Members of the management team of the Central Bank of Nigeria are to meet on Monday to review the crisis that the naira redesign programme has generated and come up with solutions to the acute cash crunch that has nearly paralysed the country.
Cashflows gathered that the meeting would also consider the advice given by the National Council of State that the apex bank should print more redesigned N1,000, N500 and N200 notes or re-circulate the old ones withdrawn from circulation in order to ease the current cash crunch.
It was learnt that the meeting, which will hold at CBN headquarters in Abuja, would involve the top echelon of the apex bank, and a fresh directive might be issued to Deposit Money Banks on whether to keep accepting deposits of the old notes or not.
An official of the CBN told one of our correspondents on Saturday that a decision would likely be made on the continuous circulation of the old notes at the meeting.
He, however, said the advice to print more money would not be straightforward due to logistic reasons and the fact that the Nigerian Security Printing and Minting Plc had capacity issues as regards the printing of the new notes.
Saturday PUNCH had reported that the CBN was considering contracting foreign firms to print the redesigned naira notes as the Mint was unable to meet the demand for the currency, thus leading to the current nationwide scarcity.
It was reported that the Mint had succeeded in printing N500bn worth of the new N1,000, N500 and N200 notes and might not have the capacity to do more than that at the moment, whereas the CBN had withdrawn about N2.1tn of the old notes from circulation.
The apex bank official told Sunday PUNCH that the advice given by the Council of State would be weighed carefully vis-à-vis the security implications of the continued scarcity of the notes, the cost of printing more notes and re-circulating the old ones, and the implementation of the Supreme Court interim order that the old notes should be allowed to circulate alongside the new ones.
However, developments in the last few days have thrown bankers, traders and ordinary Nigerians into confusion regarding the acceptability or otherwise of the old notes as legal tender.
While the Federal Government, through the Attorney-General of the Federation and Minister of Justice, Abubakar Malami (SAN), had indicated that the Supreme Court order would be complied with, he also said it would be appealed.
A manager of a Tier-1 bank, who spoke to one of our correspondents on condition of anonymity, said there was confusion everywhere as the CBN had not given any counter directive to its earlier order that the old notes should not be in circulation again from Friday, February 10, 2023.
The bank manager said, “The whole thing has thrown us into confusion as we don’t know what to do. The last communication we received from the CBN was that we should begin to pay customers a maximum of N20,000 over the counter and that the February 10 deadline for the withdrawal of the old notes stays.
“We have stopped accepting old naira deposits from customers. We stopped on Friday. For instance, we didn’t open today (Saturday) to collect deposits as earlier directed by the central bank. We received an advisory from our zonal head to stop collecting old notes from Friday. Except there is a new directive on Monday, we will not take deposits of old naira notes again.”
Meanwhile, some petrol filling stations in Lagos and Ogun states, on Saturday, rejected the old naira notes from customers and insisted on new notes, transfers and Point of Sale payment only.
A similar situation played out in supermarkets and fast food restaurants, while some traders in different markets rejected the old notes.
Some residents of Abakaliki, Ebonyi State, have urged the Federal Government to, as a matter of urgency, address the nation on the suspension/extension of the deadline for the old naira note swap.
The residents, who spoke to the News Agency of Nigeria in separate interviews on Saturday, said the appeal became imperative due to the rejection of the old naira notes by traders and petrol stations across the state.
The residents, who expressed worry about the development, noted that the refusal by the business community in Abakaliki to accept the old notes amounted to a contravention of the recent Supreme Court ruling suspending the February 10 deadline set by the CBN.
A lawyer, Mr Lawrance Onwe, said Nigerians deserved to know from the government the true position of the naira swap so as to avoid the confusion, chaos and panic the development had generated since the deadline elapsed on Friday.
A civil servant, Mr Silas Nkpuma, said he almost engaged in a brawl with a commercial motorcyclist, who insisted on being paid with a new naira note.
He said, “I hadn’t any new naira notes on me and the man refused a mobile transfer. I was held hostage by the cyclist until a good Samaritan intervened and bailed me out.
“I think the confusion arising from the rejection of the old notes would have been averted if members of the public were properly informed by relevant government agencies.
“The rejection stemmed from apparent ignorance and what is more worrisome is that filling stations and big business organisations started rejecting the old money on Friday.”
Mrs Chika Iteshi, a foodstuffs dealer at the Ophoke-Abba, Kpiri-Kpiri Market, said that she stopped collecting the old naira because okada and keke (tricycle) riders refused to collect it.
Similarly, some residents of Enugu, on Saturday, started rejecting the old naira notes.
NAN investigation showed that many residents, who were still holding the old naira notes, were finding it difficult to spend them.
A resident of Awkunanaw in the Enugu South Local Government Area of the state, Mr George Nweze, said he observed the situation when he gave a bus driver the old N500, which he rejected.
