The biting scarcity of the new naira notes which has led to the
rationing of currency notes in the country should be a grave source of
worry to the monetary authorities. Nigerians are exasperated and
frustrated as most ATM terminals across the country are not dispensing.
The situation has become so dire that there are reports of women in
labour dying due to the inability of their loved ones to make cash
deposits in the hospitals. Only yesterday, placard-wielding civil
society groups marched through the streets of Lagos, demanding that the
redesigned Naira notes be made available. It is clearly the failure of
leadership that has now brought the country to this sorry pass. Those
pushing the citizenry to the wall must be wary of the social unrest
which a pushback can cause, particularly in this election season.
It
has become so bad that residents of border communities in Sokoto,
Zamfara, Katsina, Adamawa and Kwara states have now resorted to CFA
franc which is the legal tender in eight West African countries of
Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal
and Togo. This is happening in Nigeria even though Section 2 of the CBN
Act makes it clear that the naira is the currency of payment for the
domestic supply of goods and services in Nigeria. Nigerians living in
these border communities switched to CFA franc following the increasing
rejection of the old Naira notes coupled with their inability to access
the new naira notes. Should the people then be blamed for finding a way
out of a chaotic cash squeeze?
Nobody anticipated that the
situation will be this haywire when the Central Bank of Nigeria (CBN) on
October 26, 2022, announced its plan to redesign the N200, N500 and
N1000 banknotes. President Muhammadu Buhari subsequently unveiled the
notes on November 23, 2022, while the apex bank fixed the January 31
deadline for their validity. As the deadline approached, the new notes
couldn’t be accessed by Nigerians in the banking halls and ATMs.
Businesses stalled as other means of payment became overwhelmed. It is
so disheartening that stashes of the scarce Naira notes are now been
flaunted by terrorists who the federal government ab initio said were
the target of the policy.
A bandit kingpin, Kachalla Baleri,
terrorizing parts of Kaduna State released a video showing him and some
armed men displaying N1000 and N200 notes. He went on to say, “They (the
government) redesigned the naira, poor people who are innocent don’t
even know about it. Some don’t even own up to N10,000. The people they
are referring to as terrorists have hold of the money. This is the new
N1000 note, this is the new N200 note”. If the new Naira notes are so
soon being used to finance terrorism, what then is the point of this
harrowing inconvenience? We just hope this is mere propaganda by the
terrorists.
In response to the excruciating difficulties of
Nigerians, the central bank on Thursday directed the commercial banks to
commence the payment of the redesigned Naira notes over the counter,
subject to a maximum daily payout limit of N20,000. In a statement
signed by its Director, Corporate Communications Osita Nwanisobi, CBN
downplayed the severe sufferings its policy has caused Nigerians as mere
“queues at Automated Teller Machines (ATMs) across the country”. Naija
News makes haste to tell the apex bank authorities that it is actually
worse than that. CBN can’t be noticing queues when there are videos
online of near stampedes and affrays at ATM galleries! More so, citizens
have been left stranded to the extent that at least N1200 is charged
out of every N10,000 withdrawals they make from their accounts via POS
agents.
It remains to be seen how this new directive to the
deposit money banks (DMBs) will make any difference given that they have
severally been fingered as frustrating the Naira redesign policy. The
CBN governor, Godwin Emefiele said this much when he appeared before the
House of Reps Adhoc Committee on the New Naira Redesign. Last month,
the CBN told Nigerians to refuse to collect old notes from banks. The
banks themselves have denied getting enough of the new Naira notes from
the CBN. It must be stated that the CBN is not smelling of roses in the
altercation between it and the commercial banks on the availability of
the new notes. Given that it is the regulator, the dog should wag the
tail and not the other way around. If bank officials have been caught in
sharp practices to the detriment of Nigerians, the apex bank must deal
decisively with this to restore sanity to the system.
The
Association of Senior Staff of Banks Insurance and Financial
Institutions (ASSBIFI) challenged the CBN to publicly declare how much
of the new Naira notes have so far been printed and distributed to banks
for disbursement compared with what has been withdrawn from the public.
Naija News believes that this is truly a question that the apex bank
must address. Emefiele had gleefully announced that courtesy of the
Naira redesign policy, 75 per cent of cash outside the banking system to
the tune of N1.9trn have been mobbed up. Yet, he was silent on the
number of new notes issued by the central bank to keep the nation’s
economy afloat. A significant portion of these monies that have been so
mobbed up is the working capital of small business owners. They obeyed
the CBN directive by depositing their old Naira notes only for them to
end up unable to lay their hands on the new legal tender.
The CBN
remains a public institution and there must be a human face to its
policies. Effecting a measure that has so hurt the masses in a democracy
is highly unacceptable! What sort of thoughts went into this chaotic
policy in the first instance? The conundrum and suffering which have
been created by this ill-thought-out policy go to show how removed
policymakers in the country are from the people. The sort of quandary
and confusion those in the countryside have been thrown into by this
naira redesign policy can only be better imagined.
Why will the
CBN go about fixing what is not broken when there are other matters
requiring its attention? If it’s about the cashless policy, Nigeria is
already in a good place in that regard. Out of the total money supply of
N52trn, the cash component is just N2.6trn which translates to a
cash-to-GDP ratio of 5 per cent. Even advanced nations of the world
don’t have it this good. More so, there was a 42 per cent increase in
cashless transactions as of 2022. This is a huge letdown as these
persons are now at the mercy of exploitative POS agents! So much for the
financial inclusion drive of the monetary authorities. The CBN must be
reminded that the rural economy cannot do without cash in their
quotidian lives. Urban centers residents can make do with
e-transactions. After all, some members of the upper class transact
business only in US dollars.
If it’s too much to expect the CBN to find practical solutions to this
cash squeeze in the system, the apex bank should at least return the
excess cash it has mopped up from the system. Naija News believes it can
do this by allowing the old and new currencies to co-circulate until
such a time that there is enough of the redesigned Naira notes.
Nigerians don’t deserve to be denied their hard-earned money when most
needed, and neither should their businesses suffer low patronage. The
Nigerian people should be spared this exploitation by unscrupulous
bankers and POS operators because they want to make cash withdrawals.
The CBN must rethink this calamitous Naira re-design policy now!
