EFCC arrests bank official over alleged hoarding of new naira notes.
The Economic and Financial Crimes Commission (EFCC) on Monday arrested the operations manager of a branch of an unnamed commercial bank in Abuja for allegedly hoarding N29 million of the new naira notes.
EFCC’s spokesperson, Wilson Uwujaren, said in a statement that the bank refused to load its Automated Teller Machines (ATMs) despite having N29 million of the redesigned Naira notes in the branch’s vaults.
The commission said it took the bank official, whose name was also not given, into custody for further questioning. It said its operatives also ordered the bank to load the money in the ATMs and make payment to customers over the counter.
The EFCC described the incident as a sabotage of the government’s monetary policy by some banks.
“Before he was whisked away for further questioning, the operatives ordered the loading of all the ATMs and the payment of the stipulated amount across the counter to the delight of the distraught customers who had spent hours on queues without getting the new notes.
“This discovery, which indicates a sabotage of the government’s monetary policy by some banks, was made by the EFCC in continuation of the ongoing surveillance and visit to banks across the country to access their vaults and verify whether they were deliberately refusing to dispense the redesigned Naira notes. More than five bank branches were covered today by the operatives in Abuja. Similar exercises were ongoing in Zonal Commands across the country,” the commission’s statement read in part.
The arrest came two days after the Independent Corrupt Practices and Other Related Offences Commission (ICPC) said it arrested two bank officials Osun State, for refusing to load its ATMs with cash.
The EFCC also in its statement, vowed to continue its operation “until normalcy is restored to the banking system.
“Nigerians finding it difficult to access their funds at any bank and suspects foul play should contact the commission, for immediate intervention.”
In recent weeks, Nigerians have been rushing to meet the CBN deadline for the phase-out of the old N200, N500, and N1,000 notes.
The new policy has created chaos with many Nigerians having to endure hours of queuing at Automated Teller Machines (ATM) points. Others have also had to pay exorbitant charges for withdrawals through Point of Sale (POS) centres.
As a result of the ongoing hardship experienced by many Nigerians, the CBN Governor, Godwin Emefile, had extended the earlier deadline of 31 January, by 10 days up until 10 February..
On Friday, President Muhammadu Buhari also urged citizens to give him seven days to resolve the cash crunch that has become a problem across the country from the policy of the CBN to change high value Naira notes with new ones.
He said this after the All Progressives Congress (APC) governors visited him at the Presidential Villa to seek solutions to the cash crunch which has plunged many Nigerians into hardship.
The Federal Capital Territory (FCT) High Court at Wuse Zone 2, Abuja, has ordered the Central Bank of Nigeria to ensure the enforcement of its 10 February deadline on the validity of the old naira notes.
The judge, Eleojo Enenche, gave the order on Monday in a ruling on an ex parte application by four opposition political parties.
The four parties – Action Alliance (AA), Action Peoples Party (APP), Allied Peoples Movement (APM) and National Rescue Movement (NRM) – in their application alleged that the CBN’s new monetary policy was being sabotaged by Nigerian banks.
They sued President Muhammadu Buhari, the CBN and the CBN governor, Godwin Emefiele, along with 25 Nigerian banks as defendants.
In a public announcement last week, the CBN governor, Mr Emefiele, extended the deadline for legal tender status of the old N200, N500 and N1000 notes from 31 January to 10 February.
The extension followed a public outcry that greeted the scarcity of the new naira banknotes. The CBN governor announced the extension after meeting with President Buhari, and directed banks to receive the old bank notes even after the deadline.
Ruling on the opposition parties’ ex parte application on Monday, the judge issued an order restraining the CBN “from suspending or interfering with the currency redesign” deadline of 10 February.
The court also ordered the defendant “not to suspend, stop, extend, vary or interfere with the extant termination date of use of the old N200, N500, and N1,000 bank notes being 10 February, 2013 pending the hearing and determination of motion on notice.”
The court similarly ordered the Chief Executive Officers and Managing Directors of 25 Nigerian banks “to show cause why they shall not be arrested and prosecuted for the economic and financial sabotage of the Federal Republic of Nigeria by their illegal act of hoarding, withholding not paying or distributing the new N200, N500, and N1,000 notes being the legal tender of the Federal Republic of Nigeria…”
On Monday, the Economic and Financial Crimes Commission (EFCC), disclosed that it arrested the manager of a commercial bank branch in Abuja for allegedly hoarding the new naira notes.
