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Editorial

CBN’s New Cash Withdrawal Limits

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In an obvious move to reposition Nigeria’s national currency, the Naira, for effective performance and control of the amount of cash in circulation, the Central Bank of Nigeria (CBN) has introduced new cash withdrawal limits for banks and other financial institutions. The new policy comes on the heels of its recent currency redesign project, in which it expresses concerns about immense amounts of cash outside the banking system.
The directive on the new cash withdrawal limits was contained in the CBN letter dated December 6, 2022, which was addressed to all Deposit Money Banks, and other financial institutions like Payment Service Banks (PSBs), Primary Mortgage Banks (PMBs) and Microfinance Banks (MFBs). The letter was formally endorsed by Mr Haruna Mustafa, Director, Banking Supervision Department, CBN.
Under the new regulations, the Central Bank capped weekly over-the-counter (OTC) cash withdrawals by individuals and business organisations to N100,000 and N500,000, respectively. However, the apex bank states that withdrawals above the threshold will be charged a processing fee of 5% for individuals and 10% for corporate bodies. Also, third-party checks over N50,000 are not eligible for OTC payments, while the existing limit for cleared checks remains at N10 million.
The new cash withdrawal regime further limits maximum cash withdrawals via Automated Teller Machines (ATMs) to N100,000 per week and N20,000 per day. According to the CBN, ATMs can only load denominations of N200 and below, while the maximum amount that can be withdrawn via point-of-sale (POS) terminals is limited to N20,000 per day.
However, the Central Bank declares that in cases of last resort, not more than once a month, if cash withdrawals exceeding the prescribed limit are required for legitimate purposes, the withdrawal amount of individuals and corporate organisations shall not exceed N5 million and N10 million respectively, and shall comply with the referenced processing fee. This would be in addition to enhanced due diligence and further information requirements.
Furthermore, the CBN says that monthly re-runs of cash withdrawal transactions exceeding the prescribed limit should be referred to the banking supervisory authority. While needing to comply with existing Anti-Money Laundering/Combating the Financing of Terrorism regulations related to Know Your Customer (KYC), ongoing customer due diligence and suspicious transaction reporting, among others, are required in all circumstances.
Moreover, the Central Bank encourages bank customers to use alternative channels including Internet Banking, Mobile Banking Apps, USSD, Card/POS, eNaira, etc., for banking transactions. The CBN also warned banks and other financial institutions that aiding and abetting circumvention of the new policy would attract severe sanctions.
Current moves by the CBN point to an effort to curb vote-buying ahead of the 2023 general elections, check and diminish the amount of cash in circulation. It is also aimed at containing the ease by which the Nigerian currency has been counterfeited by criminal gangs. Most significantly, these policies would help the apex bank regain control of excess cash floating in the economy, thereby upscaling the value of the Naira and curbing inflation.
The CBN governor, Godwin Emefiele, had revealed in last October that out of N3.23 trillion Naira in circulation, N2.73 trillion was lying outside Nigeria’s banking system. This figure, which represents about 85%, is what the CBN is trying to mop up back into the system to be able to control the money supply. We commend the bank for the initiative, which is quite positive. Many Nigerians will benefit from the new policy.
The government and banks would equally gain from the practice in the sense that it would reduce the cost of holding large amounts of cash, and capture more e-transactions and e-revenue for the institutions. Crimes like armed robbery, burglary, and kidnapping for ransom will drop because it will be difficult to raise the huge amount of money the criminals usually demand from the banking system.
Drastically reducing cash in circulation will likewise compel more transactions to be conducted electronically. There would be less currency outside the banking system, which will make monetary policy interventions more effective. This would reduce the size of the black economy and provide more intelligence for the tax authorities to expand the tax net to economic activities which were previously under the radar. Additionally, the volume of Naira to be printed every year will reduce significantly.
Apparently, the CBN is trying to drive a cashless economy by placing stiffer restrictions on cash withdrawals. However, a more effective strategy could have been to first enhance the cashless economy infrastructure to remove or significantly reduce the challenges and irritations that people experience when transacting using electronic payments. Many Nigerians regularly experience unsuccessful electronic payment transactions either due to bad network, switch failure or even lack of electricity to charge the devices.
A different strategy could have been employed to make a cashless economy attractive as was the case with Mesa in East Africa, so people voluntarily embrace it rather than the stick approach, which will, unfortunately, punish many people for circumstances that are beyond their control, especially the large unbanked population in rural areas. If not properly handled, the situation could result in a lull in economic activities, which may slow down GDP growth in the short to medium term.
Though there will undoubtedly be implementation challenges, the policy is a step in the right direction for sanitising the economy. The excess liquidity floating around in the economy needs to be mopped to minimise price escalation. However, the slow adoption of e-banking, the rise in cybercrime coupled with an election year, and other macroeconomic factors could dramatically slow the benefits of the policy.