“I was surprised that the driver rejected the old note because I thought he could easily use it to buy fuel. He flatly rejected it,” Nweze said.
A petty trader, Mrs Marta Chukwu, also said that she went to buy provisions with the old naira notes totalling N25,000, but they were rejected by her customer.
Chukwu said her customer declined to collect the notes from her, insisting that he stopped collecting old notes on Friday.
NAN observed that tricycle operators were asking intending passengers if they had new notes before boarding.
Mr John Nwabueze, a civil servant, said he paid old notes to a taxi driver while going to work on Friday, but while returning home in the evening, things had changed.
A tricycle operator, Mr Ejike Ogbodo, said the problem started when an NNPC mega station started refusing old naira notes.
“We queued to buy fuel yesterday at the NNPC mega station and the attendants refused to collect old notes from us; so, we decided not to collect old notes again,” Ogbodo said.
Similarly, the Amalgamated Union of Northern Traders, on Saturday in Sokoto, lauded the directive given by Governor Bello Matawalle of Zamfara State to security agents to arrest anybody who rejected the old naira notes for commercial transactions.
Matawalle was among the governors who dragged the Federal Government to the Supreme Court, seeking a restraining order to stop the naira redesign policy.
The union’s Youth Leader, Alhaji Sanusi Daudu-Nufawa, lauded the directive of the governor to security agents in Zamfara State to closely monitor all trading activities around markets in order to reduce the suffering of the masses.
Daudu-Nufawa noted that the informal economic sector could only be revived if leaders took drastic decisions to effectively make people do transactions with the old and new notes.
He said the effort would further reduce and relieve the pains that ordinary Nigerians were experiencing in the face of scarcity of the old and new naira notes.
He expressed optimism that the circulation of old notes and their gradual replacement with new notes would ease peoples’ sufferings.
Unions threaten strike
The National Union of Banks, Insurance and Financial Institution Employees and the Association of Senior Staff of Banks, Insurance and Financial Institutions have said their members will down tools if they continue to come under attack from angry customers.
The President of NUBIFIE, Anthony Abakpa, said in an interview with Sunday PUNCH, “Nigerians are suffering and bank workers are also the target. Customers are venting their anger on staff members, who are also our members.
“The CBN is the sole regulatory body that supervises banks. So, if it gives certain amounts to Bank A or Bank B, it should be able to supervise them and know which bank is doing the right thing. If nothing is done within a week, I think we will mobilise to shut down.”
Similarly, the President, ASSBIFI, Olusoji Oluwole, said the banks could only disburse to customers the amount of cash made available to them.
Oluwole stated, “The sad thing is that yes, banks are being given money, but banks are not being given enough money to circulate. The banks can only issue out what they have. But coming out to tell an already agitated public that banks are the ones keeping the money creates a lot of worry for us, because what it does is that you’re practically eroding the confidence of people in the banking system and putting the workers in danger, and that is the sad part of it right now.
“Beyond that, I think people just want access to cash, whether it is the newly-designed ones or even the old ones. I’m talking about the N100, N50, and N20 (notes). Let the CBN make them available.
“We’re sure it has them in stock and when they’re doing that, it should bring the ones that are distributable, not the ones that are mutilated. It should be able to do that and, at least, ease the tension a bit.”
No problems – CBN
Meanwhile, the CBN has said that the NSPMC has the capacity and enough materials to produce the required indent of the naira notes.
The apex bank also said that it was working to increase the circulation of the new notes across the country.
The apex bank’s Director of Corporate Communications, Osita Nwasinobi, in a statement dated Friday but released on Saturday, said such reports about the Mint’s capacity to print the required banknotes that were credited to the governor of the bank, Godwin Emefiele, were not true as he was misquoted.
Some news media (not PUNCH) had reported that Emefiele admitted that the Mint did not have enough materials to print the new notes and that accounted for the current scarcity.
Nwasinobi said at no time did the CBN governor make such a statement during his presentation to the National Council of State at its meeting on Friday.
He said, “For the records, what Mr Emefiele told the meeting was that the NSPMC was working on printing all denominations of the naira to meet the transaction needs of Nigerians.
“While the CBN appreciates the concerns shown by all stakeholders about the distribution of the naira, we are alarmed at the extent to which vested interests are attempting to manipulate facts and pit the public against the bank.”
Nwasinobi also said the CBN remained committed to performing its monetary policy functions as stipulated in the CBN Act, 2007 (as amended).
He added, “We also wish to restate that the NSPMC has the capacity and enough materials to produce the required indent of the naira.
“The bank, therefore, wishes to appeal to the public to disregard the said reports and exercise more restraint, even as we work assiduously to increase the circulation of the new notes in the country.”
On a particular voice note trending on the social media alleging that the CBN planned to shut down some banks, particularly in a geopolitical region of the country, the CBN director said there was no such plan and that the claims were illogical and did not comply with the workings of the banking system.