The anti-graft agency, however, did not reveal the names of the bank and its manager.
The court restraining the CBN and other respondents in the suits from tampering with the deadline would last for seven days, a copy of the order seen by PREMIUM TIMES shows.
The order comes after three states being governed by the ruling All Progressives Congress (APC) governors filed a suit at the Supreme Court challenging the deadline set by the CBN to phase out the old naira notes.
The states – Kaduna, Kogi and Zamfara – cited the hardship of many Nigerians who are grappling with the impact of the scarcity of the new naira notes as one of the reasons the CBN policy should be reversed.
Many Nigerians have had to spend long hours on queues to collect their money from Automated Teller Machines (ATMs) across the country. Many who cannot access the machines have been paying exorbitantly to be paid by Point on Sale (POS) retailers.
Other top APC members, including the party’s presidential candidate, Bola Tinubu, have also criticised the CBN policy alleging that it was put together to derail the forthcoming general elections.
Three states in Nigeria have asked the country's highest court to stop the federal government and central bank from ending the use of old naira currency notes this week, saying this was causing hardships, ahead of an election later this month. The Central Bank of Nigeria (CBN) gave a 10-day extension until Friday for citizens to turn in 1,000 ($1
Credit: https://www.devdiscourse.com/article/politics/2345538-nigerian-states-challenge-central-bank-cash-swap-deadline2.17), 500 and 200 naira notes, after which they will cease to be legal tender.
The plan has sparked acute cash shortages and chaotic scenes at banks. Most transactions in Nigeria are still in cash. Some ruling party officials have publicly accused the CBN of a plot to turn voters against its presidential candidate in the Feb. 25 election, in which President Muhammadu Buhari is not running because he is serving his final second term.
Kaduna, Kogi and Zamfara state governments in northern Nigeria filed a suit in the Supreme Court on Monday saying the cash swap had caused restiveness among Nigerians and that this would "degenerate into the breakdown of law and order." The three states are seeking an order "restraining the federal government through the CBN (and) the commercial banks from suspending on the 10th of February 2023 the time frame within which the now older versions of the 200, 500 and 1000 denominations of the Naira may no longer be legal tender."
The court could make an interim ruling this week.
A senior aide to the President of Nigeria, Muhammadu Buhari, Ajuri Ngelale, has revealed that the President was misled by the Central Bank of Nigeria (CBN) about the supply of the new naira notes. The Senior Special Assistant to the President on Public Affairs, Ajuri Ngelale, stated in an interview that the CBN’s report that it had supplied sufficient amounts of the new notes to all bank branches was false. This has resulted in exorbitant charges for Nigerians to obtain the new naira notes and the perception that the government is intentionally or unintentionally causing financial hardship.
The President extended the deadline for the exchange of old naira notes from January 31 to February 10 after receiving this false intelligence. The Economic and Financial Crimes Commission and the Independent Corrupt Practices and other related Offences Commission are now actively involved in overseeing the distribution of the new naira notes and monitoring the process.
In what many have described as unprecedented in the history of the country, Nigerians now pay exorbitant charges to get the naira notes from PoS operators. As of Saturday afternoon, in some parts of Lagos, N5,000 old notes attracted N1,000 commission while N6,000 new notes attracted as much as N2,000 commission.
He said the President would defend the masses no matter whose ox is gored, adding that he wouldn’t be opposed to an extension if it became necessary.
“If he gets any intelligence that during the length of this 10-day window that the wrong things have been done or the right things have not been done and that the new naira notes have not been distributed among the people, Mr President has that option on the table of extending that deadline and that will be left to his discretion. Certainly, it is going to be based on what he sees happening across the country in the course of these seven days.
“We are heartened by the new information we received from the CBN that now over-the-counter collections of the new naira notes will now be made available to banking customers.”
Even though the President on Friday asked for seven days to solve the naira scarcity, many Nigerians are apprehensive about the extent to which the crisis could have degenerated at the end of the seven days.
