All issues relating to the newly designed currency should be resolved quickly
Following a meeting with President Muhammadu Buhari at his country home in Daura, Katsina State last Sunday, Central Bank of Nigeria (CBN) Governor Godwin Emefiele announced a 10-day extension of the deadline for the use of old naira notes across the country. “Aside from those holding illicit, stolen Naira in their homes for speculative purposes, we do aim to give all Nigerians that have Naira legitimately earned the opportunity to deposit their monies at the CBN for exchange,” Emefiele said while explaining the rationale for the policy option that continues to generate controversy.
While we commend the idea of extension to give more Nigerians the opportunity to exchange their old notes for the new, we hope the CBN has learnt sufficient lessons in the past few weeks. Public policy is not just about having the power or authorisation to do something, especially if the goal is about achieving the desired purpose and limiting unforeseen adverse consequences. It also takes a lot of planning and monitoring. As important as it may be for the apex bank to checkmate the antics of speculators, that should not be done at the expense of the ordinary people who are now suffering from systemic inadequacies.
Section 19 of the CBN Act 2007 empowers the apex bank to issue the national currencies in “such forms and designs and bear such devices as shall be approved by the President on the recommendation of the Board.” However, as we argued when the policy was announced, proper political management demands a necessary synchrony of purpose between and among critical stakeholders, especially for a policy of great strategic public consequence as this. Irrespective of what the enabling act says, horizontal and vertical engagements ought to precede or follow the announcement by the CBN.
Although global best practice is for central banks to redesign, produce and circulate new local legal tender every five to eight years, the Naira has not been redesigned in the last 20 years. And to that extent, there is nothing wrong with the idea. But older generation of Nigerians who were around during a similar redesign of currency notes in 1984, incidentally when President Muhammadu Buhari was a military head of state, have unpleasant memories to recall. With reports of economic and social disruptions from implementing the policy in recent weeks, not a few of them are now drawing unpleasant parallels with the past.
The times may have changed with the introduction of technology, but glitches in online banking and platforms, including Point of Sales’ (PoS) machines, have added to the woes of ordinary people. Yet, decisions that affect every Naira in people’s pocket are a matter of grave public interest. When such a decision creates dissension among those it is meant to serve, there is a problem. Such is the level of desperation that in some states in the North, traders have opted for the CFA franc as their means of exchange while in banking halls across the country, customers now stage all kinds of drama.
On Tuesday, Emefiele led his team to the House of Representatives to engage the lawmakers where he reiterated that in line with the provision of Section 20(3) of the CBN Act, Nigerians would have the opportunity to redeem the face value of the naira only at the apex bank, after the currency had lost its legal tender status, subject to meeting certain conditions. We endorse the position that would ensure that innocent Nigerians are not made to lose their savings. But the challenges keep mounting.
We hope that Emefiele and his team will do everything within their power to ensure that all the issues impinging the CBN Naira redesign policy are quickly resolved.