Banking & Finance Economy

NECA cautions CBN on implementation of cashless policy

NECA cautions CBN on implementation of cashless policy
Written by Maritime First

…As FAAC says FG, States, LGAs share N740.880bn for August***

The Nigeria Employers’ Consultative Association (NECA) on Thursday warned that the country’s economic environment is not ripe for full implementation of cashless policy, as recently announced by the Central Bank of Nigeria (CBN), describing the policy as an overkill, exploitative which will impact negatively on the citizens.

The association’s Director-General, Mr. Timothy Olawale who gave the warning in Lagos, also noted that the full implementation of the policy would impact negatively on several sub-sectors of the economy.

Although Olawale said that the initiative was laudable, he however insisted that the current business environment and the available infrastructure were not ready for such a development.

“Several sub-sectors of the economy, including the fast-moving consumer goods and retailing, downstream oil and gas, and transportation, among others, will be negatively impacted by the policy, as they are still predominantly cash-dominated.

“Corporate account holders are still battling with the N50 stamp duty charge on every transaction above N1,000, commission on turnover of 0.1 percent, with the about-to-come-on-stream 7.2 percent Value Added Tax.

“Also, with the additional five percent as processing fee for withdrawals and three percent as processing fee for lodgements of any amount above N3 million, it is needless to say that the policy is an overkill, exploitative and will impact negatively on the citizens,” he said.

The director-general said that the country’s 2019 Doing Business Report rated Nigeria 146th out of 190 economies.

Olawale said: “this and other uncoordinated and unplanned policies will further bring hardship on the people and lead to further contraction of the economy.”

He called for the exemption of the aforementioned sub-sectors, if CBN must still go ahead with the cashless policy.

He also urged the CBN to ensure that all deposit money banks improved their facilities as against inefficiency in our payment platforms to reduce incidences of fraud.

Olawale reiterated the need for wide consultations and stakeholders’ engagement on a continuous basis before the implementation of policies.

Also read:  Customers express disappointment over CBN’s directive on transaction charges

In another development, the Federal Government, States and Local Government Areas (LGAs) on Thursday shared N740.88 billion as federal allocation for the month of August.

This is contained in a communique issued at the end of the Federation Accounts Allocation Committee (FAAC) meeting and signed by Mr Ahmed Idris, the Accountant-General of the Federation (AGF), in Abuja.

The shared amount comprised revenue from Value Added Tax (VAT), Exchange Gain and Gross Statutory Revenue.

The communique said that the gross statutory revenue of N631.79 billion received for August was lower than the N674.36 billion received in the previous month by N42.56 billion.

It added that, revenues from Petroleum Profit Tax (PPT) and Companies Income Tax (CIT) increased considerably, while VAT, Royalties, Import and Excise Duties recorded decreases.

It also said that the gross revenue available from VAT for August was N88.08 billion as against the N94.15 billion that was distributed in July, resulting in a decrease of N6.07 billion.

However, additional N20 billion from the Forex Equalisation Account would be shared accordingly among the three tiers of government, it said.

It also said that Exchange Gain yielded a total revenue of N1.002 billion.

On the sharing formula, overall, the Federal Government received N301.8 billion representing 52.68 per cent, while states received N188.92 billion or 72 per cent.

The communique said that Local Governments received N142.65 billion, representing 20.60 per cent.

It added that mineral producing states received N43.51 billion as 13 per cent derivation revenue, while revenue collecting agencies received N43.98 billion as cost of collection.

He added that the Excess Crude Account (ECA) balance stood at 328.12 million dollars.


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Maritime First