As the Central Bank of Nigeria’s Naira redesign policy bites harder, the scarcity of new notes continues to disrupt business activities in markets, restaurants, banks, and major sales outlets across Nigeria.
In the midst of the operational challenges being faced by small businesses especially in rural areas, a PREMIUM TIMES’ survey showed that Point of Sale (PoS) transaction charges jumped 400 per cent in most cities across the country last week.
The impact of the CBN policy and its attendant chaos have frustrated efforts by many Nigerians operating in the nation’s cash-dependent informal economy to do business, make payments, and enjoy certain services.
PREMIUM TIMES’ findings showed that while the poor circulation of the new notes stifle economic activities, PoS operators have also had a hard time getting both the old and new notes from the banks in recent weeks. Some PoS agents who spoke with PREMIUM TIMES within the week said that their inability to access cash has stalled their operations, while operators who struggled to get cash blamed the hurdles they encountered at the banks for the increase in transaction charges.
Across some of the mobile money cash points visited in Lagos, Abuja, and other major cities, our reporters observed that charges on transactions have skyrocketed by over 400 per cent.
In other places, PoS outlets were shut as operators complained of scarcity of both the old and new notes.
The CBN on 26 October, 2022, announced the introduction of redesigned 200, 500 and 1,000 naira notes into the financial system. But since the notes were unveiled, Nigerians across different parts of the country have had a hard time accessing it from banks and ATM points.
Last week, amid the chaos caused by the scarcity of the new notes, the CBN extended the deadline for the phasing out of the old notes from 31 January deadline to 10 February. Despite the extension, many Nigerians working in the informal sector of the economy have had to scramble for the new notes while others lamented their inability to withdraw their hard earned money from their bank accounts.
There have equally been allegations of hoarding on the part of the Deposit Money Banks, while some mobile cash point vendors are said to be exploiting the situation by dispensing the new notes to customers at skyrocketed prices.
On Friday, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, asked Nigerians to be “patient and join the bank queues” to access their money.
Meanwhile, President Muhammadu Buhari during a meeting with the Progressive Governors’ Forum also urged citizens to give him seven days to resolve the cash crunch that has stifled productive engagements across the country.
As Nigerians besieged commercial banks nationwide to access cash, several videos have surfaced online showing frustrated customers vandalising bank properties due to their inability to get cash from the banks’ ATMs.
In the midst of the melee, anti-graft agencies and the State Security Services ( SSS) have equally arrested a number of citizens caught hawking the naira notes.
Despite the government’s best efforts thus far, the chaos has worsened the hardship being faced by Nigerians in major cities and rural communities as the new deadline for the phasing out of old naira notes approaches.
In Nigeria’s capital city, some of the PoS outlets visited within the week were under lock and key, while some that were open jerked up their charges for cash withdrawals and transfers.
At Lugbe Zone 6, Aina Wale, a PoS operator charged N800 for each N5000 cash withdrawal due to the scarcity of the naira notes.
“Banks are not dispensing enough naira and this makes it very difficult for us to access the notes,” he said. “We don’t plan for this, but it became necessary to do because we are now using money to collect money in banks.”
Another operator in the area, who refused to have his name mentioned said that the banks are not giving out cash to customers despite the long queues in their branches.
“We don’t get the cash again,” the POS vendor lamented, adding that he had to offer a ‘bribe’ last Wednesday before a bank official offered to provide cash for him.
“I said to myself I can’t stay here. Could you believe that when I entered the bank there were queues also but I went straight to a bank official to help me out and the lady told me that she will collect some percentage which I agreed to and I was able to get just N20,000,” he said.
Another POS operator at Zone 5, Peace Okoye, complained that operations have been difficult because of the scarcity of new and old notes.
“Bank is not giving cash and today I went to that ATM in Lugbe Shoprite and it was the same thing. There was a long queue. Only one ATM was dispensing and it was dispensing just N2,000 and the highest you can withdraw there is N20,000 which means you have to withdraw 10 times before you can get the N20,000, people were much and I left,” Ms Okoye explained.
“No access to cash, so the thing just weakens me. If I have access to cash I would have made money this season.”