Niger sues FG
The Niger State Government has filed a lawsuit against the Federal Government at the Supreme Court over the naira redesign policy.
A statement by the state Attorney-General and Commissioner for Justice, Nasara Danmallam, on Saturday, said the case with suit number SC/CV/210/2023, was filed on Friday.
The statement said that the state government was seeking an extension of the timeframe given by the CBN for the currency swap and withdrawal from circulation of the old N200, N500 and N1,000, among other reliefs.
The statement said the three months given by the Federal Government for the withdrawal of old notes across the country was not reasonable and was in violation of sections 13, 14 (2) (b), 17 (1) (c) of the 1999 Constitution as amended.
In the affidavit in support of the originating summons, the state government contended that the unavailability of the redesigned notes had caused untold hardship and suffering on residents of the state, especially those living in rural areas.
The statement expressed the state government’s concern about the inconveniences the policy had brought on the people, saying it would continue doing everything within its constitutional limit to ameliorate their suffering.
Economists, lawyers react
A professor of Economics, Cletus Agu, said the issue of naira scarcity was an artificial community-imposed problem fuelled by banks and the people, stating that the Supreme Court ruling was irrelevant.
Agu said, “It is not a central bank problem; rather, it’s a problem stemming from the commercial banks, imposed by the people and politicians. It is not a question of law; it is pure economics. The naira is being sold outside the banks; bank managers are busy selling the money, and people keep withdrawing without depositing. The issue of economics has been turned into politics.
“When there are incessant queues at Automated Teller Machine galleries every day, you know that something is wrong. The money is not circulating; if it did, then there will be ease. People are withdrawing and storing the cash; bank managers are giving it out to politicians and big businessmen. Why are the rich not complaining and it’s only the poor that are feeling the pain?”
According to him, one of the objectives of the CBN is to return money into the system to allow for cash flow, adding that the Supreme Court would not solve any problem by imposing sanctions.
“The Supreme Court shouldn’t have interfered in the issue. What are they trying to achieve? They can only get an extension of five days, after the five days, what next? Let’s wait for the subsequent judgment they will bring up,” he added.
However, a professor of Economics at the Afe Babalola University, Ado-Ekiti, Ekiti State, Samuel Igbatayo, described the implementation of the cashless policy as a ploy to crash the economy.
He stated that the military approach had created chaos across the economy with Nigerians being left stranded and unable to access their money.
Igbatayo noted that though he supported the cashless policy, he believed it needed gradual implementation for minimum impact on the economy.
He said, “It is hardly a surprise that the Supreme Court has ruled in favour of the litigants because it has taken due consideration of the effect on the masses. The scarcity of the new notes and the period in which it is implemented is bad for the economy. It will be worse for those in areas where there are insufficient financial services.
“Most rural areas are devoid of banks/financial services and some residents of those areas don’t have bank accounts. These people have to be taken into account in implementing the policy. While one doesn’t dispute the need for a cashless society or the implementation of the policy, there is a need for a gradual approach to it.
“I think the CBN needs to return to the drawing board to implement the scheme over a fairly long period to ensure a sufficient quantity of the currency in circulation that will support economic activities across the length and breadth of the country. I think that is plausible and I believe the CBN will recognise the potency of its activities and the dangerous nature of them altogether.”
According to him, the naira scarcity coupled with the high fuel prices has brought social instability with riots breaking out all over the place with banks being vandalised and causing untold hardship on Nigerians. He urged the government and policymakers to take all these into account and implement the policy over a sufficient period.
A human rights lawyer and professor of International Law at the University of Jos, Nnamdi Aduba, said the cash withdrawal limit set by the CBN would encourage vote-buying during the general elections.
Speaking in an interview with Sunday PUNCH, Aduba said the policy was counterproductive, adding that the suffering it had inflicted on the people was enough for them to succumb to cheap inducement during the elections.
He noted that politicians would access the cash from the comfort of their homes and would also devise other means to induce voters.
Aduba said, “The CBN and the banks are just out to punish poor Nigerians. I cannot see how you will have a free and fair election under this situation that we have found ourselves. It is not possible because people wake up in the morning now to either go to filling stations or banks to queue for their own hard earned money. Then, you will say people should come out to vote; who will they vote for?
“Who are you preventing from spending this money? There are difficulties in purchasing food, paying transport fares and buying other commodities. If you say it will curb vote-buying, let me ask you, how do you define vote-buying? Is it only about cash?
“Put yourself in the shoes of a poor person; somebody will give you food, and pay for your transportation when the election is a few days away. Tell me, during the election will you vote against that person?
“If they are targeting politicians, they are aware that most of the politicians will stay in their houses and get the currencies; it’s the ordinary Nigerians who go to queue. So, if the policy is intended to get the politicians, then it has not caught anybody.
“So, why the haste? For the past seven years, you didn’t think of this; why are you now in so much haste with this; issuing a deadline that is impossible.”