- Experts Fault CBN’s Cashless Policy
Economic and financial experts have started telling the Central Bank of Nigeria (CBN) to ease charges being levied on consumers following the imposition of fees on cash deposits and withdrawals.
Prior to the implementation of processing fees on withdrawals and deposits on Wednesday, the Federal Executive Council had approved a 44 percent increase in Value Added Tax (VAT) to 7.2 percent.
A month earlier, the Federal Inland Revenue Service (FIRS) had announced 5 percent VAT on all online transactions starting from 2020.
The number of charges being levied on the average consumer in an economy barely growing is alarming and counterproductive to the CBN economic growth and financial inclusion plans.
The new circular mandated Deposit Money Banks to charge corporate account owners 5 percent processing fee on withdrawals more than N3 million and 3 percent on deposits of same. Meaning, each time network is down, Nigerian businesses would have to pay N300,000 to deposit N10 million or N500,000 to withdraw the same amount.
For individuals, they will have to pay 2 percent processing fee on deposits more than N500,000 and 3 percent withdrawal fee on the same amount.
Despite the central bank explaining that the directive is to develop Nigeria’s payment system in line with its vision 2020 goal of being among top 20 economies by next year, experts say to grow the Nigerian economy, the apex bank needs consumer spending and new investments.
But the new charges and the ones in the pipeline being pushed for approval would hurt consumer buying power, erode savings, weigh on new job creation and impede profitability of businesses.
Still, majority thinks the cashless policy is a good move as it would help CBN manage and regulate cash better. However, the economy is just recovering with numerous headwinds that has crippled both businesses and individuals in terms of earnings and growth.
Mr. Godwin Eohoi, the Registrar, Chartered Institute of Finance and Control of Nigeria, said: “The move by the CBN to promote cashless policy is commendable because it has some benefits such as reducing the amount spent by the apex bank in cash management.
“However, the Nigerian economy is still fragile and at a time when the CBN is promoting financial inclusion, it would not be fair to impose additional charges on bank customers that are already overburdened with different types of charges from banks.
“The cash deposit and withdrawal fee announced by the CBN is too high. They should reduce it to 0.5 per cent for transactions involving individuals and 1.5 per cent for corporate companies.”
Almost 70 percent of bankable adults are still unbanked, according to the CBN. Imposing additional fees on existing customers while campaigning for broad financial inclusion to grow the sector is counterproductive.
Mr. Timothy Olawale, the Director-General, Nigeria Employers Consultative Association (NECA), explained that the new charges will lead to unnecessary withdrawal burden as businesses and individuals will start working within stipulated limits to avoid charges.
He said, “Though the overall aim of reducing cash transactions is good, the policy will, however, increase the cost of doing business and force organisations and individuals to start multiple deposits and withdrawals in order to beat the charges.”
The Director-General, LCCI, Mr Muda Yusuf, who obviously thinks the cashless policy is good but the implementation needs adjustment, said the notice given by the CBN was just too short and could disrupt service in the banking sector.
He said, “The latest circular by the CBN should have given a much longer notice to economic players. The notice given for the effective date is extremely short. The circular was dated 17th of September while the effective date was 18th of September.
“This is just a notice of one day. This would have short-term disruptive effects. We implore the CBN to give at least two months to allow for players in the economy to adequately prepare themselves. This is particularly so for investors who are major players in the retail segment of the economy.”
A logistics expert and the CEO of Hermonfield, Mr Tunji Olaosun, said both the CBN and FIRS directives are contradictory.
According to him, while the CBN is pushing for a cashless policy, the FIRS is telling people it will impose 5 percent VAT on all online transactions.
He said, “It appears they don’t talk to themselves because of the conflicting signals coming from them.
“From the CBN’s instruction, it shows that the CBN wants to discourage cash transactions and encourage cashless transactions. But at the same time, the FIRS is saying it will impose tax on transactions done online.
“So in essence, if we carry cash, CBN penalises us; if we do cashless, FIRS taxes us. So, which one do they want us to do? Both are agencies of the Federal Government which means the ministry they are confusing Nigerians.”
France, Nigeria to Build New Partnership
France is currently aiming at building a new partnership with Nigeria, with the dispatching of its Minister in charge of Foreign Trade and Attractiveness, Franck Riester, to Nigeria.
Riester, who was expected at the time of filing this report on Monday, is scheduled to visit Nigeria from 12-14 April, 2021.
A statement from the French Embassy in Nigeria said: “Franck Riester is visiting Nigeria from 12 to 14 April, a visit that follows up on the priorities set by French President Emmanuel Macron during his official visit to Nigeria in July 2018 and his desire to build a new partnership between Africa and France.
“As the largest economy in Africa and the economic engine of West Africa, Nigeria is indeed a major partner for France, the first in sub-Saharan Africa with bilateral trade amounting to a total of 4.5 billion USD in 2019 (2.3 billion USD in 2020, due to the Covid-19 pandemic).”
It disclosed that the minister will have several official meetings in Abuja and Lagos, in order to underline the importance of the bilateral economic relationship and to prepare the summit on the financing of African economies in Paris on 18 May.
It revealed that the objective of the mission is also to further strengthen the links between the French and Nigerian private sectors, and “in this regard, the minister will have in-depth discussions with the main Nigerian economic actors to strengthen bilateral cooperation and investments, both in Nigeria and in France, particularly in the logistics sector”.