At the Kapwa axis of Lugbe along airport road, PREMIUM TIMES also observed that several POS vendors’ kiosks were shut.
A POS operator at Kapwa who identified himself simply as Lukman, said he has not been operating for the past five days.
“We don’t have cash. Withdrawals have been very difficult at banks and ATMs,” he said.
Most PoS outlets were also shut in the Apo resettlement area of Abuja as operators blamed scarcity of cash for their inability to meet customers’ needs.
They also alleged that bank officials give them both old and new naira notes at a fee, hence the reason behind the increase in charges on withdrawal.
Daniel Atuluku, an operator at the fish market, charges N600 on every N5,000 transaction, he told PREMIUM TIMES.
“The man (banker) only gives me N300,000 daily and if I give people any amount they want, it wont go round. The first day I tried it, the money didn’t last up to 30 minutes” he said.
“Even with that, I can’t serve customers for the whole day and the stress my brother and I go through daily to get access to the man is another thing.
“When people talk about the charges, they think we are making a lot of money from it but we sincerely pray this ends soon because we also suffer the same thing as the people.”
PoS agents who spoke with this newspaper in Benin city, the capital of Edo State, described the cash crunch in the city as a “big problem”.
A PoS operator who identified himself as Abdul said many PoS agents in the state are now taking advantage of the situation to extort Nigerians.
“We POS agents have now taken advantage of the situation. Although I can’t blame them because they are now buying cash from either bank managers or agents of bank managers as if they are buying tomatoes in the market,” he told PREMIUM TIMES in a telephone interview.
He alleged some agents are displaying both the new and old notes for sales like book vendors in the market. Mr Abdul claimed that among PoS operators, N100,000 new notes are being exchanged for N150,000 in Benin while the old notes of same amount are being exchanged for N120,000.
“People are still buying it from them, and most of the buyers are PoS agents. So they will now increase withdrawals and transfer charges to make up for the extra cost of buying the currency,” he explained.
Mr Abdul lamented that ATMs of top banks like Zenith, Access and GT banks in Benin are not dispensing cash unlike others like Union and Keystone banks.
“Even the ones dispensing are rationing the cash. The maximum withdrawal is N20,000 and the stress is just too much,” he said.
Similarly, another PoS agent, Hauwa, who does cash transactions at Aviele community in Auchi, said that she was discouraged by the queues at banks, in addition to the low amount of cash being paid to customers by banks.
“The major thing now is that there is no money. Agents who have cash are charging N100 per N1000 (old currency) and N200 per N1000 of new notes,” she said. Based on this, she said she has not been able to make any transactions within the past few days.
In most places in Lagos, the nation’s commercial nerve center, PoS operators charged N100 for every N5,000 withdrawal before the new policy was introduced.
But PREMIUM TIMES found over the weekend that the charges have been jerked up to an average of N500. Similarly, PoS operators that charged N200 on every N10,000 transaction now charge an average of N1000 or more.
At the Ojodu area of Lagos State, a PoS operator who identified herself simply as Sandra told PREMIUM TIMES that the charges skyrocketed because of the difficulty experienced at the banks.
“It’s difficult to get cash, whether old or new notes, at the bank,” she said. “In some instances, we have to beg and bribe bank people and we also have to factor in those extra fees into our charges.”
In most parts of Igando and Ijaiye areas in the state, residents told this newspaper that many PoS outlets were shut as they scramble for cash.
“Sales have been very dull since this trouble started because people don’t have cash, including even salary earners who have money in their accounts,” Bisi Aina, a trader in Iyana-Ipaja area of the state, told PREMIUM TIMES Sunday evening.
The chaos caused by the cash crunch has been worsened by the hardship inflicted on Nigerians due to a lingering fuel crisis. In recent months, the scarcity of petroleum products across the country has stifled the operations of businesses that depend on generators for power supply.
Despite the government’s repeated claims that the nation has enough supply, the scarcity has persisted amid a poor supply of electricity across the country.
In addition to the massive disruption in economic activities, the crisis has led to an unprecedented spike in the cost of essential goods and transportation services across states in the country.
