Buhari, CBN, halt the naira redesign chaos


SHAKY from its conception, and haphazard in implementation, the Central Bank of Nigeria’s naira redesign policy has morphed into a national crisis with harsh implications for the economy, social cohesion, and national security. Between them, Godwin Emefiele, the capricious CBN Governor, and the President, Major General Muhammadu Buhari (retd.), have by their mismanagement of the currency redesign heightened tensions across the land, pummelled the economy anew and reinforced anxiety over the 2023 general elections that are just nine days away.

Yet, the country needs to be pulled back from the brink, and the two officials are the constitutional authorities to play the major remedial roles. Having triggered the damage, they must act quickly and firmly, apply the brakes, and salvage the country. The policy may have (officially) been well-intentioned, but the planning and preparation have been incredibly shoddy, the implementation even more so, and the issuance of a stream of orders – some contradictory – to banks have lacked the bite of enforcement.

Without delay, the CBN should immediately extend its deadline for the old N1,000, N500 and N200 banknotes to cease to be legal tender. There is a time to count your losses, admit your blunders, retreat and re-strategise to achieve desired objectives. In the naira redesign move, the time is now.

The nationwide crisis triggered by the shambolic implementation further exposed the CBN’s incompetence and Emefiele as a misfit. Moreover, the debacle has confirmed the failure of national institutions and the oft-demonstrated incapacity of the Nigerian state to enforce its writ, the hallmark of failed and fragile states.

The resulting acute cash shortages in the country have paralysed socioeconomic activities, bred violence, and inflicted suffering on the citizens, worsening the prevailing hunger and anger nationwide. The operation has clearly failed; a new action plan is, therefore, needed to address the challenges it has thrown up. Basically, good intentions do not necessarily always translate to good results.

This is a pity, another setback for the anti-corruption and anti-money laundering drive, as well as efforts to clean up the country’s highly monetised politics and elections. Among its objectives, the policy sought to flush out the billions of hoarded currencies that had led to a shortage of clean banknotes in circulation, neutralise the rising currency counterfeiting, and force many more persons into the formal banking system and towards achievement of the cashless economy aspiration.

Unstated by the CBN, but articulated by Buhari, the change, amid a tight deadline just before the elections, was also to maroon the billions of naira known to have been stockpiled by politicians, including governors and other state actors, to influence the elections. Properly executed, the policy would have forced them, kidnappers, terrorists, bandits, other criminals, and hoarders to either move their immense hoards into the banks or be saddled with worthless old notes.

Alas, the bungling has impacted the innocent, the vulnerable and the economy negatively, while institutional failure has allowed the hoarders, politicians, and criminals to obtain the new notes denied to the masses.

Buhari’s promise to announce a decision to resolve the crisis within seven days has yielded nothing. As usual, he has failed to provide the expected firm leadership at a moment of national crisis. Consequently, the confusion festers; riots have broken out, some believed to be sponsored, banks have been vandalised and the country is on edge. It matters that a prolonged petrol scarcity has beset the country for many weeks, while insecurity rages on. Violence accompanies the electioneering and there is anxiety at home and abroad over the coming polls.

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The country cannot afford Buhari’s usual aloofness; he should immediately direct Emefiele to resolve the mess he created.

As usual, with their selfish interests threatened, politicians have been muddying the waters. In this, they are also dragging in the judiciary, as the courts have been issuing a series of rulings that deepen rather than resolve the quagmire. Unable to rebuff the politicians, the judiciary’s authority is once more being sullied. Experts have been penning divergent views on a Supreme Court restraining order. Defiantly, banks and petrol stations, in violation of the ruling, have stopped collecting the old naira notes from customers.

Though the highest court reserved the case till February 22, the banks, taking advantage of the contradictory directives from the CBN, are violating the order with impunity and inflicting misery on Nigerians.

Decisive action must be taken to resolve the crisis before it degenerates into an uncontrollable breakdown of law and order.

The situation is already impacting cash-based local businesses and markets. Network issues are disrupting business transactions and PoS agents are taking advantage to extort the people. In a country where the informal sector contributes 57.7 percent to GDP, according to the World Economics Quarterly Informal Economy Survey, this is devastating to households. SMEs that the International Labour Organisation says account for 84 percent of employment, are also taking a battering.

With an ineffectual CBN, banks treat its regulations with disdain, hoard bank notes and sell to their favourites. Recently, Kaduna State Governor, Nasir el-Rufai, alleged that one governor collected N500 million new notes from a bank. The security agencies should investigate this and other reported misdeeds.

The country’s deficient infrastructure is unable to support the cashless policy and a high percentage of electronic transactions routinely fail. The CBN should return to the drawing board. This time, it should be a collaborative effort involving the Federal Ministry of Finance and the law enforcement agencies without compromising the CBN’s autonomy over monetary policy.

Lack of collaboration with other important stakeholders helped to subvert the ongoing exercise. Knowing the intervention was certainly bound to have wider implications on the political economy, the failure of the CBN to carry along the state governors (some who have gone to court to challenge it), the business sector, and other critical stakeholders, is a fatal omission. Emefiele should stop blaming everyone but himself, acknowledge the CBN’s blunders, retreat, re-strategise and fix the mess he created. Buhari should ensure that this happens today. ,

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