The CBN Monetary Plan: Deepening Distrust, Provoking Disaffection, By Jibrin Ibrahim
The CBN Monetary Plan: Deepening Distrust, Provoking Disaffection, By Jibrin Ibrahim
Ba central nk of Nigeria (CBN)
The CBN has ruled that you cannot withdraw more than N20,000 of your own money from your own bank account in one day . In a country where the majority of Nigerians do not have bank accounts or smartphones, they want us all to engage in cashless transactions using bank cards and apps. They want the transition to be immediate and seamless. They know it is impossible but the decision is made, the majority of Nigerians must suffer. We all know this is bad for us as ordinary Nigerians. I wonder if it's good for the banks and the economy?
We Nigerians in the banking system all KNOW that we have an abusive relationship with our banks. They keep our money, lend it, trade with it for profit and pay us paltry interest and steal our money with new charges they invent every day. We do a point-of-sale transaction that doesn't go through and it takes two months of struggling to get our money back. Electronic transactions are hell on earth because of the saying “no network, try later”. Knowing this, we all keep plenty of cash, if we have it, so that we can do our transactions when needed. Now we are told that we cannot collect more than 20,000 naira a day, but banks can receive billions of naira in a day.
The way forward is clear, banks will take your money and refuse to give it to you when you need it. Bank customers will do everything possible to ensure that as little of their money as possible goes to the bank. It should not be forgotten that mattresses were invented so that people could hide their banknotes in them. It's called protecting your interests, and possibly the interests of the thief. There was a time when the relationship between money, banks and customers was based on trust. When we were young, the fiduciary authority of the state was written on every note with – a promise to pay on demand the sum of… We had the right to go to the bank and get all our money back. Now we don't, so why should we trust the state, why should we trust the bank that can collect our money and not return it on demand.
Imagine you have a sick child and the hospital that can't make online purchases asks for cash, which your bank tells you you can't have because you've collected a part of your own money yesterday. Imagine what will happen in rural markets where most people do not have bank accounts and have to resort to barter trade. Imagine the plight of the masses in the many local government areas where there is not a single bank.
I fully understand the high ideals that underpin the new policy. I was one of the millions of Nigerians who were disgusted when Godfather Bola Tinubu allegedly brought vans full of banknotes to his home for election expenses and I appreciate the gesture of some patriotic Nigerians who are seeking an end to such behavior by removing money from the market. system. I do, however, know enough about the sociology of this country to be aware that no matter how little money is in circulation, the great and powerful and not the poor market woman will get what is available. The farmer who tries to sell two rams to prepare for his daughter's wedding is the one who will suffer from not being able to get money.
I also understand the argument about the barrel and the insecurity. Kidnappers are effectively demanding and receiving billions in cash as ransom payments and the brilliant idea is that if there is no money to pay the ransom they would lose interest in the kidnappings. It's completely ridiculous. The kidnappers know the foreign currencies with which they buy their weapons. If there is no naira, they will demand CFA francs dollars and people will transport their movables across borders, sell, get foreign currency and come back to pay ransom for their relatives. Transaction costs would simply increase and suffering would increase.
The CBN has ruled that you cannot withdraw more than N20,000 of your own money from your own bank account in one day . In a country where the majority of Nigerians do not have bank accounts or smartphones, they want us all to engage in cashless transactions using bank cards and apps. They want the transition to be immediate and seamless. They know it is impossible but the decision is made, the majority of Nigerians must suffer. We all know this is bad for us as ordinary Nigerians. I wonder if it's good for the banks and the economy?
We Nigerians in the banking system all KNOW that we have an abusive relationship with our banks. They keep our money, lend it, trade with it for profit and pay us paltry interest and steal our money with new charges they invent every day. We do a point-of-sale transaction that doesn't go through and it takes two months of struggling to get our money back. Electronic transactions are hell on earth because of the saying “no network, try later”. Knowing this, we all keep plenty of cash, if we have it, so that we can do our transactions when needed. Now we are told that we cannot collect more than 20,000 naira a day, but banks can receive billions of naira in a day.
The way forward is clear, banks will take your money and refuse to give it to you when you need it. Bank customers will do everything possible to ensure that as little of their money as possible goes to the bank. It should not be forgotten that mattresses were invented so that people could hide their banknotes in them. It's called protecting your interests, and possibly the interests of the thief. There was a time when the relationship between money, banks and customers was based on trust. When we were young, the fiduciary authority of the state was written on every note with – a promise to pay on demand the sum of… We had the right to go to the bank and get all our money back. Now we don't, so why should we trust the state, why should we trust the bank that can collect our money and not return it on demand.
Imagine you have a sick child and the hospital that can't make online purchases asks for cash, which your bank tells you you can't have because you've collected a part of your own money yesterday. Imagine what will happen in rural markets where most people do not have bank accounts and have to resort to barter trade. Imagine the plight of the masses in the many local government areas where there is not a single bank.
I fully understand the high ideals that underpin the new policy. I was one of the millions of Nigerians who were disgusted when Godfather Bola Tinubu allegedly brought vans full of banknotes to his home for election expenses and I appreciate the gesture of some patriotic Nigerians who are seeking an end to such behavior by removing money from the market. system. I do, however, know enough about the sociology of this country to be aware that no matter how little money is in circulation, the great and powerful and not the poor market woman will get what is available. The farmer who tries to sell two rams to prepare for his daughter's wedding is the one who will suffer from not being able to get money.
I also understand the argument about the barrel and the insecurity. Kidnappers are effectively demanding and receiving billions in cash as ransom payments and the brilliant idea is that if there is no money to pay the ransom they would lose interest in the kidnappings. It's completely ridiculous. The kidnappers know the foreign currencies with which they buy their weapons. If there is no naira, they will demand CFA francs dollars and people will transport their movables across borders, sell, get foreign currency and come back to pay ransom for their relatives. Transaction costs would simply increase and suffering would increase.
Ba central nk of Nigeria (CBN)