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Editorial

Governor’s Pension Law Repeal, Otti’s Example 

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Abia State’s decision to repeal the governor’s pension law is a momentous move towards cutting down on
the expenses of governance and focusing on the welfare of pensioners in the State, who were last paid in 2014. Governor Alex Otti’s bold action in overturning this law demonstrates a dedication to financial prudence and transparency. This resolve will help in reducing the financial burden on the State.
Pension for governors and their deputies has been a contentious topic in Nigeria, with concerns raised about the ethics and morality of providing lifetime benefits to public officials who may only serve a limited term in office. Abia State has taken a bold step by repealing this law, setting a positive example for other States to follow. This move has sparked a much-needed conversation about the need for accountability and responsible governance in the country.
Governor Otti’s argument for repealing the governor’s pension law to alleviate the financial burden on the State and address the issue of unpaid pensions for Abia’s retirees is compelling. By prioritising the needs of the people over political considerations, Governor Otti is demonstrating strong leadership and a commitment to serving the best interests of the citizens.
The Abia State Governors and Deputy Governors Pension (Repeal) Law of 2024 has been widely reproached for its excessive provisions for former office holders. Not only does the law guarantee former governors and former deputy governors 100 per cent of the operative salary of their successors, but it also includes the provision of three police officers and two Department of State Services officers for life. Additionally, the State is responsible for paying for their domestic staff and building mansions for them in both their home State and in Abuja.
Proponents of these benefits assert that they are necessary to ensure that former governors are appropriately provided for after their tenure in office. They maintain that these benefits are in line with the sacrifices and responsibilities that come with holding a public office. Furthermore, supporters of the entitlements contend that these provisions are intended to attract qualified individuals to compete for gubernatorial positions, with the assurance that their welfare will be looked after once they leave office.
Despite efforts to eliminate these schemes in some States, about 18 States still retain pension for their former leaders, which many Nigerians view as a form of political hedonism. Zamfara set a precedent in 2019 by eliminating its pension law, signaling a shift away from the traditional practice of providing lucrative benefits to former governors and their deputies. Many other States continue to operate this practice, allowing former leaders to receive substantial pension and other perks even after leaving office.
In 2020, both Lagos and Kwara States announced their intentions to scrap their pension laws, acknowledging the increasing public outcry over the issue. Kwara went a step further by officially abrogating the law in January, 2021, demonstrating a commitment to reforming the system and promoting accountability. Meanwhile, Lagos took a more gradual approach by reducing the benefits for former leaders by 50 per cent in August , 2021. This move was perceived as a compromise between completely abolishing the scheme and maintaining the status quo.
According to the World Poverty Clock and the National Bureau of Statistics (NBS), Nigeria has been listed as the poverty capital of the world, with millions of people living in extreme poverty. The fact that States would continue to record more ex-office holders after every tenure only adds to the financial strain of these pension schemes. With the number of former office holders increasing each year, the costs associated with their pension become unsustainable for many States.
The funds that could be allocated towards alleviating poverty and improving infrastructure are instead being spent on providing lavish retirement benefits for a select few. The current pension schemes for ex-governors in Nigeria are not sustainable in the long term, especially in the face of the present economic realities. Reforms are needed to ensure that public funds are used more efficiently and effectively, and that the needs of the most vulnerable in society are given preference over the comfort of former government officials.
Pension for former governors often result in the enrichment of the wealthy elite at the expense of the struggling masses. These politicians typically only served in office for a maximum of eight years, yet, they are able to secure generous pension that allow them to maintain a life of luxury. Some even go on to hold positions as Ministers or Senators, further perpetuating their unjustified wealth.
Curiously, the 10th National Assembly is home to more than 12 former governors who continue to benefit from these lavish retirement benefits. In stark contrast, many public workers dedicate 35 years of their lives to serving the public and the government, only to receive meagre pension or sometimes none at all. Tragically, some pensioners pass away before ever receiving the benefits they are owed.
Other States should look to Abia State as a model for promoting democratic values and accountability. The active participation of civil society organisations, pressure groups, taxpayers, and activists is critical in upholding the principles of democracy and ensuring that the government is accountable to the people. The scandalous pension laws that have been passed in many States are not only unjust but also a detriment to the democratic process.
Nigerians should engage with their legislators and demand the immediate annulment of these obnoxious laws that serve to enrich a select few at the expense of the public. Citizens can help ensure that their voices are heard and that their rights are protected by actively participating in the legislative process and holding their representatives accountable. Abia is a constant reminder that democracy is a continuous process that requires the active involvement of all.

