CBN using cosmetic measures to address economic failure, says Kachikwu

The presidential candidate of the African Democratic Congress (ADC), Dumebi Kachikwu, has faulted the Central Bank of Nigeria (CBN) on its recent policy on cash withdrawal limits, accusing it of using cosmetic measures to address economic failure.

Kachikwu who disclosed this while appearing on a Channels Television programme, Politics Today, on Monday night, also alleged that the CBN introduced this new cash withdrawal limit in its cashless policy to prevent possible bank-runs which could lead to panic in the financial system and subsequently a total collapse of the economy.

The presidential candidate drew a connection between the policy and an instance of widely circulated “fake news” alleging that the United States government was withdrawing dollars in circulation in Africa because of corruption and politicians.

“That’s why the naira seemed to appreciate for a period of time. It’s not gotten back to the N800 and above since then. What was happening prior to this? There was a run on the banks; we had a lot of the middle class taking out their money from deposit money banks and they were leaving Nigeria.

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“People didn’t have any trust in the economy anymore and people were taking out their money, buying foreign exchange, and leaving Nigeria in droves. So, what the CBN has done is what you call ‘wag the dog’ – essentially do something to distract the attention of the people from what the real issues are.

“They don’t want a run on the banks because a run on the banks will lead to panic in the financial system, and it will lead to a total collapse of the economy, which is why they have come up with this policy. And what does it do? It restricts you from taking your money out of the banking system, which is reversing what was going on.’’

Going further, Kachikwu in his analysis said that the CBN policy is similar to the ones in Greece, Lebanon, Zimbabwe, and Venezuela, among others.

According to him, when economies are failing, central banks restrict access to money.

“The annoying thing for me is when you attribute it to politics, people storing money in their vaults, vote-buying, and what have you,” he said.

“I’m not saying that does not exist – that exists. But do you know what it means to store N5 billion or N10 billion or to even move N100 million in cash? The volume of that money? The bullion vans required to move that?”