After two weeks of back and forth, the Central Bank of Nigeria finally briefed the House of Representatives on the redesigning of naira notes and the cash withdrawal limit policy.
Deputy governor of the Apex bank in charge of Financial System Stability (FSS) Mrs Aishah Ahmad appeared before the lawmakers to offer the perspective of the bank on the policies at the same time responded to concerns of the lawmakers to the best of her ability.
This eventually put to rest the insistence of the House that the CBN should suspend the implementation of the cash withdrawal limit.
My observation, however, is that the number 4 citizen whose political party form the government at the centre conducted a briefing on the policy of the same government like an outsider. I am sure that the Speaker’s meeting with President Buhari a day before the briefing was to set a tone for what happened on Thursday, yet, Speaker Gbajabiamila played the Ostrich.
Let me reproduce Gbajabiamila’s last questions to Mrs Ahmad and the laters response to the questions so that our readers can form their own opinion.
Nevertheless, irrespective of individual opinion on the conversation below, Gbajabiamila’s attempts to blame the CBN for not complying with Section 8 of the CBN act, I insist, is very lazy. Successive National Assembly have slept of their right over the years and it only took two major policies that attracted political interest for lawmakers to realise the provision of the Act. On this, Mrs Ahmad made her day with her response.
Gbajabiamila – There was a question asked by Hon Gbilah which I want to reiterate, it was about the statutory duty of the CBN under section 8 of the CBN Act to brief this House on your monetary policies, there is a reason, there is a reason why that provision is in the law, but that wasn’t done, it took the prompting of the House, not once, not twice but three times to have the CBN come for this briefing. We are not even asking for it, it is an obligatory briefing under the CBN Act, section 8. The question he asked was that was the CBN aware of this provision of the law. If the CBN was aware of the provision of the law, how come the CBN, before even going public with this policy, did not brief the House?
For every law, there is a reason why that law was made. The reason why the House needed to be briefed under the contemplation of the law was that this House represents the people out there. So by briefing the House, we can now go back, assuming we agree with your policy, to our constituents and let them know what is going on and why it is going on. We could have worked with you if we agreed with you, so the question remains how come the CBN did not brief the House and moving forward that should never happen again.
Ahmad – Your first point Mr Speaker is well noted, it is well taken we remain open to continue to engage and do better. When the House convenes these hearings, it is our responsibility of us to show up and we look forward to you doing so.
Gbajabiamila- Number two, about redesigning the naira, like I said, all your policies may be of good intention, but they say the road to hell is sometimes paved with good intentions. We are aware of the Bank of England, we are aware of the United States. Just of recent the Bank of England changed the polymer notes to King Charles notes and the bank made a publication that that would not come into effect until 2024. In other words, they gave a test notice in a cashless society, how come then can we rationalise two to three months’ notice in a bashful society? In the United States, even when such laws or policy comes into effect, you are allowed to use the old notes at the same time until it is completely faced out. So these are questions that are begging for answers and agitating the minds of many.
Ahmad – You compared our situation with what happened with the Bank of England, when we are making comparisons we need to consider all the factors, global best practice says that you need to redesign currency every five to eight years, but we haven’t done that in two decades. The Bank of England routinely does it, the amount of cash outside in circulation in the UK is much lower than what we have today. We have about 80 per cent outside circulation, so our issue is very very dire and it is very urgent. In terms of the timing, it’s neither here nor there, we looked at the timing based on what we know of, financial access points, availability of points for people o go and pay on their funds and the fact that we actually released the new notes earlier than planned, we felt that we are in a good position to conclude within the timelines that we gave. We are open to feedback and people’s views on that.
Gbajabiamila – And finally, I want to interrogate the point you made further, you said the only 6 per cent of the banking populace are affected adversely by this policy, 94 per cent are not because they withdraw below that limit weekly, that is in percentage terms, can you tell us in numerical terms what that percentage means. How many Nigerians are are captured in the banking system, i heated you said 60 million, which means 6 million people are affected. If that is so, the 6 million may be insignificant to you, but in term limits f trickle down economics, there is a relationship between the people at the top of the pyramid, the 6 per cent and the 94 per cent. The 94 per cent cannot cycle their business without the 96 per cent. So there are things that if you had consulted with us, we would have brought this perspective to re-examine until until we come into agreement.
Ahmad – Thank you for the question on the transactions, let me clarify, when I mentioned 94 per cent, I was talking about transactions, those transactions may be from any number of people not the populace itself. But you asked a pertinent question, it appears that the leadership agree with the general benefit of cashless, we have talked about them, the economic benefits, fraud and all of those things. What we should be looking at is that this policy does not affect well meaning hardworking Nigerians in a negative way. So the transactions that are above the threshold, you will agree with me sir, are not by people who don’t have electronic access, the transaction above these threshold are those that will fully decide for whatever reason not to use the electronic channel. So our focus is to make sure we have access to alternatives, we have already talked about the fact that cash is rooted with problems, challenges, physically risky. So if you decide that you want to take a large amount and expose it to physical risk, there must be a reason sir. And we can’t make a decision that will benefit the entire populace based on just a few.
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