The furore about CBN currency redesign and cash swap exercise


There is a lot of fuss about the current Central Bank of Nigeria’s currency redesign and cash swap policy. Before Mr. Godwin Emefiele, the CBN governor, returned from vacation in January there has been stories and rumours of his impending arrest by the Department of States Services (DSS) on allegation of sponsoring terrorism and some high placed individuals within the ruling All Progressives Congress (APC) are accusing him of trying to sabotage them by the cash swap policy which kept many observers wondering how and why the new cash swap policy is intended to sabotage some individuals?

The Senate has passed a unilateral resolution without consulting the CBN, extending the deadline for the cash swap exercise to June 31 (a date that does not exist). The speaker of the House of Representatives Hon. Femi Gbajabiamila was quoted to have threatened to issue a warrant of arrest against Emefiele. And the questions on the lips of concerned observers are: why is the National Assembly so quick to react on this cash swap policy deadline when there are more grave issues militating against this nation in the past eight years of the APC regime? Why did they not give matching orders to the IG of police and the service chiefs when the terrorists, bandits and killer herdsmen were killing the rural dwellers, they claim to speak for, preventing them from going to their farms and sacking them from their homes? Why have they not reacted swiftly over the cases of insecurity, fuel scarcity, mounting national debt..? And why attack on Emefiele? Why have they not arrested the real terrorists? Why has Femi Gbajabiamila not issued warrant of arrest against the MD of NNPC over perennial fuel shortages that have lasted for over 20 months now?

All these point to the fact that the money launderers affected by the cash swap policy are fighting back using the National Assembly as their front. At this time nobody can fool Nigerians. They are not fighting for rural people as they claim and have never fought for anybody. Rather than fight Emefiele, the members of National Assembly should work to ensure the success of the programme by going down to the communities they claim to represent to carry out sensitisation exercise about the policy.

Come to think of it, how much would somebody keep in his house or office if it is for— transactional, precautionary or speculative—purposes that he cannot pay into his account or swap within the 45 days window approved by the CBN to exchange the new notes? And why would somebody stash humongous sums of money in his house? Money earned from genuine economic activities should be in the bank vaults or invested in legitimate business. Money hoarded in private vaults is the one embezzled from government coffers or slush funds obtained from illegal activities. It is only those who hoarded millions at home, in their warehouses and septic tanks preparatory for vote-buying that may not be able or willing to swap their monies within this period approved by the CBN for obvious reasons.

Clearly, on the issue of currency redesign and cash swap policy, Emefiele has not erred in any way that will warrant the level of umbrage he had received on account of this. He has acted within the purviews of his powers and responsibilities. Right from the time he was appointed the CBN governor, he has faced battles from many fronts—from those who felt that the control of the nation’s financial system is their entitlement, to those eyeing his position, to those desirous of planting their cronies in the apex bank and the government officials who lacked knowledge of the workings of the economy. But Emefiele has managed to survive all the intrigues, spurious allegations and campaign of calumny because he is a man imbued with incredible emotional intelligent skills and the knowledge of how to manage adversity.

Issuance of currency and redesign of bank notes are duties within the purviews of the Central Bank. In fact, the redesign of the currency is a programme that is recommended periodically for obvious reasons. So, the CBN governor has not done anything unusual that will warrant the hullabaloo the issue has generated. Apart from mopping up excess liquidity in order to control money supply, other reasons for carrying out such routine exercise include: hedging against currency counterfeiting, hoarding, improving the security features in the bank note, controlling currency in circulation and the cost of currency management etcetera. Thus, it is economic sabotage to stash huge sums of money outside the financial system. It makes monetary policy implementation difficult. The DSS and the EFCC should beam their searchlight on those attacking the CBN governor on account of the recent cash-swap policy.

The report from the CBN before the exercise commenced indicates that as at October, 2022 the total money in circulation was N3.23 trillion out of which only N500 billion was in the banking system but in January after the currency cash swap exercise, the money in the banking system increased to N2.4 trillion meaning that the over N800 billion that is yet to return is clearly the one hoarded by the protesting politicians for the purpose of electoral malfeasance. This is the evil strategy of the Nigerian unscrupulous politicians who will pauperise their people and during elections distribute handouts to buy their votes. This was why during the COVID-19 period food items meant as palliatives for the people were hoarded in different warehouses across the nation by unconscionable politicians while people wallow in misery and hunger.

But before I am accused of taking sides with my oga as Nigerians are wont to tribalise and trivialise issues, let me state here that I am one of the most ardent critics of CBN policies in recent times. Admittedly, Emefiele, the current CBN governor is my big brother and my big boss having worked with him in those days but that has never stopped me from criticising his policies. I have in the past criticised the mechanistic and ineffectual policy of pegging the deposit and withdrawal limits in the name of promoting cashless economy just as I did during the era of Sanusi.

 I hope Nigerians are learning from the unfolding scenario. The real problem of the nation is these politicians and their lackeys and blind supporters who have designed poverty as a tool to subvert the will of the people. Do not be deceived, these politicians are desperate. They can use their agents in many places to frustrate the new cash swap policy in order to find reason to malign Emefiele and then continue to extend the deadline for the cash swap exercise for them to be able to use the billions of the old notes they hoarded in their private vaults for voters’ inducement during the election. Already, they have deployed their media hack writers for the purpose of smear campaign against Emefiele and the Agberos and the dormant unionists that refused to work all these while that the nation was in turmoil are already being mobilised for the purpose of sabotage. But, Nigeria this is the time to be resolute; your time to get even with these unconscionable politicians who peculated public funds for selfish purposes by ignoring their antics and voting them out as appropriate.

Irogboli, an economist, novelist and public policy analyst, writes from Enugu via [email protected]

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