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Nigeria has officially restricted massive cash withdrawals from the bank. The cut-off date for the new regulation was from 9th January 2023. The measure has been taken to cool off inflation, purportedly due to an excessive money supply
Nigeria has officially restricted massive cash withdrawals from the bank. The cut-off date for the new regulation was from 9th January 2023. The measure has been taken to cool off inflation, purportedly due to excessive money supply.
Nigerians will only be allowed to withdraw US$ 44 per week per individual and US$11,000 for businesses. This policy is most likely to affect millions of Nigerians especially businessmen and high cash-intensive activities.
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The authorities feel that this could succeed in limiting the mass of banknotes in circulation, so as to control illicit financial flows and corruption. This would also help in modernising the payment system such as digital money transfers, mobile money, or e-naira. However, economists are skeptical about the move saying that the mass of banknotes in circulation represents only 6% of the total money supply. They suggest that inflation is caused by excessive borrowing of the state from the central bank. That money is in circulation. It can be sucked out if the state repays the money to the central bank, which it has borrowed.
