The presidency yesterday disclosed that neither the federal government nor the Central Bank of Nigeria (CBN) had taken a pre-emptive position on the legality of the old N200, N500 and N1,000 notes in view of the case pending before the Supreme Court, which comes up for hearing today.
In a statement by its spokesperson, Mallam Garba Shehu, the presidency said the federal government's position on the currency swap would be made public after the determination of the suit.
The statement said, "Following series of enquiries, we wish to state that it is not true that the federal government or the CBN has taken a pre-emptive action on the legality of currency as a legal tender in view of the pendency of the case before the Supreme Court.
"The position of the government and the CBN will be made known upon the determination of the suit coming up Wednesday."
The Supreme Court had in a ruling on February 8 suspended the CBN's February 10 deadline to stop the use of old currency notes. The bank had ordered citizens to swap out old N1, 000, N500, and N200 banknotes for a redesigned currency by the deadline. But the apex court, ruling in an ex parte application by three states - Zamfara, Kogi and Kaduna - stopped the CBN from banning the old notes pending the hearing and determination of the case. It fixed February 15 for hearing.
Governor of CBN, Mr. Godwin Emefiele, yesterday, said the apex bank had noticed that some politicians were buying the new N200, N500 and N1, 000 for political purposes.
That was as a coalition of 472 civil society organisations (CSOs) alleged yesterday at a press conference in Abuja that 10 state governors were mopping up the new naira notes in circulation in order to discredit the policy.
Addressing the diplomatic community in Abuja, the CBN governor craved the support and understanding of the foreign missions and Nigerians, in general, towards the implementation of the cashless policy and in achieving the overall objectives of the naira redesign programme.
"The CBN has also noticed that some politicians are buying the new notes and storing them for political purposes," he said.
Emefiele said the principal aim of the currency redesign initiative was to make monetary policy decisions more effective, adding that inflation has been trending downwards while the exchange rate has recorded some stability since the implementation of the policy.
He said the apex bank remained committed to ensuring a seamless, inclusive, and equitable implementation of the exercise for the overall benefit and growth of Nigerians, the financial system, and the economy as a whole.
He also said the programme sought to increase financial inclusion in the country by reducing the number of the unbanked population.
Emefiele noted that there had been five reversals in the bank's attempt to go cashless and promote financial inclusion since 2014, when he was first appointed CBN governor. He explained that the reversals were born out of the need to deepen the country's payment infrastructure, adding that the payment system in Nigeria is now among the best six in the world.
He said, "So, we believe that we have put in place enough infrastructure that would help us attain or achieve a cashless policy that will be in line with global practices."
The CBN governor told his audience, "You are all foreign dignitaries representing your countries in Nigeria and you know and you would agree that the level at which people carry cash in Nigeria is unacceptable.
"In your countries, you do not carry cash anyhow. If you carry cash and you are seen, you are questioned and profiled continuously."
He added, "We want to look at your country and that is why we are saying that Nigeria, being the largest economy in Africa and with the largest population in Africa, really must go cashless. And we are delighted at the CBN that with the support of President Muhammadu Buhari, we would achieve this.
"We know that at these initial stages, Nigerians will go through what we call temporary pains and we call it transient because they would come with those kinds of shocks; indeed, I must describe this shock as unprecedented.
"And that is why I would continue to appeal to everybody - Nigerians and those of you that constitute our diplomatic community - to give us all the needed support for us to achieve this objective. We want our country to look like your country and we will continue to seek your support for us to be like you."
The central bank governor further stressed that the cashless and currency redesign progamme sought to support efforts of the security agencies in combating banditry and ransom-taking in Nigeria. He pointed out that through the redesign, "The military are making good progress in this important task."
Specifically, Emefiele said the naira redesign policy was expected to curb inflation in the market, as less cash holding reduces currency outside banks and retards money circulation.
He said the accompanying decline in money supply would slow the pace of inflation, adding, "We have started to see inflation trending downwards following general price stability in almost all genre of market, including for goods and financial products."
Emefiele also said the effective implementation of the policy could scrap four percentage points off the current level of inflation, which stood at 21.34 per cent, as it steadily slowed inflation rate to about 18 per cent by mid-2023.
He said, "This is quite achievable, as data from our market sources indicate that the prices of grains and key staples, around Suleja and Lambata markets, for instance, have generally been on the downward trend since the beginning of the policy.