Last Tuesday, President Muhammadu Buhari approved the constitution of a 14-member steering committee to address the supply and distribution of petroleum products across the country.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), also attributed the lingering fuel scarcity in the country to a disruption in the product distribution chain caused by the activities of cross-border smugglers.The agency also claimed that there is petrol sufficiency of over 1.6 billion litres as of 26 January both on land and marine.
On Tuesday, Nigeria’s chief of defence staff, Lucky Irabor, warned that the scarcity had become a ‘security concern’ and ‘nobody is indispensable’ in bringing a solution to the problem.
On Friday, the Nigerian government said it is working towards finding a lasting solution to the lingering petrol scarcity across the country.
Despite the government’s position, PREMIUM TIMES’ found that Nigerians have continued to suffer from scarcity of petrol across the country, especially in the nation’s commercial nerve center, Lagos.
As the cash crunch inflicts more pains on Nigerians, many angry Nigerians are taking to the streets to vent their frustration.
On Friday, a protester was killed in Ibadan as security officers clashed with a group protesting scarcity of fuel and new naira notes in Apata area of the capital of Oyo State.
Protests have been going on in many parts of the city since Friday as mostly young people expressed their frustration over the scarcity in the state.
A group of protesters also attacked the Oyo State governor’s office when security agencies attempted to deny them access to speak with the governor.
Subsequently, on Saturday, soldiers and police officers were deployed to major areas where protests were taking place but the protesters in Apata refused to stop their protest when the security officers approached them.
Similarly, residents of Uvwie and Warri South Local Government Area of Delta State, on Friday, took to the streets to protest against lack of access to the naira.
The protest forced some banks to suspend activities and scores of market women barricaded the Warri-Sapele Road and NPA Expressway.
While tension rises in both states amid scarcity of the new notes, and amid fears that the violence could spread to other states of the federation, Nigerians await the impact of the CBN and Nigerian government’s intervention in addressing their pains this week.
Mr Buhari last week urged Nigerians to give him seven days to address the hardship and other concerns generated by the new notes scarcity.
In his intervention, an Abuja-based economist, Razaq Fatai, urged the CBN to allow both the new and old notes as legal tender until there are sufficient new notes in circulation.
“They should temporarily allow both the old and new notes as legal tender until they are able to inject sufficient new notes into the system,” Mr Fatai said.
He said the CBN also needs to step up their supervision of deposit money banks to ensure effective circulation of the money to citizens as soon as possible.
“This is not the time to keep money in the vaults,” he added.
On his part, Onofiok Kings, a financial expert, said a lot of Nigerian politicians are not happy with the naira redesigning policy because of illicit motives and vote-buying culture.
“Basically, most politicians aren’t happy because they still have a lot of cash stacked up to use for bribe during the forthcoming elections,” he said.
“Even though it’s affecting the masses, I’m happy with this decision of lack of circulation that is if it’s really being strictly controlled.”
Nigerian banks on Monday denied allegations of fuelling the scarcity of the redesigned naira notes across the country.
The Association of Corporate Affairs Managers of Banks, ACAMB, empathized with the public on the hardships consequent upon the rollout of the new notes and reviewed cashless policy.
The President, Rasheed Bolarinwa, in a statement made available to DAILY POST, said the banks could not be the clog in the wheel of progress when they had already invested about N100 billion in the system.
Bolarinwa said the fund was used in setting up and maintaining cutting-edge electronic channels in recent years as part of the ongoing commitment to seamless customer experience and real-time digital financial transactions.
He noted that from internet banking to mobile apps, Automated Teller Machines, ATMs; Point of Sales, PoS, merchants, mobile wallets, Unstructured Supplementary Service Data, USSD, codes, agents and digital franchise, 80 per cent of Nigerians now enjoy digital/cashless services.
ACAMB said the commitments have seen Nigeria rising steadily and recognised as having arguably Africa’s most advanced digital financial services industry and one of the world’s top 10 real-time payment markets.
The financial institutions declared their full support for the enhanced cashless policy championed by the Central Bank of Nigeria, CBN.
Bolarinwa said they were collaborating with the regulator and other stakeholders to urgently address constraints in the implementation and ensure citizens suffer no untoward pains in the transition process.
“ACAMB affirms without any equivocation that Banks are not in any way hoarding or holding back naira notes or engaging in any act inimical to our avowed commitment to exciting customer experience.”
