The last may not have been heard on the adverse effect of the new Central Bank of Nigeria withdrawal policy as real estate developers have said the policy, if implemented, will lead to a rise in the price of housing units.
This was as they urged the government to have a quick rethink of the plan as it might make or mar government’s commitment to reduce the housing deficit.
The PUNCH recalls that The CBN, in a memo in November, announced a limit on cash withdrawals made by individuals and organisations with effect from 9 January, 2023.
The bank mandated that over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100,000 and N500,000, respectively, per week. It also directed that the maximum cash withdrawal per week via ATM should be N100,000 subject to a maximum of N20,000 cash withdrawal per day.
But speaking in an exclusive interview with our correspondent, The President and Chairman of the Council of Real Estate Developer Association of Nigeria, Aliyu Wamakko, said the policy would make life unbearable for the 38 million Nigerian unbanked adults representing 36 per cent of the populace.
He said, “It is seriously going to be a herculean task for the unbanked if the government do not rethink this policy.
“The policy to pay processing fees will increase our cost of production and business in real estate is garbage in, garbage out.
“If I have to go to the bank every day and they will charge me 10 per cent for my withdrawals and this happens for 30 days, it will definitely affect my selling price.”
Citing an example, he said, “Real estate construction involves direct labour and its workers are people who work on daily pay. So, you work with them and pay. So, imagine you have 20 houses under construction with not less than 10 labourers on each site. Even if you are paying them N3,000 per day, that will be N600,000 in total, how much are you expecting me to withdraw to pay them?
“Most of our construction is with direct labour and direct labour requires someone to work for you and you pay him there and then. Also, most of these bricklayers and labourers don’t even have a bank account. So, it is mind-boggling for us.
“We know it is a Federal Government issue but we are calling on them to review the policy not only because of us but for those in the rural areas who don’t even what a bank is all about. They should have a rethinking and make life easier for the people.”
Meanwhile, players in the building industry have reacted to the cash withdrawal limit policy of the Federal Government.
They noted that such moves would affect the labourers who are largely unbanked and rely on daily payments for work done.
A contract supervisor, Obinna Francis, said that the CBN’s cash withdrawal policy would affect his business because he often engages the lower rung of the construction ladder.
Francis, who spoke with Sunday PUNCH, said artisans were largely unbanked, adding that those that were banked preferred to receive cash to avoid the high bank charges they might accrue from making daily withdrawals.
He said, “Most of our workers are roadside people; we pick them along the way. So 80 to 85 per cent of the labourers don’t have bank accounts, so they depend on cash.
“Now, if I have up to 30 workers that I want to pay and each of them will receive at least N50,000, if we do the calculation, that is N180,000, but CBN tells me that I cannot only withdraw N100,000 per day.
“How will I help it? If I transfer to my co-supervisors, they will also be looking at the bank charges. The workers don’t want to pay bank charges, if they want to withdraw 50,000 from the POS, the POS people will charge you at least N700 to N1,000.
“So it means the worker will have to forfeit something to withdraw his money from the bank. Except you want to calculate the charges and add them to their payment.
“As a contractor or supervisor, it will affect my profit. If the least I am going to make N50,000 to N100,000 from a project of N1m, I will not want it to go below five per cent profit no matter what.”
However, Akinropo Abraham, a property consultant with Fola Elegbede and Co, told Sunday PUNCH that the CBN policy was a welcome development in the building industry.
He said the artisans would have to adjust and respond to the new way of daily payments.
Abraham noted that the policy would help to curb the incidents of armed robberies caused by the culture of moving and keeping cash for building work.
Also, a property broker, Collin Ibie, disclosed that the policy would affect land owners and land sellers stuck in the culture of receiving cash.
Speaking to our correspondent in a brief interview on Thursday, he said some players in the lower rung of the industry had remained sceptical about bank transfers.
Ibie said he had recently experienced land sellers demanding cash instead of transferring money after the sale of a land.
He said this was because the seller was sceptical about bank transfers.
Ibie, however, noted that the cash withdrawal limit and the cashless policy of the CBN were welcome developments.
“Because of the old-fashioned way of dealing with clients, there are some people who would prefer cash. For example, I closed a sale two months ago and this land seller in Ajah said he was not going to sign the sale documents unless he received cash.
“That led the buyer to go to the bank and bring physical cash. So, not everyone is willing to operate in the cashless society.
“However, I align with a cashless policy, which means that any person that I will have dealings with will have to adhere to the new bank policy. I am for it; it is stressful moving cash everywhere.”
“Even for the labourers, they have to be encouraged to have a bank account. People are adjusting, and roadside sellers and mechanics are gradually adjusting to a cashless society. It may affect my business for a while, but I am for it.”