There has been sorrow and tears for Nigerians who have found it difficult to access cash from their banks due to the Naira re-design policy of the Central Bank of Nigeria (CBN); BENJAMIN UMUTEME writes.
The announcement by the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, that Nigeria was going to redesign the N200, N500, and N1000 notes came to many as a surprise, but not many thought the government had the political will to implement the policy. However, it has become obvious to many that the President Muhammadu Buhari administration wanted to leave a lasting legacy which would ultimately stabilise Nigeria’s micro-economic environment.
The principal aim of the initiative, Emefiele said, is to make monetary policy decisions more efficacious among several other reasons. He said it was important that the Apex Bank mop up the N2.7 trillion that is outside the bank vault.
And like he noted when he addressed the Diplomatic Community on recent monetary policy decisions of the CBN, the governor said, “We have started to see inflation trending downwards and exchange rates relatively stable. Secondly, we aim to increase financial inclusion in the country by reducing the number of the unbanked population.
“Thirdly, our aim is to support the efforts of our security agencies in combating banditry and ransom-taking in Nigeria through this program and we can see that the Military are making good progress in this important task.
“Ordinarily, when CBN releases currency into circulation, it is meant to be used and after effluxion of time, it returns to the CBN thereby keeping the volume of currency in circulation under the firm control of the CBN. It should also be noted that the Notes in private homes and outside the banking system are not available for economic activities and thus may affect the economy attaining its potential growth.”
Sabotage?
Laudable as the policy is, not many saw it coming and some Nigerians would deliberately go out of their way to sabotage the policy all because of their selfish interests.
The widespread inconveniences to the average Nigerian who had to sleep at times at ATMs to get their monies was the lowest point it could get.
In most cases, the scarcity of the Naira is more as result of pervasive incidences of hoarding, tension and elevated agitations, panic queues, panic mop-up of notes by politicians, and incidences of economic opportunism
Speaking with Blueprint, a financial analyst, Gabriel Idakolo, noted that the determination of the CBN to implement the policy has created a lot of challenges.
According to Idakolo, many Nigerians are of the belief that due to the court pronouncement the CBN will allow continued usage of the old currency.
The SD&D Management Limited boss said the scarcity is due partly to inadequate planning and unscrupulous people who are taking advantage of the situation for personal profit.
He said: “The factors at play are a combination of lack of adequate planning by CBN and the Nigerian factor. As usual some unscrupulous people made huge gains from the scarcity which was aided by the inadequate provision of the new notes in circulation.”
He added that anybody found culpable of circumventing the policy should be made to face the music. Adefolarin Olamilekan noted that but for the human element, the naira redesigned policy is a laudable one.
“Nevertheless, the policy is globally recognised as a medium to foster illicit financial flow, terrorism, public looting, and currency counterfeit and excess liquidity in the system. Not to forget that another sole aim of policy is to enshrine the culture of the cashless and online banking system in Nigeria, as well as popularise the e-Naira medium,” he said.
Addressing the situation
Going forward, Idakolo urged the apex bank to “push out at least 500 billion of the new Naira notes into the system and increase the limit of withdrawals at over- the- counter and at ATMs.” According to him, “There should be intense monitoring of banks as regards compliance to lay down CBN directives and adequate sanctions meted out for non compliance immediately.”
Adefolarin called for a review of the policy with a view to addressing some of the shortcomings that have been noticed since its implementation started.
“We expect them to, first and foremost, review the overall objective of the policy. In this way, this will afford them the opportunity to accommodate the lapses that created criticism and outburst amongst Nigerians.
“Secondly, the apex bank needs to work with the informal sector, especially traders, artisans and market women. For instance, all the apex super agents must align to work with the aforementioned group, majorly in the city, urban and sub-urban areas.
“Thirdly, the apex bank must work remotely with beyond the rural areas that Naira swapping takes place. The banks in city centre, urban and sub-urban are over stressed. Mapping out centres to accommodate Naira swapping and banks having mobile cash disbursement at centralised and decentralised outpost would further ameliorate long queues at bank branches.
“Fourthly, there is a need to strengthen communication infrastructure across the country. Failure in online transactions results from poor network provisions and not availability. It beholds on the CBN to deepen its collaboration with the Nigeria Communication Commission (NCC) alongside the network providers companies.
Lastly, the economic saboteurs in our midst must be dealt with. And CBN must take appropriate action against its super agents and their collaborators,” he said.
Tackling Naira scarcity
In an effort to ameliorate the hardship being experienced by Nigerians, the apex bank in collaboration with the EFCC and ICPC embarked on spot assessment to seek to engage filling stations and sales outlets.
Earlier, in the week, the combined team of the Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC) stormed about 20 filling stations and 10 supermarkets to ascertain the level of compliance as well as utilisation of the new policy on new notes.
At least 10 arrests were made across filling stations and malls/supermarkets. Two staffers of 4U and H-Medix supermarkets all on Adetokunbo Ademola Crescent were arrested for obstructing investigations.
The team observed that out of the filling stations and other sales outlets visited, people were found to be violating the stipulated charges on POS., charging exorbitantly above the regulatory threshold.
At H-Medix, the assistant manager was not willing to provide the team with records of cash transactions, saying he is unaware of such records.
At Salbas filling station along Airport Road, the team discovered that PoS operators were positioned at strategic areas around the by the fuel attendants who made cash available to them which they used charging customers above the regulated amount. At AA Rano filling Station along Airport Road the supervisor, fuel attendant connived with PoS operators and were selling the naira. They were arrested and taken into custody by EFCC.
The leader of the joint team in the federal Capital Territory (FCT), the managing director of NIRSAL Micro Finance Bank, Dr. Abdulkadri Kure, warned that personnel of sales outlets found not complying with the directives on the policy would be arrested and prosecuted.
According to Abdulkadir, all sale outlets should deposit all cash transactions for the day at the banks.
He said: “The signal we are sending to sales outlets here is that there is no reason to hold onto cash. Once you sell at the end of the business day, you deposit your money. You don’t keep cash stock in your shop. It’s an act of hoarding, cash is meant to go round to facilitate transactions. What we are saying is that it is a medium of exchange; people should be able to have access to it, to be able to buy.
“So, when you hoard it, others will be looking for it, and that is why we are seeing these queues around. It is not that cash is not available, but people are actually hoarding it.
“Filling stations, supermarkets and major transaction points where people come to buy things, if you have cash, take them to the banks, there are others who also want to withdraw from the banks to be able to effect transactions and they are the major customers of these banks, in terms of deposits.
“So, if you don’t make deposits, then customers of banks who want to withdraw will find cash available. The message is that if you do it and you are caught, you will be arrested and prosecuted.”
However, reprieve has come for Nigerians with the pronouncement by President Muhammadu Buhari shifting the deadline for use of old notes to April 10.