The Nigeria Governors’ Forum (NGF) has said that what the Central Bank of Nigeria is at present pursuing under its naira redesign policy is a currency confiscation programme and not in the best interest of the country.
The forum which empathized with Nigerians on the pains they have been subjected to because of naira notes scarcity vowed to employ all legitimate channels to ease the situation.
In a communiqué issued at the end of the 3rd meeting of the NGF held on Saturday, and signed by the forum’s chairman and Sokoto State Governor, Aminu Tambuwal, the governors warned that the country was at risk of recession following the naira redesign policy.
The communique said, “First, we express our sympathies and support with Nigerians who are experiencing great difficulties under the current CBN Naira re-design and cash withdrawal restrictions policy. We feel your pain and we are determined to employ all legitimate channels to ease the situation.
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“It has become necessary to make a distinction between the Central Bank of Nigeria (CBN) Naira redesign policy backed by Section 20 (3) of the CBN Act, 2007 and the aspirational policy of going cashless, both of which are mutually exclusive at this time.
“It is our considered view that what the CBN is at present pursuing is a currency confiscation programme, not the currency exchange policy envisaged under S20(3) of the CBN Act, 2007. Currency confiscation in the sense that the liquidity provided to the general public is grossly insufficient due to the restrictions placed on the amount that can be withdrawn regardless of the amount deposited.
“The current approach of the CBN raises concerns about the respect for the civil liberties and rights of Nigerians as it relates to their freedom to use legitimately earned income as they so wish.”
The governors slammed the apex bank over the handling of the policy, adding that the resulting naira note scarcity was causing hardship.
“The Forum believes that to deploy a cashless policy and deepen digital transactions, the best practice around the world is to create a suite of incentives to attract customers; rather than a draconian approach as we have witnessed in the last three months.”
“The argument by the CBN for what it describes as the astronomical increase in the currency in circulation as the basis for this policy is not supported by its own data. According to the CBN, the currency in circulation increased from N1.4 trillion in 2015 to N3.23 trillion in October 2022. The Bank appears not to have taken into consideration the increase in the size of the country’s nominal GDP over this period, the doubling of consumer prices, the rising population, and the impact of the humongous Ways & Means advances to the federal government by the Central Bank of Nigeria over this period.
“In the circumstances, it is safe to draw either of two conclusions – the CBN data may be incomplete or in fact, Nigerians may have done exceptionally well in the transition to a cashless economy.
“In addition, considering the sizeable informal sector in the nation, the amount of banknotes created in exchange so far by the CBN implies it vastly underestimated the economy’s actual cash needs. The inability to use the new notes has had far-reaching economic effects leading to the emergence of the Naira black market, severe food inflation, variable commodities prices based on the method of exchange, and long queues as well as crowds around Automated Teller Machines (ATMs) and banking halls across the country with individuals hoping to get a fraction of their money in new notes to meet their daily livelihood. The country runs the risk of a CBN-induced recession.
“While we acknowledge the submission of the Attorney General of the Federation that the Federal Government will comply with the ruling of the Supreme Court which calls for the halting of CBN’s plan to end the use of the old currency notes, we are yet to observe changes in the financial system.
The body called on the Federal Government and the CBN “to respect the Rule of Law and listen to the voice of reason expressed by Nigerians and several other stakeholders including the Council of State before the damage to our economy becomes too great to fix by the next administration.”
They directed their Attorneys General to review the suit at the Supreme Court with a view to consolidating the legal reliefs pursued by states.
Old naira notes should co-exist for one year – Tinubu
The presidential candidate of the All Progressives Congress (APC), Bola Ahmed Tinubu, has asked the CBN to announce that the new and old naira notes would co-exist as legal tender for a period of one year following the example of countries that have successfully implemented similar monetary policy.
Tinubu in a statement he personally signed on Sunday also asked the CBN to immediately remove growing tension in the country, eliminate panic reactions by the populace and allow time to scale up infrastructural gaps around alternative payment options to cash.
The APC national leader called for the suspension of associated charges on online transactions and bank transfers and payments via POS until the current crisis is fully resolved.
The former governor of Lagos State said the cost should be considered a roll-out expense by the CBN to incentivise the envisaged shift to alternative transaction channels; for both the financial services consuming the public and those in charge of implementing the scale-up programme.
Part of the statement read, “Following the advice of the Council of States, the CBN should announce that the old and new naira notes (especially the non-withdrawn notes and coins) will co-exist as legal tender for the next 12 months to follow examples of countries that have successfully implemented similar monetary policy.
“Mobilise all Money Deposit Banks, Payment platforms to show clear commitment and timelines on expanding their infrastructure and support services.
“Bring in Fintech companies with capabilities into currency swap programme for the next 90 days to help decongest banking halls and ATM points where people line up for hours.
“The Central Bank and other relevant MDA’s should form an Inter-Agency Action Committee for immediate oversight over the cash supply gaps from the Nigerian Security and Minting Company and deal with issues around capabilities and turnaround time to meet the needs of the informal sector and unbanked people.
“As leaders, our commitment to our country every day must be on how to make life better for our people and we are called upon not to waste the opportunity the moment presents to us to ramp up capacity and capability to serve 200 million Nigerians, leaving no one behind and ultimately improve the living conditions of every single Nigerian.
“Our task now is to restore hope in the country by implementing these steps to energise our people that we can do big things for a better future and shared prosperity. We can build upon this citizen-focused policy challenge to offer a template on how governance should work for the people.”
CBN naira redesign policy disastrous –Catholic Bishops
The Catholic Bishops’ Conference of Nigeria (CBCN) has said that the implementation of the Central Bank of Nigeria (CBN) new naira and cash policy is a disaster.
President of CBCN, Most Rev. Lucius Iwejuru Ugorji, said this on Sunday in Abuja at the opening session of the 2023 First Plenary meeting of CBCN with the theme: ‘Citizens’ participation in good governance in Nigeria’.
He noted that the policy which has resulted in a cash crunch had also added to the anger and frustration of the masses.
While lamenting the development, Ugorji said it seemed the federal government was overwhelmed with the current crisis and the insecurity in the country.
He however urged Nigerians to vote wisely in the forthcoming general elections.
The President of CBCN who is also the Archbishop of Owerri urged candidates vying for political offices to prove themselves to be decent, respectable, peaceful and honest Nigerians.
He said that rather than engage in mud-slinging, acrimony, arson, buying and selling of votes, threats, intimidation and violence, they should focus on marketing their manifestoes as they campaign for votes.
He also urged the leadership of the Independent National Electoral Commission (INEC) and security operatives to live above board and ensure that the election process was beyond reproach.
Ugorji said, “The disastrous implementation of the Central Bank of Nigeria’s (CBN) cash swap policy, which resulted in a cash crunch, has added to the ordeal, anger and frustration of the masses. On account of the hard-biting economic conditions, many of our brothers and sisters are pauperised and go to bed without food.
“Many of them are resorting to crime and begging to survive. This situation is further compounded by the growing debt burden that is mortgaging our future and the future of generations coming after us. The future of the country looks bleak.”
Earlier, the Catholic Archbishop of Abuja, Most Rev. Ignatius Kaigama, in his homily urged Nigerians to be aware of the kind of choice they would make during the general elections.
“With our votes in the coming weeks, we can either choose a reasonable and productive use of power towards unity, security, a good economy or just abandon our fate in the hands of people who have neither capacity nor conscience,” Kaigama said.
By Kamarudeen Ogundele, Abbas Jimoh and Saawua Terzungwe (Abuja)
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