Latest data from the Central Bank of Nigeria (CBN) shows that currency in circulation contracted by just N205.54bn between December 2016 and March 31, 2017, representing a 9.43% decline.
The biggest of the decline was in January when the figure fell from N2.179tr in December 2016, by N184.597bn or 8.47% to N1.994tr; before dropping by a further miserly N15.691bn or 0.78% to N1.978tr the following month.
Without a festivity that would normally spike a rise in currency-in-circulation, the figure increased slightly by N4.747bn or 0.23% to N1.983tr at the end of March.
The CBN hopes to reduce the figure drastically with the faithful implementation of the cashless policy initiative of the Bankers’ Committee.
On April 3, 2017, punitive charges on cash deposits and withdrawals above stated thresholds began in Lagos, the nation’s economic and commercial nerve centre and other states hosting commercial centres such as Ogun (home to many industrial hubs, besides its closeness to Lagos), Anambra (home to Nnewi and Onitsha commercial hubs), Abia (Aba), Abuja, the Federal Capital Territory and Kano (Northern Nigeria’s commercial centre).
According to the implementation timetable, the policy will from May 1, take effect in the 10 states of Bauchi, Bayelsa, Delta, Enugu, Gombe, Imo, Kaduna, Ondo, Osun and Plateau; followed by Edo, Katsina, Jigawa, Niger, Oyo, Adamawa, Akwa-Ibom, Ebonyi, Taraba and Nasarawa on August 1.
The states of Borno, Benue, Ekiti, Cross River, Kebbi, Kogi, Kwara, Yobe, Sokoto and Zamfara are expected to come on stream from October 1.
Income generated from the processing fees charged above the tolerable cash transaction limits is to be shared in the ratio of 60:40 between the CBN and the banks.
Many people are believed to keep cash in their homes and business premises, or vaults, rather than take such to banks, following which a lot of traders and people lament so much whenever there is a fire outbreak. There are also those who keep vaults, like the case of Mr. Andrew Yakubu, the former Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), in whose property, vaults bearing $9.8m were discovered by the Economic and Financial Crimes Commission (EFCC), some weeks ago in Abuja. The policy is therefore expected to discourage the use of cash and migrate more people to alternative modes of transactions like the use of Point-of-Sale (PoS) terminals, bank transfers, cheques and mobile banking.
According to a CBN circular signed by Dipo Fatokun, its director of Banking & Payment System Department titled: “Nationwide implementation of the cashless policy,” date February 23, 2017, in line with the February 8, 2017 decision of the Bankers’ Committee, corporate cash withdrawals and deposit of less than N3m would be free of charge. Deposits above N40m will attract 5% charge and withdrawal, 10% penalty; deposit of between 10m and N40m will now cost 3% and withdrawal, 7.5%. Also deposit of any sum between N3m and 10m will attract 2% charge; and 5% for withdrawal.
Also, while individuals withdrawals of more than N5m in cash will attract a penalty of 7.5%, deposit of equal amount will now attract 3% in handling charge; between N1m and N5m will attract 2% to deposit and 3% to withdraw; and 1.5% for cash deposit of between N500,000 and N1m in individual accounts, just as withdrawal of like sum will attract 2%. Cash withdrawal and deposit of less than N500,000 will continue to be at no cost.
The Bankers’ Committee meeting, the 493rd, also “decided that the (cashless) policy be extended to the 30 remaining states of the Federation.”
The circular further listed lodgement accounts of revenue generating federal, states and local government agencies as those exempted from the above processing fees; just like accounts of foreign Embassies, Diplomatic Missions, Multilateral and Aid Donor Agencies in Nigeria.
Consequently, banks in the various state locations were enjoined to begin enlightenment campaigns in their various branches, including training their staff on the policy implementation to enable them provide answers to enquiries and handle customer related issues and complaints, in addition to providing advice.
Perhaps due to the non-implementation of the cashless policy faithfully, the quantum of cash outside bank vault has continued to rise, according data by the CBN.