It said while in the country, the minister would meet with young Nigerian entrepreneurs in the cultural and creative industries sector, to discuss the major role of their country in African creativity and the development of the African entrepreneurial ecosystem, with the support of France.
It further said: “The minister will also open the ‘Choose Africa’ conference, a €3.5 billion initiative by President Emmanuel Macron dedicated to supporting the development of start-ups and SMEs in Africa to enable the continent to benefit fully from the opportunities of the digital revolution.”
COVID-19: USAID to Provide $3m Grant, Technical Assistance to Combat Food Insecurity in Nigeria
The United States Agency for International Development (USAID) is providing financial grant and technical assistance worth $3 million to combat food insecurity in Nigeria compounded by COVID-19 pandemic.
A statement by the agency on Monday said: “On April 12, 2021, the U.S. Agency for International Development (USAID) in Nigeria launched a COVID-19 Food Security Challenge that will provide $3 million in grant funding and technical assistance to youth-led and mid-stage companies working in food value chains in Nigeria.”
The statement lamented that Nigeria is experiencing food insecurity compounded by the COVID-19 global pandemic and its effects on the food value chain in the country.
It stated that the pandemic has disrupted the already fragile agricultural value chains, especially smallholder farmers’ ability to produce, process and distribute food, which has disrupted agricultural productivity and markets, and negatively impacted livelihoods, especially among vulnerable households, women and youth.
The USAID Mission Director, Anne Patterson, said: “We are launching the COVID-19 Food Security Challenge to help innovative Nigerians alleviate food insecurity.
“This assistance encourages private sector-led solutions to boost food production, processing and create market linkage along the agriculture value chain in a sustainable way across Nigeria.”
The statement revealed that in launching the challenge, USAID seeks commercially viable youth-led and mid-stage companies already working in food production, processing, and distribution, noting that successful applicants will present ideas that demonstrably help farmers and other stakeholders in the agricultural value chain increase, agricultural productivity and food security within the next six months.
According to the statement, the challenge will award 15 to 25 youth-led companies up to $75,000 each and award 10 to 15 mid-stage companies up to $150,000 each.
Winners will receive funding and technical assistance to rapidly expand their activities to mitigate the effect of COVID-19 on Nigeria’s food value chain and improve the resilience of vulnerable households to the negative impacts of the pandemic.
FG Plans to Deliver Solar Energy to 25M Nigerians
The Nigerian federal government has commenced its plan to deliver electricity through solar energy to Nigerians whose communities are off the national power grid.
Vice President Yemi Osinbajo, who spoke during an event to mark the programme in Jangefe, Roni Local Government Area of Jigawa State, restated the determination of the President Muhammadu Buhari administration to give more Nigerians access to cheap and environmentally friendly renewable power.
Osinbajo said the Solar Power Naija programme would continue across the six geopolitical zones in six states, namely, Edo, Lagos, Adamawa, Anambra, Kebbi and Plateau, in the first phase, and then move to the entire 36 states and the nation’s capital, thus, covering 25 million Nigerians at completion.
Jangefe community got 1,000 solar home system connections for its about 5,000 population, as part of a 100,000 scheme, with a local solar power company implementing aspects of the scheme.
According to Osinbajo, the president had emphasised that Nigeria could no longer rely solely on the grid if government is to electrify the whole country, which meant that an effective strategy had to be developed for decentralising power supply.
The Solar Power Naija programme, which is designed by the Rural Electrification Agency (REA), is an ambitious initiative that aims to create five million connections through a N140 billion financing programme that will support private developers to provide power for five million households, which means providing electricity for up to 25 million Nigerians.
The vice president disclosed that the programme was a Public Private Partnership (PPP) arrangement supported by concessionary lending via the Central Bank of Nigeria (CBN) and commercial banks. He emphasised that structures had been put in place to make the cost of the connections affordable for the target communities.
In addition to the concessionary lending rates, Osinbajo explained that the government had provided subsidies and rebates for private developers to the tune of over $200 million under the REA and World Bank Nigeria electrification programme.
African Development Bank’s First Virtual Business Opportunities Seminar of 2021, Draws 450 Global Partners and Suppliers
Nirsal: CBN Reopens Application for N50 Billion COVID-19 Loan for Households and Small Businesses
France, Nigeria to Build New Partnership
Finance2 weeks ago
List of Microfinance Banks’ USSD Codes In Nigeria
Government4 weeks ago
FEC Approves $1.5 Billion For Repair of Port Harcourt Refinery
Cryptocurrency4 weeks ago
Zugacoin that Plunges Over 99 Percent in 6 Days Partners Innoson, Buy Innoson Products With Zugacoin
News4 weeks ago
Focus on bank MDs, Others, Workers Reply EFCC Over Asset Declaration
Government3 weeks ago
US Intelligence Says ISIS and Al-Qaeda Are Planning to Attack Southern Nigeria
Government4 weeks ago
Customers TO Pay N6.98 Per USSD Transaction – CBN, NCC
News4 weeks ago
EFCC Directs Bankers to Declare Assets by June 1
Banking Sector3 weeks ago
GTBank Records N201.4 Billion Profit After Tax in 2020