The Central Bank of Nigeria (CBN) has ushered in a revised cash management policy, effective from January 1, 2026, sparking a mix of relief and deep-seated concerns across the nation's financial landscape. The policy, which scraps all limits and fees on cash deposits, is a direct reversal of the contentious 2022 rules implemented under former Governor Godwin Emefiele. It aims to prevent a repeat of the cash scarcity crisis that plunged Nigerians into transactional hardship ahead of the 2023 Presidential elections. However, under the leadership of Governor Yemi Cardoso, this well-intentioned move is fraught with implementation grey areas that demand scrutiny.
New Withdrawal Limits and Lingering Systemic Failures
The revised framework sets weekly cash withdrawal ceilings at N500,000 for individuals and N5 million for corporate bodies. Transactions exceeding these limits will incur a processing fee of 3% for individuals and 5% for corporates, with the revenue split 40% to the CBN and 60% to the handling bank. These limits extend to ATM withdrawals, now capped at N100,000 daily and N500,000 weekly. Furthermore, the policy allows all naira denominations to be loaded into ATMs and retains the N100,000 limit on cashing third-party cheques over the counter.
While the CBN states its goals are to lower the cost of currency management, enhance cash security, and combat money laundering by promoting digital payments, reality paints a different picture. The most glaring issue is the deplorable state of ATMs nationwide. The CBN and commercial banks share blame for this systemic failure, which has directly fueled the boom of the Point-of-Sale (POS) agent business. Millions of Nigerians now depend on POS operators for daily cash, paying extra charges—a clear indictment of the formal banking system's inefficiency. The revised policy sidesteps this core infrastructure problem, leaving ordinary citizens to continue bearing unnecessary costs.
Security, Financial Inclusion, and Electoral Risks
In a country grappling with pervasive insecurity, the policy's increased cash withdrawal limits pose a significant security risk. Easier access to large cash sums could incentivize criminal activities and ransom payments, further endangering citizens, especially the vulnerable. Additionally, the policy sends conflicting signals. On one hand, it encourages cash usage; on the other, it contradicts the CBN's long-standing cashless policy drive, which gained momentum under former Governor Sanusi Lamido Sanusi.
The move may also undermine financial inclusion. Micro and small businesses, which might find temporary relief, could be discouraged from fully embracing the banking system due to persistent charges like stamp duties and account maintenance fees. For the CBN, this reduces visibility into the money supply and economic activity at the grassroots level.
A critical question looming over the policy is its timing ahead of the 2027 General elections. The removal of deposit limits and higher withdrawal thresholds create a smoother avenue for political actors to withdraw massive funds for vote-buying and other undocumented election expenses, threatening electoral integrity.
A Policy at Crossroads
The revised cash policy, while attempting to return the economy to a pre-2022 normalcy, is potentially counterproductive. It fails to address the foundational issue of non-functional ATMs, risks exacerbating insecurity, muddles the cashless policy agenda, and opens doors for electoral malpractice. While micro-enterprises may see short-term benefits, the broader implications suggest the CBN's homework may be incomplete. The success of this policy will hinge on addressing these critical grey areas to avoid creating new problems while solving old ones.