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Editorial

Enough Of Legislative Rascality In Rivers

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The political deadlock in Rivers State is showing no sign of abating, with the State House of Assembly voting once more to nullify Governor Siminalayi Fubara’s veto of the Rivers State Assembly Service Commission Bill. This is in addition to the one that occurred in January, when the legislators went against some of the governor’s decisions about four other bills, claiming it could cause chaos and violate certain laws.
The four bills include the Rivers State Local Government Law (Amendment) Bill; Rivers State Traditional Rulers’ Law (Amendment) Bill; Rivers State Advertisement and Use of State-owned Property Prohibition (Repeal) Bill and Rivers State House of Assembly Fund Management Bill. Unlike before, the amendment to the Assembly Service Commission Law now permits the Assembly to appoint the chairman and members of the Commission, not the governor.
But legal experts say that the amended law violates the 1999 Constitution, which prohibits the Assembly from overstepping the governor’s authority to appoint the chairman and other members of the Commission. If that position is accurate, then the Rivers State House of Assembly Service Commission (Amendment) Law, 2024, is legally void. The question is: why is Rivers State different if the President, working with the National Assembly, nominates members of the National Assembly Service Commission?
In yet another controversial move, the State Assembly has passed a bill to amend the Rivers State Public Procurement (Amendment) Law No. 1 of 2021. The bill, which was put forward at the 127th sitting, aimed to delete Section 3 of the 2021 Amendment Law to limit mobilisation fees to suppliers or contractors to not more than 20 per cent. We condemn this ill-motivated enactment, as the same Assembly had previously amended the law in 2021 to allow for 100 per cent payment of mobilisation fees to contractors.
While the House maintains that the laws are intended to bring more balance of power, we perceive it as an audacious endeavour to humiliate the governor and diminish his position. This power contest between the legislative and executive arms is unsettling and detrimental to the state. It is incomprehensible why the same Assembly members failed to challenge any bills during former Governor Nyesom Wike’s tenure, which period they also served as lawmakers.
We advise the state lawmakers to be wary of their actions and always prioritise the well-being of Rivers people by operating collaboratively with Governor Fubara. They should set aside their deep-rooted prejudices and concentrate on enacting good legislation to benefit the citizens. We insist that the governor should be allowed to administer the state freely in line with his constitutional mandate to ensure stability and progress in the state.
It is time for our renegade legislators to pay attention to their duties and not allow their paymaster to manipulate them for his narcissistic purposes. We find it disappointing to see those in power succumb to high-level corruption and disregard the people’s needs because of politics. What we need now is unity and cooperation, not the constant harassment of Fubara to create tension and division.
When individuals who are supposed to uphold the law and safeguard the people’s interests are being used as pawns in a murky political game, it is a sad state of affairs. The lawmakers need to understand that they owe it to the people of Rivers State to buck any attempts to jeopardise their integrity and independence. The trust of the people they represent is undermined by letting themselves be controlled, which also erodes their credibility.
Repealing and re-enacting laws without careful consideration by these lawgivers is reckless and unacceptable. Their actions could cause a crisis in the state, making governance more challenging. They need to understand that any problem they ignite will not only affect the general public but also themselves and their loved ones. That is why the legislators must contemplate the repercussions of the laws they revoke or make and how such statuses will impact their interests and all residents of the state.
Speaker Martins Amaewhule and his cohorts are pushing the boundaries of their rascality too far. After elections, politics in most states ends, allowing for genuine governance to take over. Unfortunately, this is not the scenario in Rivers, where political turbulence is destroying the state’s economy. If these parliamentarians truly cared about the state in which interest they have always claimed to act, they would end the ardent political imbroglio and unnecessary power struggles causing divisions and increased insecurity
Political tenseness in a state can sidetrack the attention of the government away from enforcing impressive policies to tackle challenges and promote progress. It is estimated that Rivers State has lost about N2 trillion in public sector investments over the past 12 years due to unrest in the political arena. Numerous projects valued at over N1.91 trillion have been impeded, along with other economic activities that could have profited many.
Some of the losses include the N250 billion bond approved in 2010 to build listed projects. However, a political dire straits in 2012 compelled the state to resort to bridging loans from commercial banks, as opposed to Lagos State that took bonds. The World Bank water project, that was supposed to transform Port Harcourt into a modern city, was allegedly not endorsed by the Goodluck Jonathan administration following political upheavals in the state.
To transform Port Harcourt into a fast and efficient transportation centre, the government invested over N20 billion in the monorail project. However, once Wike became the governor, he abandoned it. Former Governor Chibuike Amaechi used to set aside N100 billion each year for the Greater Port Harcourt City project, but Wike, following political disagreements with his predecessor, neglected it and instead used it as a means to reward his supporters. The unstable political climate prevented the realisation of these public sector investments, which could have greatly expanded the state’s economy.
Rivers people are indeed fed up with waking up every day to distressing news from the political space. Amaewhule and his troublesome allies must be told that enough is enough. The inept lawmakers should put aside their personal interests and those of their principal and work with Governor Fubara, who has been brandishing the olive branch to advance the state. Rivers State needs peace and development.

