Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 49)

The Central Bank of Nigeria (CBN) announced a new policy on cash withdrawals on 6th December 2022.2 According to the policy, the maximum weekly withdrawal over the counter is set at N100,000 for individuals and N500,000 for organizations. Any withdrawal above these limits shall attract processing charges of 5 percent and 10 percent, respectively. In addition, withdrawals using Automated Teller Machines (ATM) and Point of Sale (PoS) terminals are set at N20,000 daily. The policy is scheduled to take effect from 9th January 2023. The policy aims to achieve several objectives, including fostering financial inclusion through electronic payments, increasing government revenue generation by making individuals and businesses visible to tax authorities, and improving the tracking of illicit transactions like ransom paid to kidnappers. Due to the country’s low internet penetration, the policy will likely disrupt economic activities, especially in rural areas where digital banking products are still in the infant stage, and transactions are mainly done through cash. For the policy to achieve its intended purpose, universal internet penetration is crucial. Also, the government might need to partner with banks and other financial institutions to expand the coverage of their digital financial products.

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