Good People, I am withdrawing my public support of the recently unveiled Central Bank of Bank’s policy on cash withdrawal limit. I had supported that initiative on the construct that it would help Nigeria deal with its tax problems. Yes, while we continue to think we can rise with oil and gas, the ascension for Nigeria will only come, when we can generate decent taxable economic activities to finance the future in education, healthcare, etc.
But after learning how Nigeria was unable to reconcile how much was collected on stamp duty, I see no reason to believe that inconveniencing the citizens, on how they withdraw and spend their money, via an additional regulatory layer beyond what has existed for years, will advance the nation. If stamp duty which is collected by banks electronically cannot be traced, and reconciled, through the support of the Central Bank of Nigeria, there is no basis to believe they can become more efficient on tax collection with the new cash withdrawal policy.
So, let us eliminate the problems, and hope one day, Nigeria will have the right people to do simple things RIGHT. I worked in the banking sector in Lagos. I worked in the most classified and most guarded department in the bank. The bank’s software automation unit is the heart of any bank. Only the most trusted, vetted and selected get closer. Why? You have access to the bank’s general ledger You are the SUPER-admins of all admins in the bank.
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Why am I going there? A simple subpoena from the National Assembly will make banks produce the conflicting figures in 6 hours. Just a new line of code from those geeks and you have the numbers. The government can then reconcile.
But I do not think that is the real problem. My conclusion is that banks have done their jobs, remitted the money, but people stole it within the government, and some did not get enough, and magically, they are fighting. Wait, after 2 months, the heat will go and nothing will happen.
So, CBN, it’s the government that needs a cash withdrawal limit and not companies and citizens; leave us alone!
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Comment 1: Ndubuisi Ekekwe truth Sir. I have had this figured out for so many years now. Tax is the way forward for us, but let us have a government with pure resolve to checkmate cash flow, shutting down the economy where necessary for a proper reboot or new OS to be installed, the corruption has eaten so deep that quick scan can’t fix anything but rather on the surface, it looks like it’s working until the system breaks completely. Tax is Nigeria’s number one solution to earn more. I have also calculated that Nigeria must be making at least 70 trillion Naira annually, with the majority generated from tax, over 50%. We need a budget of at least 60trillion per year for 6 years for Nigeria to begin to emit freshness all over, and yeah under a condition that naira will fare against the dollar during those periods.
Don’t tell me it’s not possible, in two years, under the right culture and leadership, through fair taxes, we can bring in that sum, but before then, let’s have accountable leaders. I pray that we get one this time, but whatever happens after the election, I am optimistic Nigeria will be a glory from Africa and a shine the world will rely on for many things in the less than two decades from now.
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I feel like responding to this post in atleast four different ways, but that would be quite a lot for a comment, so let’s do the bits.
On your reason for withdrawal, your initial support was based on improving the tax system, well I was more interested in formalizing most of our transactions, so on that count, the policy should stand!
Prior to year 2001, we didn’t know whether our grandparents would be able to talk on mobile phone, let alone being able to initiate or take a call. But today, some of them can even check account balance, recharge airtime on their own, even subscribe to ringtone. All these happened because we democratized mobile telephone, same can happen in our financial system, if we give it all the push.
As for our managers’ inability to reconcile electronic transfers, we understand that our land is badly governed, with the bigger problem being that those who hold sway are unaware of how mediocre and pathetic they are. If they understand, obviously they can’t be putting themselves forward for public office, but you cannot shame the shameless.
Our main priority for the coming election is to elect a thief catcher. Forget about who can build this and that, nothing is more urgent than stopping our thieving elite.
The fixation on taxation is misplaced in my opinion. I have seen it in government circles a lot. To me, it’s a subsequent action to creating an enabling environment for businesses to thrive Can’t we be fixated on creating jobs and improving the status of the jobs created (housing schemes, work environment, labour relations, salary increase/minimum wage, car loan and statutory allowances). I feel tax is inappropriate for majority of youths who can’t eke out a living even when employed. Let’s focus on improving the means of livelihood for young school leavers, then we can create an enabling environment for tax.
Tax? Well, but there’s a certain ambivalence in the system: the government that needs the tax to operate is making production difficult to achieve. How can you collect taxes when there’s no production? When there are round pegs in square holes, it’s difficult to link production and taxes.
However, I think the government has a different objective in rebranding the naira and setting cash withdrawal limits, which if achieved may in the medium and long term resolve some or all of the present concerns about the policy.