Nigeria eases restrictions on cash withdrawals under popular pressure

Two weeks after imposing caps on weekly cash withdrawals, the Central Bank of Nigeria (CBN) had to raise them significantly in the face of public discontent.

The central bank acknowledged in a statement Wednesday "the vital role cash plays in supporting rural and disadvantaged communities and will ensure an inclusive approach in its transition to a cashless society.

The Central Bank of Nigeria had decided to impose caps to limit the use of cash in the economy.

Among other things, it was concerned about counterfeit bills, the volume of cash out of the banking system and the huge amounts of ransom money being paid to bandits and kidnappers.

"The maximum weekly withdrawal limit for all means for individuals and companies should be 500,000 naira (1,049 euros) and 5 million naira respectively," the central bank said in its statement on Wednesday.

On December 6, the institution drastically reduced the weekly cash withdrawal limit for individuals from 2.5 million naira to 100,000 naira overnight.

For companies, the limit was reduced from 3 million naira per day to 500,000 naira per week.

The decision angered Nigerians who use a lot of cash for business, especially in the informal economy where many do not have bank accounts.

The institution has also launched new 200, 500 and 1,000 naira bills.