"The price for soya beans has dropped from N30,000 to N22,000. Maize from N18,000 to N16,000. The price of a bull fell from N400,000 to N330,000 and ram from N75,000 to N50,000."
He also said the policy had brought some stability to the exchange rate regime, and explained that prior to the announcement of the policy, the huge cash haul outside the banking system had exerted significant pressures on the exchange rate at all windows, but more so at the parallel market as it engendered asset substitution by speculators, and rent-seekers.
Emefiele said, "While the policy was initially estimated to lead to more speculations due to panic moves, as most people try to understand the policy action, it is expected to reduce speculation in the medium- to long-run.
"Today, the limited circulation of the new naira notes has forced the hands of speculators and we are beginning to witness some stability. The initial pressure is projected to further moderate as the implementation of the policy takes-off and a wider understanding pervades the system."
Emefiele said the central bank was mindful of the challenges citizens faced and was currently addressing them.
He noted, "There have been reports of occasional failures in e-channel platforms. Our monitoring suggests that whilst there has been an expected surge in electronic transactions, these have not risen to unprecedented levels and the payment system is well equipped to handle even higher transaction volumes.
"Whilst transaction failures are bound to occasionally occur, the public is encouraged to have full confidence in Nigeria's globally recognised payment system infrastructure.
"Banks have also been instructed to ensure 24/7 service availability and promptly address any customer refunds arising from such service failures."
The CBN governor further acknowledged the widespread inconveniences due to the policy.
He said, "We have observed pervasive incidences of hoarding and predatory activities of some vendors and unscrupulous Nigerians. The principal causes of the hardship to the citizens following the redesign policy include hoarding.
"We have noticed that some members of the public are hoarding the new notes, thereby restricting their flow through the economy.
"Cash kept at home will not circulate but may fuel a perception of scarcity, which leads to higher demand for the currency, signalling to those who don't have an urgent or immediate need to store cash."
Emefiele pointed out that there had been tremendous tension and elevated agitation by leaders who should be calming frayed nerves among the citizens.
However, he said, "We believe that a large proportion of these agitations are staged and sponsored propagandas or an exaggeration of the reality. No doubt that there are pockets of pressures in some areas, the CBN is working hard to shift resources to those areas in order to ease the tension.
"The situation is substantially calming down since the commencement of the Over-the-Counter payments to compliment ATM disbursements and the use of super agents."
On the panic queues at bank ATMs and banking halls, he said "Whilst some of these withdrawal requests are genuine, some are simply the reprehensible activities of miscreants who do not have the genuine intention of making a withdrawal but are seeking quick-earnings by queuing up just to sell their spaces to make money."
Emefiele alleged, "We have also noticed that some Nigerians are capitalising on the transition to charge exorbitant fees or demand cash payment on the false pretext that PoS don't work, especially at petrol stations. These selfish actions for personal monetary gain are creating hardship for Nigerians and may come at the expense of fellow citizens' lives and livelihood."
Emefiele reiterated the availability of an appropriate amount of the redesigned N200, N500, and N1,000 denominations and current N100, N50, N20, N10 and N5 denominations to support economic activities. He said the bank was collaborating with the entire financial ecosystem, including DMBs, OFIs, MMOs, Super Agents, MFBs Payment System Providers, and EFCC, ICPC and other law enforcement to ensure that Nigerians had a variety of options for financial transactions either through electronic channels or in exceptional circumstances, cash.
He stated, "We tried as much as possible to make this available in a way that it goes out to all Nigerians. But we found the unscrupulous activities by some people - and I will not be too direct - but, of course, when people who don't own bank accountants begin to go and stay in queues; they wake up 4 a.m. to go and stay in the queue for the ATM and then, when it gets to their turn, they sell their turn and go back and start queuing again.
"And in a day, they could do that four times and then earn between N8,000 to N10,000... POS agents who are to help us deepen financial inclusion are getting involved in this kind of unscrupulous activities."
The CBN governor stressed, "We have told EFCC, ICPC working with our CBN monitoring team to arrest any POS agent that charges any fee because we have made it clear that whatever is their fee which is not meant to be more than N200 for any amount you exchange, that we CBN we will pay as part of the cost to lessen the burden of this problem.
"And let me make it clear, we started to arrest them and we will prosecute them; they'll go to jail for getting involved in illegal activities and making our work difficult.
