The new policy by the Central Bank of Nigeria (CBN), which seeks to limit the daily cash withdrawals and lodgment in the country, will bring about a drastic reduction in money laundering, terrorist financing and other economic and financial crimes in Nigeria, a report by the Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) compliance has said.
The CBN had pegged daily cash withdrawals or lodgments by any individual or corporate body at 150.000 naira (about US$ 1,000) and 1 million naira (about US$ 7,000) respectively.
The policy becomes effective from 1 June, 2012, the local THISDAY newspaper quoted the report as saying.
The report noted that the latest policy was not the first time attempt by the regulator towards a cash-less society.
It explained: “The Money Laundering Prohibition Act (MLPA) of 2004, presently before the National Assembly for possible update and amendments, took cognisance for this. The first section of the law, prohibits anybody or body corporate in Nigeria from paying or collecting cash when buying or selling any item in value exceeding 500,000 naira (about US$ 3,500) for individuals and 2 million naira (about US$ 14,000) for organisations except through a transaction involving a financial institution.
The report said: “The point, however, is that the merits of cash-less society far outweigh the present system we operate. If we want to catch up with the rest of the world, then, we have to change our ways.
“Historically, every country started as a cash economy but through conscious efforts at development, the adoption of new technology and innovative ways of doing things, some made progress while others continue to make excuses.”
It pointed out that the preponderance of card-based transactions in developed economies was one of the hallmarks of development.
It said: “We remain underdeveloped, live in a corruption-ridden and crime-infested society and cannot effect any meaningful economic development because of our uncontrolled appetite for mostly cash transactions. Now is the time to cure the illness. And the CBN directive is a bold and positive step in the right direction. No doubt about it, one of the biggest impediments to the economic, political and social transformation of Nigeria is corruption.
“So for the corrupt civil servants, who will never do anything without 30 per cent or more kickbacks, the ‘ghana-must-go’ legislators who only approve budgetary allocation after cash exchange, just note that, time is running out. Your modus operandi is finally being dismantled. Try and collect bribe or kickback through cheque payment and see if you will not go to jail.”
It also insisted that the Nigeria Police and other law enforcement agencies would also profit from a cashless society, adding that it would make it easier to convict criminals.
According to the report, the proposed policy will help the country to implement realistic monetary and fiscal policies that will reduce inflation and make life more meaningful for the generality of Nigerians