Data revealed that PoS transactions are at an all-time high in Nigeria, hitting 735.6 billion in the first nine months of 2024. Obi added that the latest Central Bank of Nigeria (CBN) cash withdrawal limit is draconian. The daily limit of N20, 000 from the PoS channel he raged, is a threat and will destroy jobs and the booming businesses.
The Pointer learnt that PoS transactions hit an all-time high of N735.6 billion in September 2024 alone. Per data released by the Nigeria interbank Settlement System (NIBBS), Nigerians spent a total of N60.05 trillion via PoS in the first nine months of 2024. The amount surpassed the one traded in 2022, which stood at N6.4 trillion. The report shows a 32 per cent increase on a year-on-year basis compared with the N5556.4 billion recorded in the same month of 2023. With the CBN’s latest policy, many PoS operators fear being thrown out of their jobs and losing their livelihood. Another of the endangered specie of POS operators, who plies her trade at Ogbeogonogo Market area in Asaba, Master Lucas Kaobindi, was certain that it will affect his operations because the volume of transactions will reduce drastically. He revealed that based in that commercial nerve centre of Asaba, numerous customers, particularly individual traders, carry out several withdrawals in a day over the N20, 000 threshold, already making it a disaster for him. Also called Agency banking, it was recognised as a financial inclusion initiative by the CBN and a vital tool in developing the economy. Kaobindi therefore wondered if the apex bank suddenly woke up to a different reality. Yet, Mr. Desmond Efe, an economist at Delta State Ministry of Economic Planning said reality remains that Agency Banking has a major role to play in economic rejuvenation, especially poverty reduction, job creation, wealth creation and improvement of living standards. He pointed to a recent survey, saying the chance of making extra income is a significant boost to becoming an agent. The number of bank agents and outlets per 1,000 square metres went up by 380.2 per cent to 680.9 per cent in 2021 from 141.8 in 2023. He warned that many POS operators may be forced to increase their commissions so as to push the profit margins a bit.
Some have backed moves to sue the Central Bank of Nigeria if it fails to withdraw the new cash withdrawal policy limiting over-the-counter cash withdrawals by individuals and companies per week.The CBN had, in the memo introducing the policy, said third-party cheques above N50,000 would no longer be eligible for OTC payment while extant limits of N10 million on clearing cheques still remained. The circular also directed banks to load only N200 and lower denominations into their ATMs and restricted withdrawal to N20, 000 per day from ATMs
However, Asaba based legal practitioner, Don Pedro Ayade rued the penchant for cash withdrawal limits by the CBN as unconstitutional. As a result, he advised operators to come together to sue the apex bank if its management failed to withdraw the new policy. According to him, “ It is embarrassing that the Central Bank of Nigeria has been making announcements without any regard to the Constitution and other relevant laws on the national economy. It is particularly worrisome that the Governor of the Central Bank of Nigeria has purportedly placed a limitation on cash withdrawals in Nigeria in complete defiance of section 2 of the Money Laundering Act, 2022 which provides as follows: “No person or body corporate shall, except in a transaction through a financial institution, make or accept cash payment of a sum exceeding (a)5,000,000 or its equivalent, in the case of an individual; or (b) N10,000,000 or its equivalent, in the case of a body corporate. “A person shall not conduct two or more transactions separately with one or more financial institutions or designated non-financial businesses and professions with intent to (a) avoid the duty to report a transaction which should be reported under this Act ; and (b) breach the duty to disclose information under this act by any other means.”
Ayade: “Since the Money Laundering Act 2022 (which has fixed maximum cash withdrawal to N5 million) has not been amended, the limitation of cash withdrawal always fixed by the Central Bank of Nigeria is illegal, null and void in every material. We urge the Nigerian people to ignore the illegal announcement. “However, we are compelled to call on President Tinubu to direct the management of the CBN to withdraw the illegal guideline and stop announcing more policies that are designed to sentence poor citizens to more excruciating economic hardship”. However, while speaking exclusively with one of our correspondents in Asaba, the legal luminary noted the impact of the policy on market men and women. He said, “I read in your newspaper of the number of PoS businesses that will be affected. Take a look at the effect on market women and others who sell wares. How many of them have PoS machines? How many of them will be willing to engage in bank transfers? Last week, I, despite being someone who is familiar with smartphones, made a cash transfer to someone, but the person called to tell me that he has not received the amount I sent.”
When asked what lawyers can do as defenders of the Constitution, he said, “We have not got to that stage yet. I want them to reply to the calls first. Tell them I said it is not constitutional. If they fail to withdraw the order, then we will sue, that I can assure you.” The operators may not be as docile or ignorant as the CBN may think. In a related development, PoS operators, under the aegis of the Association of Mobile Money and Bank Agents of Nigeria, has said the association is proposing a legal suit against the CBN if the regulator fails to make cash available. Speaking in an exclusive interview with one of our correspondents, the National President of the association, Victor Olojo, said the PoS agents, through the association’s lawyer, Douglas Okojie, had concluded plans to initiate a legal suit on the development. He said, “The first option is to represent AMMBAN in the legal action about to be initiated. While the second option is to apply to the court, maybe after the suit has been filed and make AMMBAN an interested party in the suit.” Olojo further appealed to the CBN to give listening ears to the pleas of mobile money and bank agents, alongside Nigerians in general.
Meanwhile, bank customers and MSMEs have said they are still awaiting the CBN to review the policy, which they had criticised last week. The President, Bank Customers Association of Nigeria, Dr. Uju Ogubunka, in an interview with our correspondent, however, said the body was not planning to sue the CBN on the policy. He said, “We, at this point in time, have not considered and do not intend to go to court to challenge the policy issued by CBN. As it were, there is an understanding that the policy may be reviewed soon; that is, after what we consider this test-run. We await follow-up actions by the policy initiators.” Also, the Chairman of the Nigerian Association of Small and Medium Enterprises, Prof Adebayo Adams, said the association has no plans to go to court over the development. He said, “We cannot go to court as we are also regulated by the government on one hand. The CBN is an institutional member of NASME, so we cannot do that.
Ayade said: “Now, whatever the concerns about the policy may be, it should not be the normal course of things for such a profoundly impactful policy programme to be designed, approved and announced without any engagement with the legislature, or any attempt to seek the perspectives of the people’s representatives. Keep in mind, these are the very same people who will have to explain and answer for these policies in communities across the country. While each arm of government has its prerogatives and guards them jealously, our country cannot afford actions that set the stage for the competing objectives of different arms of government to descend into governance dysfunction and paralysing conflict.” Indeed, the point being made here was, if the CBN had guaged public opinion before announcing the policy, it would unlikely had gone ahead with it. But all that the operators and generality of Nigerians are asking is an immediate flow of cash at banks this yuletide with the consensus that further slashing withdrawals, rather than get the economy out of the woods, would drive it further downhill.