"We are trying to make things good for our country, we cannot allow even some of our countrymen who want to get involved in illegal and illicit kind of businesses to truncate our efforts in making the country a good place. They will be arrested.
"We have seen videos of people who are also stamping money on people in parties and we have said that it is illegal; it is there in our law that it is illegal to stamp money and those who have been caught - they will go to jail because we need to do things right as a country. They have to go to jail so that can set example that we must be law abiding citizens in our country.
"We should not take advantage of situations to create pain for people who generally want to conduct economic activity in the country."
Governors Mopping Up New Notes, CSOs Allege
A coalition of 472 civil society organisations (CSOs) alleged that 10 governors were mopping up the new naira notes in circulation in order to discredit the policy. National Convener of the Coalition under the aegis of Council of Civil Society Organisations, Obed Okwukwe, stated this at a world press conference.
Okwukwe alleged that the state chief executives he described as "G-10 Governors," were determined to undermine all constitutional means of achieving the policy aimed at sanitising the economy. He said the group had uncovered a plot by the 10 governors to make Nigeria ungovernable if the policy was not reversed.
Okwukwe said, "These governors are mopping up the money and stopping it from circulation. The CBN had announced that it deployed N300 billion in cash as the first tranche of cash it disbursed.
"We all can agree that the money was hijacked and did not trickle down to the people and the people who took hold of it from the commercial banks have not brought it out to circulate.
"They are withholding the money using various means, including deploying agents, who use multiple ATM cards to withdraw the money, colluding with their banker agents to continue to trap the moneys in the banks and buying off cash from business places that ordinarily make huge cash transactions, like petrol stations, supermarkets and departmental stores.
"This has made some of these businesses insist on only cash payment as the profit they make from the sales of the naira covers for the loss of business from those who do not have the cash to pay."
He alleged that the governors who approached the Supreme Court against the currency redesign policy did so without the love of their people.
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Part of the text of the speech Okwukwe delivered read, "Since the implementation of the new naira policy, Nigerians and, indeed, the system have started seeing the gains.
"Except for the hitches of the unavailability of cash, particularly for small businesses, which is caused by sabotage from those who do not want the policy so they can continue with their illicit trade, other major indicators show that the impact of the policy on our economy is quite positive.
"Also on security, the impact is being felt, as kidnappers now know that there is no cash to pay for ransom. On our electoral process, it is now obvious to Nigerians that it is only the vote buyers that are complaining.
"This policy is facing a syndicated attack from a group of governors who we have termed the G10 Governors. These governors have vowed that this policy will not see the light of day."
He added, "They are willing to go the extra mile, including making our country ungovernable and undermining constitutional governance and bring the entire country to a halt, all for their own reasons, which are selfish.
"Money moves in cycles. Banks pay out money and money is paid into banks. That is how cash circulates in an economy. So do we not wonder why banks pay out money and the money is not paid back into the bank?"
Okwukwe further said, "We have uncovered a grand plot, I repeat, we have uncovered a grand plot by 10 governors who have resolved to make Nigeria ungovernable for President Muhammadu Buhari if he refuses to reverse the new naira policy.
"It is amazing to note that the governors behind this plot were the same governors a couple of years ago who took advantage of every opportunity to praise President Muhammadu Buhari to high heavens.
"However, obviously, because the second tenure is coming to an end, these governors now believe that the president is not deserving of their respect.
"That is quite hypocritical. It means all they were showing the president was sycophantic solidarity, hence, we must, therefore, remind them at this point in time that President Muhammadu Buhari is and still remains the President and Commander in Chief of the Armed Forces of the Federal Republic of Nigeria until the 29th May, 2023 and not one day before."
Meanwhile, supporters of the new currency policy, who embarked on a peaceful street protest yesterday in Abuja came under heavy attack by thugs and street urchins.
The Civil Society Organisations Central Coordinating Council, which is the apex organ of all civil society organisations in the country, briefed the press before embarking on their march. They had set out to march to the office of the Attorney General of the Federation before they were attacked.
Their attackers were wielding machetes, sticks, iron rods, charms and other dangerous weapons. The attack left many injured while the whereabouts of some of their leaders remained unknown at press time.
One of the peaceful protesters, who spoke to journalists, Audu Emmanuel, said, "They just came out from nowhere and attacked our peaceful march. They were hitting everyone in sight, snatching phones, bags and everything they could lay their filthy hands on especially from the women."