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Editorial

Another Look At Capital Punishment

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There are far too many prisoners in Nigeria’s correctional facilities. Thousands of them are awaiting trial inmates, while others are either serving their jail terms or have received death sentences. The approximate number of death row convicts in custodial facilities around the nation as of July 2022 was 3,145. Of the figure, 3,084 were men and 61 women, according to the Nigerian Correctional Service. This has over time put the process of decongesting the correctional facilities all but impossible.
As governors decline to sign the death warrants for the condemned, the number of the individuals on death row is growing, sparking reservations among human rights advocates and attorneys about what might happen to the prisoners. A few of them have proposed converting the death penalty to life in prison. Others contend that the death sentence ought to be abolished under the constitution if the governors are unwilling to sign the warrants. Femi Falana, SAN, maintains that keeping a prisoner on death row for a considerable amount of time is torture.
Despite repeated calls by the Federal Government for state governors to exercise their constitutional responsibility of signing death warrants of criminals condemned to death by courts of competent jurisdictions, no death row inmate has been executed in the last 10 years. Governors are delaying the wheel of justice and contributing to congestion in correctional centres by refusing to sign the death warrants. States should share in the burden of decongesting custodial facilities in the country.
Crimes that are punishable by death include homicide, kidnapping, and murder. The governors must still sign the warrants after the judges issue these orders for the execution to proceed. Over time, the governors, who are liable for confirming execution orders, have been dodging their role, which has made the already cramped jails even more cluttered. They justify their refusal to append the warrants by citing political correctness and feelings.
One of the most contentious and frequently discussed subjects in the world is the death penalty. Numerous organisations observe that it is cruel and barbarous. Its opponents frequently compare it to murder, pointing out that it has no effect on homicide rates and that the ends do not always substantiate the methods, particularly when people are wrongfully condemned.
Since Nigeria is yet to consider abolishing or suspending the death penalty, the onus is on the governors to take the correct course of action. The number of nations that have done so is expanding. According to the Death Penalty Information Centre, almost 70 per cent of nations worldwide have either outlawed or discontinued the death penalty. Kazakhstan and Papua New Guinea are among the most recent nations to ban it.
By the end of 2021, 108 countries had abolished the death penalty for all crimes under the law; 144 countries had done the same in practice; 28 countries had done so in effect by not carrying out an execution in the previous ten years; and 55 countries still applied the death penalty for common crimes. This information comes from data provided by Amnesty International.
However, proponents of capital punishment often view it as a necessary evil to protect society from individuals who commit the most heinous crimes. Despite the declarations from former Governors Seriake Dickson of Bayelsa State and Simon Lalong of Plateau State that they would not hesitate to approve the death penalty for convicted kidnappers, there is no concrete evidence of them following through on this promise. The only elected governor in recent Nigerian history known to have signed a death warrant was former Governor of Edo State, Adams Oshiomhole, which sparked criticism from various groups.
During his tenure as President of Nigeria, Goodluck Jonathan made a controversial statement urging state governors to sign death warrants for criminals condemned to death. Speaking at a Fathers’ Day Sunday service in 2013, Jonathan reminded the governors that their role as leaders involved both pleasant and unpleasant tasks. Jonathan’s call serves as a reminder of the dual responsibilities that come with leadership and the need for critical reflection on the consequences of such decisions.
Governors play a crucial role in the criminal justice system when it comes to deciding the fate of individuals on death row. They are faced with the weighty decision of either approving the death warrants of those who have exhausted their appeals process, converting their death sentence to life imprisonment, or offering them clemency. Failure to act on any of these options should result in the removal of Section 33, which permits the death penalty, from the constitution.
State governors must set aside personal emotions and make decisions based on the principles of justice, fairness, and compassion. Approving death warrants should only be done after careful consideration of all facts and evidence in a case, ensuring that justice is served. However, if governors find that there are mitigating circumstances or doubts about guilt, they have the option of converting the death sentence to life imprisonment or offer clemency. This allows for the possibility of exoneration or further legal proceedings to rectify any injustices.
Clearly, then, the death penalty in Nigeria should be re-evaluated. The lack of execution and the potential for injustices highlight the need for a more humane and effective form of capital punishment. Life imprisonment could provide a better alternative, ensuring that criminals are still held accountable for their actions while avoiding the risks and controversies associated with the death penalty.

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