Last October, the Central Bank of Nigeria (CBN) announced a decision to redesign the N200, N500 and N1000 notes! The CBN said that members of the public were hoarding banknotes, it had statistics showing that over 85 per cent of the currency in circulation is domiciled outside the vaults of commercial banks. Therefore, it was necessary through the redesign, to call in the notes into bank vaults. That way, the volatility of the naira will be brought under control!
The commendable effort by the Central Bank of Nigeria elicited various reactions. Some commended it while some others found no justification for the exercise. And both sides were loud and voluble. Even senior political figures stepped into the fray with threats of sack of Emefele, renting the air. But the CBN remained adamant and insistent on the naira redesign. A policy which had clearly the backing of the President.
Just on Sunday, while announcing the extension of the deadline, the CBN Governor Godwin Emefiele assured that the currency redesign has yielded significant results! Naira was being brought out from all manner of hideouts into the open. Indeed, the social media was awash with news and pictures of decaying naira notes surfacing from soakaways, dugouts and even water tanks.
Emefiele reminded Nigerians why the naira redesign became necessary and inevitable in the first place. “Available data at the bank showed that in 2015, currency-in-circulation was only N1.4 trillion. As of October 2022, currency in circulation had risen to N3.23 trillion; out of which only N500 billion was within the banking Industry and N2.7 trillion held permanently in people’s homes,” he said. He revealed that since the commencement of the programme, the CBN has collected about N1.9 trillion, “leaving us with about N900 billion (N500b + N1.9trillion).”
Indeed, no serious country desirous of sound monetary management would allow such huge amount outside the control of the banks and the central bank will do nothing about it, especially when such monies have been found to be fueling kidnapping for ransom, terrorism financing, money laundering and other illicit transactions that does not want to be traced as well as vote buying to compromise the electoral process and subvert democracy and shortchange the people.
Despite the good intentions of the CBN, the naira redesign had been resisted by some of the elites citing some of the challenges ordinary Nigerians pass through to get their old notes changed. It has also become a political tool by some candidates ahead of the general election.
As a matter of fact new twist was added to the decision of the CBN to redesign the N200, N500 and 1,000 banknotes, when the presidential candidate of the ruling All Progressives Congress (APC), Asiwaju Bola Tinubu, alleged that the currency redesign and fuel scarcity were contrived to sabotage his victory at next month’s election. Adopting a cautiously belligerent tone, Tinubu told a mammoth crowd of APC members and supporters at the party’s presidential campaign rally in Abeokuta that the fuel scarcity and naira redesign project were artificially created to discourage people from voting for APC. He said the target was to deny him victory at the February 25 presidential election. The rally held at the MKO Abiola International Stadium in Abeokuta was attended by APC leaders at the state and national levels.
Tinubu alleged that some powerful individuals in the country were behind the fuel crisis and scarcity of the new naira notes, saying they intend to scuttle the coming election. Few days later one of the staunchest supporters of Tinubu and governor of Kano State Abdullahi Ganduje, asked President Muhammadu Buhari to postpone his planned visit to the state due to security concerns and complaints from locals about difficulty in obtaining the new naira notes. Ganduje’s request was contained in a letter to the president, according to a statement signed by Abba Anwar, the governor’s media aide. Buhari was scheduled to visit the state on January 30 and 31 to commission some projects executed by the Ganduje administration. The governor was quoted as saying lawmakers from the state, political stakeholders and the business community agree with the decision to postpone the planned visit. Ganduje also called for an extension of the deadline for returning old naira notes.
“Deeply concerned with the hardship caused by the limited time given for halting the use of old Naira notes by the Central Bank of Nigeria (CBN), and for security reasons, Kano State governor Abdullahi Umar Ganduje reveals that the state resolved and wrote to Presidency that, the visit of the President to commission some projects to be postponed,” the statement reads. Barely few hours after Ganduje advised Buhari against visiting his state, he rescinded the decision, saying the president was now free to go ahead with his scheduled Monday visit to the state. He changed his mind after he led a delegation from the state to meet with President Buhari in his country home in Daura, Katsina State on Sunday. According to Ganduje, “We are now ready to receive him and we have a lot for him to commission including federal government projects and state government projects.
They are state-of-the-art projects.” It was the same day that CBN announced the extension of the naira swap deadline, which was also announced by Emefiele in Daura.
Similarly, the Peoples Democratic Party (PDP), presidential candidate Atiku Abubakar had called for the extension of the naira swap. He said the people are suffering non-availability of cash, though he understands the situation was not intended. In a video on Twitter, Atiku observed that the CBN decision to redesign the naira notes has generated wide reactions within and outside the country.
Obviously, President Muhammadu Buhari and the CBN governor had to respond to the complaints and do the needful which they did on Sunday when Buhari approved the extension as recommended by Emefiele.
You will think that this was enough to satisfy the opponents of the policy, including the All Progressives Congress (APC) dominated National Assembly. Alas the lawmakers do not seem to care about the dangers posed by billions of naira outside the control of the CBN. If the lawmakers cared the House of Representatives Ad Hoc Committee would not have rejected the deadline extension for the validity of the old naira notes. In a statement on Sunday, Alhassan Doguwa, chairperson of the ad hoc committee on new naira redesign and naira swap policy, said the Central Bank of Nigeria (CBN) must “follow the law”. “The 10-day extension for the exchange of the old naira notes is not the solution. We as a legislative committee, with a constitutional mandate of the house, would only accept clear compliance with section 20 sub 3, 4, and 5 of the CBN act and nothing more,” Doguwa said.
“Nigeria as a developing economy and a nascent democracy must respect the principle of the rule of law. And the House would go ahead to sign arrest warrant to compel the CBN Governor to appear before the ad hoc committee.” In the statement, Doguwa was said to have described the extension as a “mere political gimmick to further deceive Nigerians”, adding that the CBN governor must appear before the committee as requested. This is even as a House of Representatives ad hoc committee has recommended to the House speaker Femi Gbajabiamila to issue a warrant of arrest against Emefiele for ignoring its summons over the naira redesign policy. What does all this show? It is that there is a push back by those who are comfortable with a situation where over 85 per cent of money in circulation are outside the control of the banks. They do not seem to care about the consequences of this situation to the peace and security of Nigeria, as long as they could win elections through vote buying which is one of the crimes that the naira redesign is targeted to eliminate in this election circle.
However, despite the shenanigans of the naira redesign opponents the gratifying news is that the policy is achieving its intended purposes.
“We are happy that so far, the exercise has achieved a success rate of over 75 per cent of the N2.7 trillion held outside the banking system,” Emefiele had said while announcing the naira swap deadline extension in Daura on Sunday.
Politicians should allow the CBN governor to do his job. Enough of this bullying of Emefiele by lawmakers, security agents and other vested interests as he tries to bring sanity to the amount of cash in circulation outside the banks’ control.
MAY NIGERIA REBOUND