Bolarinwa said ATMs are being loaded daily while cash is being disbursed under the supervision of CBN Inspectors and anti-graft agencies.
The banks listed additional measures as the deployment of extra technical support for online payments, additional security at ATMs for all-clock usage, technological back-up to reduce online downtime, additional staff deployment to attend to cash transactions and timely interbank and inter-branch networking.
The statement expressed confidence that the measures, in addition to efforts of the CBN, “will result in greater ease of access and cash liquidity”.
ACAMB, however, appealed to customers to exercise patience and not resort to violence against any bank, its employees or banking facilities.
It reminded them that many banks are public companies owned by millions of Nigerians and provide employment to tens of thousands of staff who work to ensure reliable and secured services.
Three state governments, Kaduna, Kogi and Zamfara, have sued the federal government at the Supreme Court over the hardship occasioned by the scarcity of the redesigned naira notes.
The three states are in northern Nigeria of which President Muhammadu Buhari’s home state, Katsina State, is a part. The governors of the three northern states that filed the suit are also members of the same party, APC, as President Buhari.
The Central Bank of Nigeria (CBN) last October announced last that it was redesigning the N200, N500 and N1,000 banknotes.
Godwin Emefiele, the CBN governor, announced 31 January as the deadline for the expiration of the old banknotes.
But due to the public outcry trailing the currency scarcity, Mr Emefiele extended the deadline till 10 February. He added that money deposit banks would continue to receive the old banknotes even after the deadline.
Despite the deadline extension, however, the scarcity of new notes has persisted.
Not pacified by the adjustments to the monetary policy, the three state governments on 3 February sued the federal government at the Supreme Court asking for an order suspending the policy.
The plaintiffs through their lawyer Abdulrakeem Mustapha, are seeking an order “restraining the federal government through the CBN…the commercial banks…from suspending 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.”
In their filings before the Supreme Court, the plaintiffs said “many citizens have to date not seen the newly redesigned naira notes let alone exchanged their old notes for the new notes,” despite assurances by the government to make the currency available.
They contended that the “inadequacy of the notice (of naira redesign) coupled with the haphazard, cack-handed manner the exercise is being carried out and the attendant hardship… has been well acknowledged even by the Federal Government of Nigeria.”
The plaintiffs argued that “there is no justifiable basis for the ongoing difficulties and suffering being meted out on the …good people of Kaduna, Kogi and Zamfara States by the Federal Government.”
Peoples Democratic Party (PDP) presidential candidate Atiku Abubakar has urged Nigerians not to allow the forthcoming election be determined by bullion van tendencies.
Atiku, in a message to his supporters via email, was apparently referring to the two bullion vans seen entering the premises of the All Progressives Congress (APC) presidential candidate, Bola Tinubu, ahead of the 2019 general election.
He urged Nigerians to use the power of their Permanent Voters Card (PVC) to channel their frustration to vote out the All Progressives Congress (APC) in the forthcoming general election.
Atiku said, “A few days ago, I had cause to make a statement on the currency conversion policy of the federal government.
“In the said statement, I aligned my position with an upsurge of demands for a slight extension of the January 31st deadline.
“It is also noteworthy to appreciate the good work being done by the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC) for busting unscrupulous elements who hoard money in secret warehouses.
“Under no circumstance must we allow the outcome of this election to be determined by the bullion van tendencies.”
“The frustration that we all go through at the moment can be corrected if the CBN continues to do its part and operatives of the EFCC and ICPC, too, ensure that people do not keep stacks of money out of reach of the public.
“The other side of the bargain is for us as Nigerians to use the power of our PVC to channel our frustration to vote out the APC in the forthcoming general election,” he said.
The redesign of the Nigerian currency by the Central Bank of Nigeria is raising fundamental questions on the domain and objectives of monetary policy. This is coming against the background of the difficulties and challenges which ordinary Nigerians have experienced while cooperating with the bank. This discourse reviews the implementation of the currency redesign within the context of the CBN Act and the overall imperative for a sound financial system.
