Cashless Policy Will Negatively Affect MSMEs, Employment Generation, MAN Warns

 

The Manufacturers Association of Nigeria (MAN) has expressed concerns over the planned implementation of the cashless policy introduced by the Central Bank of Nigeria (CBN).

The association stated that the new policy expected to kick off in 2020, will affect micro, small, and medium enterprises who are clearly the engine room for growth of the economy and employment generation.

The apex bank, in a circular, directed Deposit Money Banks (DMBs) to charge on deposits, in addition to already existing charges on withdrawals, 3 percent processing fees for individual accounts, withdrawals in excess of N500,000.00 and 5 percent for Corporate accounts withdrawal in excess of N3 million.

It also introduced processing fees for cash lodgments of 2 percent above N500,000.00 for individual accounts and 3 percent for lodgment above N3 million for Corporate accounts.

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In a signed statement by the Director-General of MAN, Segun Ajayi-Kadir, other options should be adopted to the approach to the policy.

“Even though one may agree with the CBN Governor that it is in the public interest to promote an efficient payment system via the cashless policy, there is need to examine the route you choose to achieve that objective, and I think this is the crux of the matter and appears to be a recurring decimal in the administration of our monetary policy interventions.”

He stressed that the policy was not presented to stakeholders for proper consultation, faulting the apex bank of insisting that the adoption is the only way to achieve the much-desired cashless economy.

Mr. Ajayi-Kadir advised that the CBN should adopt other viable options to achieve the much needed cashless economy.

“Apart from the fact that the policy at inception, was put in place without consultations, sensitization, explanation or rationale for its introduction; the policy was presented as the ONLY way to achieve the much-desired cashless or less-cash economy.

“The explanation given later was more of empathizing with the banking public for the “inevitable hardship” the latest cashless policy would impose on them. It would also appear that the applicable percentages did not take cognizance of the existing and long-standing charges on withdrawals.

“There is clearly more than one road to the market. In this instance, the CBN has at least two options to achieve the latest progression towards the desired cashless economy; to penalize non-compliance or to incentivize compliance. It would appear that the CBN has chosen the former. What I mean is that rather than introduce gains for those who embrace cashless transactions, it has elected to punish those who have not, including those operating in genuinely large cash-driven economic activities.”

He urged the leadership of the CBN to think through other available options to achieve its cashless policy.

“There is also a huge concern over the inadequacy of the needed cashless economy infrastructure, which the Money Deposit Banks are not doing enough to upscale or do so at a disproportionate additional cost to the users.

“MAN, therefore, urges the leadership of the CBN to think through other available options to achieve its cashless policy scheduled to be fully implemented throughout the country from March 31, 2020, while paying close attention to the use of the carrot rather than the stick approach,” he stated.

Economy: Nigerian Manufacturers Demand Review Of Govt. Policies

Economy: Nigerian Manufacturers Demand Review Of Govt. PolicesThe President of the Manufacturers Association of Nigeria, Mr Frank Udemba, has expressed concerns about some government policies which he says may hinder the development of the economy.

He said this at the Presidential Villa where government officials, manufacturers and members of the private sector met to discuss issues on how best to make the economy work in the interest of ordinary Nigerians.

Speaking the mind of most businessmen and women in the hall, Mr Udemba listed the Central Bank’s policy on foreign exchange, lack of access to long term funding, multiple levies by government agencies and lack of infrastructure as some of the areas the federal government needs to revisit in its efforts to get the nation out of economic recession.

He, however, commended the government for its giant strides in ensuring adequate security across the country.

The Minister of Budget and National Planning, Udo Udoma, and the Minister of Finance, Kemi Adeosun also provided the perspectives from their ministries, providing explanations on the concerns raised.

Vice President Yemi Osinbajo was also present at the meeting and he explained why the meeting was necessary.

He highlighted the need to get the private sector fully involved in the effort to revive Nigeria’s economy as manufacturing remains a major area the country must develop.

It was the second time the Vice President would be holding the quarterly business forum.