Naira swap, cacophony and the limits of verbosity

This decision of the CBN seems to have jolted the All Progressive Congress(APC) out of its cocoon, knowing that its financial strategy in the face of eight years of complete failure has crumbled before its very eyes. The first to fire the salvo is  the APC dominated House of Representatives, which said the CBN should extend the date for six months, up to June when the tenure of Muhammadu Buhari would have expired

 

By Emmanuel Ukudolo l Tuesday, February 21, 2023

 

LAGOS, Nigeria – The Naira redesign policy of the Central Bank of Nigeria, CBN as well as the consequent swap of the old N1000, N500 and N200 banknotes has attracted so much energy and criticism from Nigerians, more especially the political class the way no other policy has done since the return of democracy in 1999.

Initially, the CBN fixed December 15, 2022 to launch and circulate the new Naira banknotes but launched it earlier in November 23, 2022.

Speaking at the launch before the Federal Executive Council (FEC), President Muhammadu Buhari said  the new banknotes have been fortified with security features that make them difficult to counterfeit.

He said a cycle of banknote redesign is generally aimed at achieving specific objectives, including but not limited to improving security of the banknotes, mitigating counterfeiting, preserving the collective national heritage, controlling currency in circulation, and reducing the overall cost of currency management.

He also made it clear that the Central Bank of Nigeria Act of 2007 – grants the CBN the power to issue and redesign the Naira.

President Buhari said the CBN governor approached him earlier in 2022 to seek permission to embark on the currency redesign project.

“I considered all the facts and reasons presented before me by the Central Bank. There was an urgent need to take control of currency in circulation and to address the hoarding of Naira banknotes outside the banking system, the shortage of clean and fit banknotes in circulation, and the increase in counterfeiting of high-denomination Naira banknotes. It is on this basis that I gave my approval for the redesign of the ₦‎200, ₦‎500 and ₦‎1000 banknotes”, he said.

Reacting to acceptance of his proposal, the CBN governor, Mr. Godwin Emefiele said: “Mr. President, only a President of your esteemed and incorruptible stature could have done what we are witnessing today,’’ he said, adding that only about 13 percent of total money in circulation is domiciled in the CBN, with about 87 percent outside the banking sector.

Besides launching the new banknotes, the CBN  fixed  January 31 as deadline for Nigerians to swap their old banknotes with the new crispy notes. But following pleas from Nigerians and well-intended stakeholders,  the CBN extended the deadline to February 10 and insisted that there will be no further extension.

This decision of the CBN seems to have jolted the All Progressive Congress(APC) out of its cocoon, knowing that its financial strategy in the face of eight years of complete failure has crumbled before its very eyes.  The first to fire the salvo is  the APC dominated House of Representatives, which said the CBN should extend the date for six months, up to June when the tenure of Muhammadu Buhari would have expired.

The house summoned the CBN governor to appear before it, with Speaker of the House, Mr. Femi Gbajabiamila threatening to issue warrant of arrest on the CBN governor if he fails to appear for questioning over the policy.

Besides, three governors of the APC, the Kaduna State Governor, Mallam Nasir  el-Rufai, the Zamfara State Governor, Mr. Bello Matawalle and Kogi State Governor,  Mr. Yahaya Bello filed suit SC/CV/162/2023  at the Supreme Court, seeking  among others, an injunction to restrain the Federal Government and its agents, including the CBN, and commercial banks, among others, “from suspending or determining or ending on the 10th of February 2023 the timeframe within which the now older versions of the 200, 500 and 1000 denominations of the naira may no longer be legal tender pending the hearing and determination of the substantive suit.”

As expected, the Supreme Court granted their prayers and fixed February 15 for hearing.  The apex court convened, joined other governors to the suit, urged parties to maintain statuesque and thereafter adjourned to February 22 to hear the substantive suit.

However before the hearing, President Buhari made a broadcast to Nigerians appealing for understanding on the policy. He insisted that there will be no further extension and that the old N1000 and N500 notes have indeed ceased to be legal tenders but that the CBN has been directed to reinject the old N200 banknotes  to lessen the impact of the cash squeeze in the system until April 10, when the N200 banknote will cease to be legal tender.

This broadcast engendered a cacophony of voices, with many condemning and giving counter-directives in a monetary policy that is clearly in the Federal Exclusive list. Senior Lawyers have spoken for and against the broadcast and the decision of the Supreme Court.

But more audacious is the attitude of the Kaduna State Governor, Mallam Nasir el-Rufai, who in a broadcast urged the people of Kaduna to continue to use the old N1000 and N500 banknotes. He even said that the APC candidate, Asiwaju Bola Ahmed Tinubu will reverse the policy when he becomes president.

In a counter broadcast,  el-Rufai took his effrontery further by appealing  to all residents of Kaduna State to continue to use the old and new notes side by side without any fear.

In his words: “The Kaduna State Government and its agencies shall seal any facility that refuses to accept the old notes as legal tender and prosecute the owners. If need be, we shall take further consequential actions according to the law”, he threatened.

His statement became the template for other APC governors, who also gave directives to counter the President’s order.

The Lagos State Governor who has not obeyed the Supreme judgement on Magodo Scheme II  up till this moment jumped into the fray.

“The state government hereby warns those rejecting the old notes to desist from doing so or face prosecution. It is against the law to reject the old notes as doing so is contrary to the position of the Supreme Court,” Sanwo-Olu said. He seems to have forgotten that he who comes to equity must come with clean hands.

The Ogun State Governor, Prince Dapo Abiodun ,issued a statement on his Twitter page warning that any commercial bank that refuses to accept the old notes, stands the chance of being shut down by the state government.

“We will shut down any Commercial bank operating in Ogun state that refuses to accept old naira notes”, he threatened.

The Kano State Governor, Abdullahi Ganduje  also barred his fangs:  “Any bank that refuses to accept old N500 and N1,000 notes will be destroyed. We will not tolerate such disobedience from any financial institution operating within our jurisdiction”, he warned.

All these utterances coming from governors of the All Progressive congress. To further consolidates on these position, Chairman of the APC, Abdullahi Adamu backed these utterances by the governors and called on the president to revisit the issue.

While the APC seems to be content with these utterances, the banks became the recipients of these reckless inciting utterances.

Presidential candidate of the Peoples Democratic Party (PDP), Atiku Abubakar put it succinctly when he accused governors of APC of preparing the ground for anarchy in the country through their virulent utterances and outright confrontation posture over the naira redesign project of the Central Bank of Nigeria (CBN). Atiku made his submission in a statement by his Special Assistant on Public Communications Mr. Phrank Shaibu.

So far, dozens of banks have been torched and destroyed, while several lives have been lost for these lack of self-restraint by those who should ordinarily be role models.

There is hardly any bank that is not affected. The last incident took place in Sagamu, where all the banks were set alight, and properties looted.

While options are available to Buhari to reign in these careless and inciting utterances from the APC governors, the banks must insist on prosecution of those affected and insist on not returning to areas where their facilities have been vandalized until those involved including the communities return the damaged branch facilities to their functional status before the riots and wanton destruction to serve as deterrents to the  youths and affected communities.

Besides, the inciting governors must be made to face the consequence of their actions even after leaving office for acting in breach of code of conduct expected of public officials.