The new cash withdrawal limits by the Central Bank of Nigeria (CBN) has been generating arguments among real estate practitioners. While some see the new policy as the right way to go, others say it would impact negatively on the real estate’s activities/ transactions due to the nature of artisans in the sector. DAYO AYEYEMI reports:
It is no longer news that the Central Bank of Nigeria (CBN) has introduced a new cash withdrawal regime which pegged the cash withdrawal limit via Automated Teller Machine (ATM) to N100,000 per week subject to maximum withdrawal of N20,000 per day.
Even though the new policy is generating a lot of arguments among the citizens, political elites and members of the National Assembly lawmakers, real estate practitioners have also expressed different opinions about the implications of the CBN’s cash withdrawal limits on their sector.
While some of the practitioners see the new policy as the way to go, others are of the opinion that the new scheme will choke volumes of activities and business transactions in the industry.
Speaking with the Nigerian Tribune when interviewed, Managing Director/CEO, Fame Oyster and Co. Nigeria (Project Managers and Real Estate Investment Advisers), Mr FemiOyedele, an estate surveyor and valuer, said the new policy would affect cash transfer and the general business transactions of real estate due to low awareness of internet usage and inadequate bank branches.
Besides, he said the policy would affect the volume and rate of sale of building materials, pointing out that block makers, cement sellers, sand and gravel sellers and tradesmen collect cash for their sales and labour.
According to Oyedele, the implication of the policy is that the construction sector/ building materials sub-sector would slow down in performance for a while until customers are used to cashless transactions like bank transfers.
“The implications on real estate are: Real estate activities are done with a large chunk of money. A lot of the participants in the sector deal in cash. The awareness of internet usage is low, bank branches are inadequate, and this will affect cash transfer and the general business transactions of real estate. The policy will affect the volume and rate of sale of building materials.
“The effect on potential investors and buyers of real estate products is that it will affect sales and letting of real estate for a while. Sellers will evolve new methods of selling properties. Installment payment, bank transfer and tokenise purchase of real estate products will be introduced.”
Advising the government, Oyedele urged the government to create awareness programmes on alternative methods of payment of and receiving money like bank transfer in the radio and television.
According to him, the government should highlight the importance of cashless transactions to the masses, adding that operators of Point of Sale (POS) machines should cover for the traders who cannot use telephone transfer of fund and who cannot go to the banks.
“Government should highlight the importance of cashless transactions which will keep major percentages of money in the banks. This will increase the volume of bank-vault money and the interest on loans will reduce. More customers will have access to loans at reduced rates. Highway robbery and kidnapping will also reduce as nobody will be carrying cash while travelling or have access to large volumes of cash within a short period of time to pay ransom,” Oyedele said.
Former Chairman, Nigerian Institution of Estate Surveyors and Valuers, Lagos Branch, MrDotunBamigbola, does not see any negative implication of the policy on real estate. Rather, he said it would enhance and guarantee safety and transparency in business transactions.
“There will be little or no implication on real estate transactions because most transactions these days are done by electronic funds transfer or banker’s cheques. These modes of payment have guaranteed safety of funds overtime as parties to the transaction do not have to carry cash which is high risk,” he said.
However, there are very limited areas of the building material sub-sector which may use cash in limited quantities when it comes to material retailing. Notwithstanding, the safe mode of payment preferred in the industry is electronic through the various individual sellers’ or retailers’ banks.
“You need to know that the building material sellers trade with a lot of funds when the forex equivalent of investment in the business is considered in Naira. At the same time, these traders are very enlightened.”
According to Bamigbola, CBN’s monetary policy on cash control is welcomed, adding that anyone that wanted to carry cash would need to pay the penalty after following the right processes of proofing the need to carry it.
” I believe it is inevitable for Nigeria to go cashless as the world is moving in that direction and we must start at one time or the other,” he said.
He advised the government through its agencies like the Nigerian Communications Commission (NCC) and others, to ensure an adequate safeguard against electronic fraud.
He said that NCC should ensure penalty to banks for late reversal of non-transferred funds to have them sit up on providing quality customer service on the menace; provide excellent ICT infrastructure in line with international standards as backbone for e-commerce or partner with the private sector to do so.
Chairman, H.O.B. Housing Estates Limited, Chief Olusegun BabatundeBamgbade, said the implications of the new cash withdrawal limits on real estate activities/transactions are multifaceted, adding that it involved short and long term issues.
In the short term, he said the policy would impact negatively on the real estate’s activities/ transactions because of the nature of the artisans primarily involved in the sector’s activities.
“Most of them believe in, and run businesses on a cash basis. Most of them do not have a bank account. Some don’t even have a birthday certificate which is the primary requisite document for BVN,” he said.
He is of the opinion that, with adequate sensitisation, people would all comply with the policy directive.
“Personally, I am 100 per cent in support of the new cashless policy. I have been advocating for a cashless economy for quite an age. It will curb corruption in all facets; it will reduce wastes in many ways; it will remove illicit wealth from the system because all monetary transactions will be traceable.
“This cashless policy deserves an applause. This is the only thing Emefiele and Baba Buhari have done to impress me. Kudos,” the HOB Chairman said.
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About the implications of the policy on the construction sector, Bamgbade said “It will prevent the spread of fake money from circulation. Most of the bulk traders are always falling victims of fake money. I remember vividly when I was a major dealer in telecommunications.Someone purchased goods of N2.2million from one of my outlets with fake money (though in connivance with the staff in charge of the sales outlet. It was discovered and escalated by one of my dependable and trusted staff – Yewande. She blew it open against all entreaties. May God bless her in Jesus name. From that moment, I changed my business dynamics. You pay into the company’s bank account; present your proof of payment and collect your goods.
“I introduced the same model into our real estate activities. Your bank teller is your proof of payment.We do not issue any receipt since we don’t collect cash. Whatever is written on your bank teller is as good as your receipt. This idea has saved the company tremendously. One person attempted to defraud the company in Akure but we caught him when we referred to the bank’s account statement that revealed that he paid N5,000 as against N500,000 he fraudulently wanted to claim.
“The cashless policy has saved my company from so many fraudsters. I have been operating a cashless policy in my business for 20 years ago and it’s very helpful. I hereby recommend a cashless policy to everyone in real estate business or any other business. Its gains are enormous,’ he said.
However, Bamgbade advised the government to implement the cashless policy holistically.
“Every part of the country must be officially compelled through the instrumentality of government to embrace and adopt cashless policy. Soon, we shall defeat corruption in both high and low places in the country. Inflation rate will naturally drop when corruption is nipped in the bud,” he said.
