Nigeria: Cashless Policy - CBN Insists On July 1 Extension to Five States

The Deputy Governor, Operations of the Central Bank of Nigeria (CBN), Mr. Tunde Lemo has said that the planned extension of the cashless policy to five states as well as the Federal Capital Territory (FCT) from July 1 still holds.

The states include Rivers, Kano, Anambra, Ogun and Abia as well as the FCT.

According to Lemo, the states and the FCT were chosen because of the large volume of cash transactions in some of their major cities.

He explained that in order to achieve the target, the apex bank and lenders had already drawn a roadmap, which is being followed meticulously.

"We are ready to roll out to the six other states and there would be no change in date. We are not shifting the goal post. We have a roadmap, which is being followed and we are fully prepared," he said.

The cashless policy, whose implementation began in Lagos in January, last year, is aimed at reducing the dominance of cash in the system. The policy specifies penal charges for individuals and corporate organisations that want to withdraw or lodge cash above prescribed limits.

Under the policy, the CBN pegged the daily cumulative cash withdrawal or deposit limit for individual accounts at N500,000 per day and N3 million per day for corporate accounts.

Lemo had explained: "When we talk about nationwide roll-out, we are also being careful to ensure that we make use of resources in a smart way. Cash doesn't flow the same volume in every state of the federation. What we would do in July is to look at those other market clusters where large amount of volume is transacted and add them to Lagos.

"It is cheaper that way because the resources you need to cover the entire 923 square kilometres in Nigeria are huge. But you can achieve almost the same thing by looking at the pattern of cash distribution and you can cover about 90 per cent of that by adding about five more locations to Lagos. That is: Abuja, Kano, Aba, Port Harcourt and Onitsha.

"We would see how far that goes and once we perfect that, we then begin to look at contiguous market centres around these locations and we would gradually cover the entire country."

Source: Daily Trust