The 36 governors in Nigeria have resolved to set up a six-member committee led by the Anambra State, Governor Charles Soludo, to engage the Central Bank of Nigeria in addressing grey areas pertaining the country’s monetary management and financial system.
The governors also resolved to collaborate with the CBN and the Nigerian Financial Intelligence Unit in advancing genuine objectives within the confines of Nigeria’s laws.
This was as the NFIU insisted that it would not go back on the ban on cash withdrawal from accounts belonging to Federal Government, all its agencies, and also state and local governments
The governors arrived at the resolutions arising from its first meeting in 2023 held on Thursday, January 19, under the auspices of the Nigeria Governors’ Forum.
The NGF, in a communiqué issued on Saturday signed by Chairman, the Sokoto State Governor, Aminu Tambuwal, noted that the recent NFIU advisory and guidelines on cash transactions were outside the NFIU’s legal remit and mandate.
Recall that the CBN on December 6, 2022 directed all deposit money banks, and other financial institutions, payment service bank, primary mortgage banks and microfinance banks to limit the maximum cash withdrawal over the counter by individuals and corporate firms weekly to N100,000 and N500,000 respectively, adding that withdrawals above the lower limit would require processing fees of 5% and 10% respectively for individuals and corporate firms.
The apex bank further directed that third-party cheques above N50,000 shall not be suitable for OTC payment while extant limits of N10 million on clearing cheques stay, following the apex bank’s latest naira notes redesign.
Following pressure from Nigerians and lawmakers, the CBN reviewed upward its cash withdrawal limits, saying individuals could withdraw N500,000 cash weekly while corporate firms could withdraw up to N5 million cash across all channels comprising Automated Teller Machines and Point Of Sale terminals.
The NGF said that the CBN Governor, Mr Godwin Emefiele, briefed it on the naira redesign, its economic and security implications, including the new withdrawal policy.
The governors stressed that they are not opposed to the objectives of the naira redesign policy.
They, however, “observed that there are huge challenges that remain problematic to the Nigerian populace.”
Speaking further the governors “expressed the need for the CBN to consider the peculiarities of states especially as they pertain to financial inclusion and under-served.
The governors resolved to “work closely with the CBN leadership to ameliorate areas that require policy variation particularly the poorest households, the vulnerable in society and several other citizens of our country that are excluded.
“Collaborate with the CBN and the Nigerian Financial Intelligence Unit NFIU in advancing genuine objectives within the confines of our laws, noting that the recent NFIU.
But the NFIU maintained that its ban on cash withdrawal was within the confines of the law concerning the guidelines on cash withdrawals from all government accounts.
The Director, NFIU, Modibbo Tukur, made this known on Saturday in response to a statement made by the Nigerian Governors Forum regarding the ban.
The governors’ forum after a meeting on Friday agreed to set up a six-man panel headed by Anambra State Governor, Charles Soludo, to interface with the NFIU and the Central Bank of Nigeria.
Responding to the NGF, Tukur said, “First of all, we are ready to partner with the six-man committee that they have set up. We will enlighten them.
“Secondly, we acted within our functions and the law. We issued the guidelines to control the barrage of investigations that we saw coming. Our guidelines were meant to help the governors, not to fight them or any public servant.”
Tukur, who spoke in a statement signed by the agency’s Chief Media Analyst, Ahmed Dikko, said, “We reached a stage that if we allow the present scenario to continue, all public institutions will drift into structured cash withdrawals of certain amounts of money which by law, standards and best practices must be investigated continuously which is neither desirable nor reasonable.
“We feel communities must move on by accommodating changes and adjusting to new developments.”
He noted that the NFIU is a law-abiding agency that works in tandem with relevant laws, adding that the LGAs lost out in court after they sued the NFIU concerning the initial LGA withdrawal guidelines.
He added, “But more importantly we need to understand that in recent past, the United States FIU and United Kingdom FIU penalised Nigerian banks with fines of millions of US dollars due to non-compliance.
“Internally, non-compliance with sections cited in the recent guidelines comes with heavy penalties on financial institutions. We did, on gentlemanly pretext, avoid until this moment putting a fine to financial institutions, expecting gradual learning and adjustments. But to eternally guarantee this kind gesture is to automatically keep abusing our laws.
“We want every stakeholder to appreciate that we cooperated for too far and long. We held deep breath while defending these deficiencies internationally, just to continue to remain in the international pay points and competing with others.
“Finally, we also clearly stated in the preceding advisory, that the entire financial system suffered excess liquidity and liquidity ratio infringements which put hedging pressure of demand for foreign currency and gradually destroying the value of the naira and above all, creating wide room for money laundering and terrorism affecting significantly the rural populace on top of general inflation in the open market place.
“We are in support of working together to stop these challenges and in most progressive manner.”