The Governor of the Central Bank on Sunday January 29, 2023 announced via a press conference the extension of the deadline for the currency change exercise from January 31, 2023 to February 10, 2023. And in keeping with the CBN Act those in possession of the old notes will be allowed to deposit such with the banks for up to seven days after the old notes ceased to be legal tender.
The extension of deadline was expected because it has never happened in our history that we had any deadline no matter for what purpose that was never extended. What readily comes to mind in this connection are the several deadlines often given for banks to recapitalize. The record is that such deadlines suffered multiple extensions. But the question to ask is whether it really should be so? What is the experience elsewhere particularly with developed countries? I will be very surprised, it the experience is the same. But what one would expect is that where deadlines are not extended, that the due diligence would be thorough. Before the deadline is issued that the process must have been properly thought through. As we make progress, we would also prefer for that to be the case here.
But in my experience I have never seen anything that was vehemently opposed like the deadline for this currency change. And the reasons are not far-fetched. With the announcement of currency change those who have perfected strategies to buy votes for the upcoming elections were caught with their pants down. What was before now whispered as one of the likely reasons for the currency change has now appeared to be confirmed as a major driver for the currency change exercise. President Buhari would want to disempower those who have stockpiled currency outside the system to buy votes and it seems he is succeeding. And most certainly, it is in our collective best interest for that to happen as the preference for Nigeria at the precipice today is for leadership with Character, Competence and Courage.
President Buhari might not know who will succeed him but he has no doubt in his mind with regard to those who he is determined not to allow to succeed him. If you ask me that is statesmanlike. He could have simply been a loyal party person by supporting whomsoever his party has thrown up. But he is concerned because he is worried about the future of Nigeria.
Some might ask what he did to justify such disposition in his almost eight years in office particularly upon his takeoff when he took almost one year to put a cabinet in place. Well, there is some point here which we would for now prefer to defer to another time. In furtherance to this observation, his administration has not proven Lame duck at all. It is working as if it has all the time ahead of it. And really in my opinion, such a stance is deserving of commendation. If you look at Budget 2023 and all the efforts that have been put into its preparation, you cannot but appreciate the fact that the President is working in the understanding that Nigeria can no longer afford the luxury of wasted time.
Q: The money outside the banks has been drastically reduced that what is now left outside the banks is 900 billion Naira as opposed to over 2.7 trillion Naira hitherto
And as we discuss this laudable posture let me seize this opportunity to address the issue of the Ways and Means Finance. This is another area where the President is being magnanimous. He could simply have kept quiet and after he left the scene, we may begin to discuss that outstanding issue.
It remains a fact that the extant laws guiding this aspect of operation has been breached over the years which explains why the outstanding in this connection is over 23 trillion Naira. But we must bear in mind that this outstanding has been included as part of our debt stock and the push to securitize this aspect of our debt is an attempt to contribute to the solution of the country’s debt overhang. As we have been told, if this attempt is not approved, it will add over one trillion Naira to our debt stock next year.
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What compatriots must appreciate as we have this conversation is that if the CBN that is a lender of last resort to the government did not extend this accommodation, we could have ended with a crises on our hands. Spare a thought about what could have happened if government was not able to pay salaries! We end up with veritable crisis on our hands. So, the lesser evil is to worry about its inflationary implications but we have bought peace. Also is it possible for the CBN to refuse the extend the accommodation when it also appreciates the crisis situation in hand as partners in progress with the fiscal authorities?
My appeal to the Senate is to simply approve the restructuring. All the talk about details of what it was spent on is shadow chasing. Details of monies that was spent years ago! What purpose will that serve? Please approval should be given promptly so that this matter will be resolved and put behind us! In any case there is no value whatsoever to achieve otherwise. This 9th Senate has its reputation with regard to approvals already entrenched. No last minute grandstanding is about to change anything.
Let’s for a moment consider some of the reactions that we saw over the deadline for the currency change. The social media was agog with all manner of fake news and most were ready to lap it all without any thoughts. The Governor was supposed to be staying oversees refusing to return beyond the time he was allowed because he was afraid of arrest upon his return. Therefore, he is on the run! How come when the currency change we were told had the President’s approval?
The Department of State Security had surreptitiously gone to court for warrant of arrest because the Governor had been accused of financing terrorism! The Governor was said to be running a secret parallel Foreign Exchange account where he has lodged humongous dollars that was claimed to be Covid 19 relief sent by IMF to Nigeria in this era of open communications. There is also staggering amount said to be proceeds from stamp duties which the Governor and his cronies were supposed to have embezzled. And for comic relief they recruited Kazuare who is more or less a clown to be mouthing all manner of inanities! DSS was alleged to have taken over the Governor’s office. There were alleged protests in Abuja for and against the Governor. It has just been reported also that Niger Delta militants have cautioned that the Governor must not be harmed.
The National Assembly has threatened to issue a warrant of arrest for the Governor, his deputies and bank managing directors who have failed to respond to its invitation. You can begin to appreciate what is at stake. Large sums of money about to be demonetized and the Governor’s blood is at stake. But often we don’t remember that peoples all over the world are following these developments and must be wondering what is happen here. We simply succeed in making ourselves veritable laughing stock! Some say that Governor is lucky to have the Chief of Defense Staff Lucky Irabor who is from the same town as the Governor as the saving grace. Otherwise, it is alleged that by now the story could have been entirely different.
As we have been informed the exercise has achieved 75% success. The money outside the banks has been drastically reduced that what is now left outside the banks is 900 billion Naira as opposed to over 2.7 trillion Naira hitherto. The CBN has taken commendable steps as it has recruited 30,000 super Agents to do currency swaps for Nigerians in outlying districts where banking services are not available to ensure that they are not in any way deprived. It is a good step that the EFCC and ICPC have joined in the monitoring exercise to checkmate Branch managers who might be inclined to sabotage the process for their personal gains. Hitherto the Central Bank made statements which were not borne out in reality leaving a majority of us asking what is happening here.
When Nigerians complain that the new notes are not available, they must be reminded that the CBN is not expected to print the exact amount of money in circulation. We are simply expected to pay cash in our possession into our bank accounts and thereafter embrace cashless approaches to our transactions. My take is that those in legitimate possession of money outside the banks should not be allowed to suffer any loss. But those who have criminally accumulated cash outside should bear the full brunt of this policy.
We would like to change the narrative regarding our elections. It must no longer be for money bags. Henceforth we must criminalize vote buying. If we do not succeed in doing so, we will be afflicted with the cankerworm of corruption for the foreseeable future thereby postponing the realization of our developmental potentials as a Nation.
All said and done, this policy has already succeeded beyond one’s wildest expectations from the perspectives of the drastic reduction of the quantum of currency in circulation outside the banking system and to that extent should impact positively the efficacy of monetary policy. Nigerians must appreciate the fact that in the light of current scenario, that no further extensions should be expected and therefore all are better advised to act timeously.