Nigerian central bank raises $225 cash withdrawal limits

The bank has recently announced directives to limit the amount of cash in circulation in Africa’s largest economy.

Nigeria’s central bank has substantially increased limits it had set for weekly cash withdrawals, loosening restrictions it had put in place to curb the use of cash.

Individuals will now be allowed to withdraw up to 500,000 Nigerian naira ($1,122) a week, up from a 100,000 ($225) limit set on December 6. Companies will be allowed to withdraw five million naira ($11,220) a week, up from a 500,000 naira limit.

“The Central Bank of Nigeria (CBN) recognises the vital role that cash plays in supporting underserved and rural communities and will ensure an inclusive approach as it implements the transition to a more cashless society,” Haruna Mustapha, the CBN director of supervision, said in the circular announcing the revised limits.

Most Nigerians have no bank accounts and use informal markets, where cash is preferred, and some analysts said the previous withdrawal limits could hurt citizens and businesses.

Last week, the central bank also started circulating redesigned 200, 500 and 1,000 naira notes under a plan to curb double-digit inflation and move towards a cashless economy. Citizens have until January 31 to turn in old notes, when they cease to be legal tender.

Individuals and businesses in a tight spot can request to withdraw amounts exceeding the limits. Processing fees are three percent for individuals and five percent for companies. Previously, even for special circumstances, limits were set at 5 million naira ($11,220) and 10 million naira ($22,440) respectively.