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!