Naira redesign: Beyond the deadline shift 

Blueprint Whatsapp

Godwin Emefiele is bad news to Nigerian politicians. The governor of the Central Bank of Nigeria (CBN) is starchy, taciturn and defiantly sanctimonious.

He exudes a measure of self confidence that borders on arrogance. The man from Agbor Obi in Delta state has disdainfully stepped on the toes of everyone who matters in Nigerian politics.

For 39 eternal years, no one in the CBN dared to change the colour of Nigeria’s battered currency because of the calamitous consequences of stepping on the sore toes of powerful treasury looters who converted their homes to bank vaults.

While the CBN perennially manipulated its monetary policy rate (MPR) and cash reserve ratio (CRR) in a desperate bid to stabilise the exchange rate of the naira and control inflation, treasury looters were using the mountain of cash in their homes to attack the naira in the foreign exchange market as CBN’s policy plagued the banks with financial asphyxiation.

CBN could only control a scant 15 per cent of currency in circulation while the remaining 85 per cent were in the hands of treasury looters. The decision to give the naira a belated new look changed all that and sent politicians scampering for the safety of their looted funds. They have been ferocious in the fight against naira redesign.

Even some insiders were against the decision to redesign the naira.  Zainab Ahmed, Nigeria’s finance minister, castigated the policy and warned of dire consequences. Ironically, the consequences she speculated paled into insignificance when weighed against the failed fight against inflation instigated by the mountain of cash in private homes.

The National Assembly took to the trenches and studiously defended the overflowing vaults in private homes that frustrated the fight against inflation. Last week the National Assembly ordered the CBN to shift the deadline for phasing out old naira notes to July 31, 2023. The lawmakers are tragically meddlesome and decadently intrusive.

They suddenly remembered the people that gave them the mandate and lamented that impoverished rural dwellers needed the six long months to trade the pittance in their possession for the new notes.

The politicians were telling fat lies. They were not defending the poor. They needed the time to use the looted funds in their homes to buy votes during the general elections.

Besides the buying of votes with looted funds stashed away in private homes, the politicians are trying to bid for time to trade the mountain of cash in their homes for the new notes.

The inconsequential majority impoverished by Nigeria’s selfish and cruel rulers own less than three per cent of the huge sums in private homes. Treasury looters own the balance.

The discordant tunes from within and outside government have contributed immensely to the clumsy execution of the naira redesign project.

There was no sustained public enlightenment campaign.

The poor public enlightenment campaign was responsible for the rejection of the new notes last week in some rural communities.

The rural dwellers were not aware that the naira was wearing a new look. The radio jingles in local languages mandatory for heralding such phenomenal change were hardly deployed.

Even in urban communities the new notes just did not appear in time. I have not taken possession of the new notes up till now. Someone showed me the new N1, 000 note two weeks ago. Since then I have not set eyes on any other one.

The new notes are so scarce that long queues like the ones at petrol stations are now plaguing the few banks branches effecting the change.

The CBN currency swap programme was not activated in time to enable rural dwellers change their pittance to the new notes.

While the poor rural dwellers do not need the six months demanded by the National Assembly, the currency swap should be allowed for at least two weeks after the old notes cease to be legal tender.

Rural dwellers deserve the special attention because Nigerian banks had ignored them for 130 years. Many of the country’s 774 local government headquarters have no bank cash office or branch.

The CBN cash swap project rightly factored in the plight of people in such communities. However, the project lumbered off the ground a few weeks to the January 31, 2023 deadline for withdrawal of the old notes and was not available in some communities a few days to the deadline.

Now that the CBN has grudgingly shifted the deadline for withdrawing the old notes by 10 days, it must ensure that the old notes no longer leave bank vaults.

There are fears that a few days to the deadline, banks deliberately flooded the system with old notes just to frustrate the laudable policy Nothing must hinder the circulation of the new notes.

Besides, CBN must be ready to monitor cash movements in suspicious accounts to ensure that the new notes do not slip back into private vaults.

The apex bank must be ready to wield the big stick against banks that allow anyone to withdraw above the daily limit allowed by law.

Even with the numerous lapses in its implementation, the naira redesign project can pass as a huge monetary policy success. Emefiele said last week that N1.5 trillion had so far been returned to banks vaults.

He was optimistic that by the time the old notes cease to be legal tender, the sum of N2 trillion would have been returned to banks vaults.

In a country where N2.8 trillion of the N3.3 trillion in circulation was outside the banking system, the recall of N2 trillion into bank vaults is a remarkable achievement.

No one expects the CBN to win the war against inflation by simply getting most of the currency in circulation into banks vaults.

The war against inflation can only be won when the federal government abandons its fiscal rascality and cooperate with CBN in the arduous task of drowning the peoples greatest invisible enemy. 

Treasury looters are the greatest losers in the naira redesign project. Their blazing anger testifies to that.

Related content you may like