The Central Bank of Nigeria (CBN) is locked in a last ditch battle with Nigeria’s treasury looters. That is what the new cash withdrawal limits and restriction of currency for transactions to the N200 denomination amounts to.
The decision is a monetary policy equivalent of a tactical withdrawal from an indefensible battle line and drawing up a new battle line that is easier to defend.
The CBN’s action amounts to a tactical withdrawal from indefensible battle lines in the failed war against corruption and building a more defendable line. The war on corruption has failed despite the number of convictions obtained.
The new strategy is rattling treasury looters who are desperately looking for where to dump the billions of naira hoarded in their homes.
There are fears that trillions of naira might end up rotting away in private homes as CBN deadline for the circulation of the old naira notes draws near.
Even the House of Representatives is curiously worried by the way the apex bank is tightening the noose around treasury looters. Last week the CBN rolled out fresh guidelines on the use of the new notes.
The apex bank has reduced daily withdrawals at automated teller machines (ATMs) from N100, 000 to N20, 000. Daily cash deposits or withdrawals by corporate bodies is pegged at N10 million while individuals can only deposit or withdraw N5 million.
The new draconian rule governing withdrawals is that everyone will be paid in N200 notes. The policy is apparently designed to make the process of bribery a bit more burdensome.
People would need scores of large Ghana-must-go sacks to deliver bribes of N100 million. The decision to restrict daily cash withdrawals at ATMs to N20, 000 is partially designed to encourage the use of electronic transfers in transactions and reduce the cost and high risk of moving huge sums around in a country where armed robbery has become insurmountable.
Ironically, the House of Representatives wants the cash withdrawal restrictions reversed. There are fears that the restriction in cash withdrawals and the order restricting the currency denominations to be loaded in ATMs to N200 notes might make vote buying in the 2023 general elections very cumbersome. That probably explains the ire of the legislators.
Vote buyers during the 2023 general elections might be compelled to pay through electronic transfers which could easily be traced and used as evidence in court against bribe givers and takers. One thing is certain. If the CBN pursues its new set of monetary policies to a logical conclusion, things would certainly not be the same again.
Treasury looters would have to return to the drawing board to fashion out fresh strategies for looting that would be more difficult to trace. Otherwise, most of them might end up in jail. There are strong indications that the CBN has woken from its slumber and is ready not only to fight inflation and stabilise the naira but to drastically reduce the spate of treasury looting. The naira redesign has forced the parallel market exchange rate of the naira from N910 to N765 to the dollar.
CBN’s new monetary policy rules are very effective. However, in a country where corruption remains seemingly intractable, the policy would be very difficult to implement.
The rule restricting daily cash deposits and withdrawals by corporate bodies and individuals to N10 million and N5 million respectively has been on the monetary policy books for more than a decade. Banks trounce it with obdurate criminality.
Ironically, no one steals billions of naira without collaboration with bank managers. Most of the billions looted from public treasury are withdrawn from banks and either stashed away in private homes or transferred to the looter’s account with bank managers’ collaboration.
The law mandates bank managers to report suspicious deposits or withdrawals to the Economic and Financial Crimes Commission (EFCC). No one in the banks does that.
The N2 billion stolen by Abdulrasheed Maina now serving a jail term, was deposited in UBA and Fidelity banks. No one in the offending banks is standing trial for collecting what was clearly known as stolen money.
The N2 billion diverted from public treasury for Ayodele Fayose’s governorship election campaign in Ekiti State was withdrawn from a bank in Lagos and driven to the airport in the bank’s bullion van. Another of the bank’s bullion van carted the money from Akure Airport to its final destination in Ado-Ekiti.
Fayose is standing trial for the fraudulent transaction. Conversely, the managers of the bank that authorised the dubious withdrawal are calmly enjoying what they were paid for the heinous crime.
Banks managers get their cuts from treasury looters for accepting their deposits and authorising withdrawals of suspicious sums.
The reward for disobeying the law is very attractive and it is made even more attractive by the fact that there is no risk attached to it. No one stands trial for allowing fraudulent deposits or withdrawals.
To ensure strict implementation of the new monetary policy rules rolled out last week, CBN must be ready to break from its past record of playing the ostrich as banks disobey its rules.
The apex bank must be ready to prosecute anyone in any bank that allows anyone to deposit or withdraw more than what is stated in the statutory books.
The CBN must set its examiners after the banks. They must examine banks’ books on daily basis with a view to tracking fraudulent deposits and withdrawals.
Any infringement spotted must be reported instantly to the headquarters for immediate punishment to deter others. EFCC must collaborate effectively with CBN for the new rules to be implemented effectively.
EFCC operatives must be permanently attached to banks branches for the duration of the transition from the old currency notes to the new ones.
They must ensure that no one deposits or withdraws anything beyond legitimate earnings. Anyone behind suspicious deposits or withdrawals must be arrested and prosecuted.
CBN must resist legislators’ primitive move to make Nigeria a 19th century cash economy.