S.2 of the CBN Act, 2007 states that the principal objects of the bank shall be to – (a) ensure monetary and price stability; (b) issue legal tender currency in Nigeria; (c) maintain external reserves to safeguard the international value of the legal tender currency; (d) promote a sound financial system in Nigeria; and (e) act as banker and provide economic and financial advice to the Federal Government. By S.18 of the Act, the bank is empowered to (a) arrange for the printing of currency notes and the minting of coins; (b) issue, re-issue and exchange currency notes and coins at the bank’s offices and at such agencies as it may, from time to time, establish or appoint.
The bank also has a developmental banking role as envisaged in S.31 of the Act. This developmental banking role is for the purpose of promoting the development of money or capital markets in Nigeria or of stimulating financial or economic development so however that in any such case, the total value of the holdings of shares or, as the case may be, debentures to which this section applies shall not at any time exceed ten times the aggregate of the bank’s paid-up capital and the general reserve fund of the bank.
Furthermore, the bank in S.32 has omnibus incidental powers, subject as is expressly provided in the Act generally to conduct business as a bank, and do all such things as are incidental to or consequential upon the exercise of its power or the discharge of its duties under this Act.
These objectives, functions and powers do not suggest that the bank is set up as an alternative government that solves all Nigerian challenges within the street sense of money solving all challenges. But the CBN seems to be proceeding with this street sense. When the airlines were down, the bank pumped money; when the Federal Government thought we need to increase local food production, the bank responded with cash that was disbursed outside the bureaucracy of the Ministry of Agriculture which houses the technical skills and overall mandate for food production. Back to the currency redesign.
Essentially, the currency redesign and re-issue exercise comes under the broad powers of the bank to issue legal tender, re-issue and exchange currency notes and coins. In redesigning the currency and issuing the legal tender, it appears the Act envisages that the CBN should do so within the context of satisfying the other monetary policy objectives to wit; ensuring monetary and price stability and promoting a sound financial system in Nigeria. It will be recalled that the bank requested Nigerians to pay in the old currency to money deposit banks so that they would eventually get new notes when they need their money. This is a routine exercise that should be done seamlessly and without much noise. It does not require a high level of intelligence for the bank to print new money or for Nigerians to pay in old notes with the expectation of getting new notes.
But it was expected that for the bank to successfully redesign the currency while meeting other objectives and without exposing citizens to hardship, it would have done some level of research and surveys to understand the key issue and challenges as well as undertake simulations across selected geographies and population groups before selecting the appropriate logistics arrangements for the redesign, deployment of new notes and general access by the populace. This would have also informed the timeframe for the exercise. Evidently, from the experience of Nigerians so far, the bank through its leadership pronounced the policy without thinking it through and was more interested in its dictatorial directions, with a “no going back” mindset even if the heavens are falling.
Furthermore, it appears that the street sense of money solving all challenges played a key role in the formulation and implementation of this policy. This led to a lack of strategic focus and took the attention of the bank away from the key monetary policy issues. Several justifications have emanated from the bank, which are not part of the monetary policy remit of the bank. These include inter alia fighting terrorism, money laundering, vote buying by politicians as we move towards the 2023 elections. Strictly speaking, these objectives stated by the bank in the currency redesign are not part of monetary policy provisions of the Act. The foregoing challenges are linked to agencies that have the primary mandate of fighting them. Terrorism and money laundering should be handled by law enforcement agencies and Nigeria has established a plethora of these agencies. Vote buying should be within the remit of the electoral umpire, the Independent National Electoral Commission. This submission is not intended to deny the need for inter-agency collaboration where the bank should have intervened at the invitation of the lead agencies to deploy its functions and powers to assist in fighting these crimes. But the bank cannot be the lead agency in these interventions. Against the background of the foregoing scenario, the bank operating as a one size fits all intervener may be scratching the surface in non-monetary policy objectives by failing in its core mandate. This is exactly where we are.
If the bank had strictly limited itself to redesigning and printing new currency notes and phasing them into circulation while gradually withdrawing the old ones, the evident challenges would not have arisen. Today, we have a situation where Nigerians have paid in the old notes but the bank failed, refused and neglected to supply sufficient quantity of new notes to the money deposit banks for disbursement to depositors. People are begging and crying for their hard-earned money, for which no one has accused them of any crime in its acquisition. The online money transfer mechanisms are overwhelmed while the bank keeps lying that it had supplied enough money to the money deposit banks.
A picture of a party where attendees sprayed money became evidence of money deposit banks diverting money to the rich and upwardly mobile in a corrupt scheme to sabotage the bank. But Nigerians forget that spraying money at parties did not start today and has been part of our party culture. It was even outlawed in the CBN Act of 2007, meaning that this practice has been around with us over the years. And we have not been told that the persons spraying the money acquired it illegally. With so much poverty, hardship, and ignorance, it is easy for many Nigerians to find scapegoats. Even the anti-corruption agencies whose duty it is to fight money laundering and terrorism had ceded the lead this time around to the bank. They have deployed at the instance of the bank and are chasing imaginary enemies of the state.
In the final analysis, the solution to the current impasse is for the bank to make more money available. The allegations of diversion or not making the money available to Nigerians can only arise due to scarcity of the new money. No one was hoarding the old notes that were everywhere.
This site uses Akismet to reduce spam. Learn how your comment data is processed.
June 12 represents total freedom, the free expression of the will of the people, justice, equality, respect for human rights...
In a related development, on January 30, Ambassador-at-Large, Head of the Secretariat of the Russia-Africa Partnership Forum Oleg Ozerov also...
President Buhari, you must take the conn! There is a raging tempest and you do not have the luxury of...
Still in West Africa on the Atlantic coast, Guinea said it would prosecute former president Alpha Conde, who was toppled...
Ohaneze did not mince words in telling everyone that it has only one candidate that it is supporting with all...
Enter your email address to subscribe to Opinion Nigeria newsletter.
No thanks, not feeling lucky today!
North Central Youth Stakeholders Forum (NCYSF) has flayed presidential candidate of the Peoples Democratic Party (PDP), Atiku Abubakar, for opposing extension of submission of old naira notes.
The chairman, Mohammed Mohammed, while urging Nigerians to remain vigilant, charged them to be prepared for a mass “Bring Back Our Old Notes” protest in the event that insufficiency of the new notes persists beyond February 5 (yesterday).
A statement by the group reads in part: “The North Central Youth Stakeholders Forum has received with utter dismay newspaper reports quoting Atiku Abubakar asking the Central Bank of Nigeria not to extend the deadline beyond the February 10,2023 deadline.
“We find this comment very callous, reckless and insensitive to the plight of the masses, as well as unbecoming of a man, who is aspiring to become Nigeria’s President. Indeed, this did not come to us as a surprise because Atiku Abubakar is known to have made the infamous statement that God never answers the prayers of the poor.”
Warning that the general elections should not be undermined by unpatriotic citizens, the organisation, lauded President Muhammad Buhari on the currency swap, especially the 10-day extension window.
Hayab, in a statement issued at the weekend, stated: “CAN Kaduna State chapter wishes to salute President Buhari for insisting that the 2023 elections must be free and devoid of vote buying. We also like to thank the President for the 10-day extension for the old currency to lose its legal tender status.”
ALSO, Human and Environmental Development Agenda (HEDA Resource Centre) has charged the apex bank to review its new notes’ apportioned ratio policy and collaborate with law enforcement agencies in monitoring agent cash swap operators, as well as officials against irregularities.
Recall that the CBN Bankers Committee, last Wednesday, issued a communiqué stating that the new notes allocated to financial institutions “shall be apportioned in the ratio 40:30:30 for Agent Cash Swaps, Over-the-Counter and ATMs respectively.”
A statement, yesterday, by HEDA’s chairman, Olarenwaju Suraju, said the civil society organisation (CSO) insisted that “it is essential for the apex bank to review the policy to address different circumstances and ensure sufficient release of cash into the system, as well as take instant action on agent cash swap operators’ activities by ensuring that the purpose of the exercise is not defeated by corrupt operators and bank officials, as some are recently arrested by anti-corruption agencies.”
According to him, verified information gathered by the group indicate that some of swap operators are responsible for sale of new notes to merrymakers, who abuse the currency and those reselling to ordinary users, while bank officials are “irresponsibly preserving cash for politicians and bank owners.”