Again, Buhari meets Emefiele, keeps mum on naira swap
• CBN: Embrace eNaira, internet banking as alternatives to cash
• Apex bank loses N15b to hoarding, explains how to exchange old notes
• BDCs profit from naira scarcity, lower exchange rate for cash transaction
• Ikpeazu worried about cash scarcity on traders in Abia, Commissioner says
• Niger governor orders police to arrest anyone rejecting old notes
As the nation awaits the decision of the Supreme Court tomorrow over the naira redesign policy, President Muhammadu Buhari, yesterday, met with Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, at the Presidential Villa, Abuja.
The CBN governor, who was meeting the President privately for the third time since the naira crisis escalated across the country, did not speak to journalists as he left the Villa.
Also, the reason for the visit was not made known as at the time of filing this report. It was, however, believed to be in connection with finding solution to the cash squeeze experienced across the country.
The raging controversy over implementation of the new currency redesign policy has not subsided.
Last Friday, the Council of State had backed the currency redesign policy, but advised CBN to ensure availability of naira notes to douse tension and ameliorate the suffering of citizens across the country.
On Sunday, the Nigeria Governors’ Forum (NGF) directed Attorney-Generals of the 36 states to join the suit instituted by Kaduna, Kogi and Zamfara states against the Federal Government at the Supreme Court.
However, CBN has asked Nigerians to embrace eNaira and internet banking as alternatives to cash transactions. Speaking at the just concluded 44th Kaduna International Trade Fair, Osita Nwanisobi, director of corporate communications, CBN, said the Nigerian payment system infrastructure could handle the surge in transaction volumes across all payment channels.
The CBN director spoke against the backdrop of the struggle faced by citizens to get naira notes from banking halls and Automated Teller Machines (ATMs). Nwasinobi was represented at the event by Mohammed Abbah, director, capacity development department of CBN.
On the naira redesign policy, he said the initiative was not aimed at any individual as being insinuated in the public domain.
“The CBN Governor has always said the policy is not targeted at anyone or any group of persons, rather, it is derived from the bank’s in-house analysis to strengthen our macroeconomic fundamentals and better our socio-economic conditions,” Nwanisobi said.
“Nigerians will observe that there has been a downward trend in inflation, and the exchange rates have been relatively stable. Furthermore, we aim to increase financial inclusion in the country by reducing the number of the unbanked population.
“Thirdly, our aim is to support the efforts of our security agencies in combating banditry and ransom-taking in Nigeria through this programme.”
He said that there have been reports of occasional transaction failures on alternative payment channels.
“However, we wish to assure you that the Nigerian payment system infrastructure is robust enough to handle the surging transaction volumes across all channels,” Nwanisobi said.
“We, therefore, urge Nigerians to embrace alternative payment channels, such as e-Naira and internet banking, as we embrace the cashless policy.”
Foreign currency traders are profiting from the naira scarcity. For instance, while the dollar trades for about N740 at the black market, dealers with access to new banknotes buy the greenback from Nigerians desperate to be paid in cash at between N500 and N600.
In Abuja, yesterday, The Guardian learnt that some Bureau de Change (BDC) operators were offering as little as N400/$ to customers who insist on cash settlement. This reflects a rising trend in the country.
Merchants and traders are tending towards price discrimination – offering lower prices to cash-backed customers while those who opt for transfer are asked to pay higher.
In some cases, traders simply add the point of sale (PoS) charges, which could be 30 per cent markup, as margins.
The CBN lost N15 billion to hoarding of naira notes in private homes and outside of the banking system, a deputy governor of the apex bank, Folashodun Shonubi, has said.
He disclosed this, in Abuja, while delivering a lecture at the 22nd Fellow conferment lecture of the Nigerian Society of Engineers (NSE), just as he justified the naira redesign policy, saying hoarded or stored cash does not add to economic activity but rather hurts the economy.
Speaking on the intricacies of the naira redesign and its benefit to the country, Shonubi sad Nigeria ranks number 30 in deposit to Gross Domestic Product (GDP) in Africa.
He hinted that while statistics show that over the last five years, the number of banknotes worldwide in circulation rose from five to seven per cent each year, the CBN prints more, yet Nigeria has fewer new notes circulating.
Shonubi also cautioned that the longer currencies are in circulation, the easier it is for counterfeiters to perfect their game.
“The reason currencies are changed periodically is to avoid counterfeiting. The higher denominations are specially exposed to counterfeiting because it takes the same effort to counterfeit N200 and N1,000. So, why would a counterfeiter waste his time on counterfeiting N200 notes when he can get N1,000 notes from exerting the same energy? This is one of the reasons redesigning is very important,” he stated.
He noted that the current series of naira banknotes have been in circulation for between 14 and 19 years, which is inconsistent with best practice and provides an enabling environment for the operation of counterfeiters, saying the standard practice is that currency in circulation should be redesigned after every five to eight years to stay ahead of counterfeiters.
He added: “An in-depth counterfeit scientific analysis by De La Rue conducted in the United Kingdom in June 2022 revealed that the counterfeiters were very professional, producing large volume requiring special ink, foils and equipment. Nigeria may actually have a serious counterfeit threat to her legal tender than revealed by statistics. This is because only 15.29 per cent of the currency in circulation is in the Central Bank and commercial banks’ vault. A currency redesign will address this problem.”
Shonubi stated that the redesigning of N200, N500 and N1,000 notes has seen the return of over N2 trillion back into the banking system.
Another CBN staff, who spoke on the condition of anonymity, said the window for spending old notes is indeed closed following the silence of the Federal Government on the issue, which signals the intention of President Buhari to go on with the redesign policy.
He explained that any Nigerian with old notes can approach any CBN state branch to deposit such with the provision of the name of the depositor, National Identity Number (NIN), Bank Verification Number (BVN) and telephone number.
He stated: “With the Federal Government’s silence on the matter as at this afternoon (Monday), it means the policy has come to stay. But that does not mean old notes are useless. Individuals can still deposit such money in any state branch of CBN. Nigerians should note that there is no exchange of old for new notes over the counter anymore. CBN will also not send the money into any account number. Depositors will be called when the money is ready.”
In the meantime, petrol stations, markets and superstores are now rejecting old notes, causing tension and panic among citizens.
Abia State Commissioner for Trade and Investment, Chief John Okiyi Kalu, has stated that Governor Okezie Ikpeazu is deeply worried about the effect of the new CBN cashless policy and redesigning of naira notes on traders in the state.
Speaking to newsmen in his office in Umuahia, Okiyi said the state government was looking at multiple ways to ease the negative effect of the policies on traders, hence the announcement by the governor that Abia State Board of Internal Revenue Service should immediately suspend collection of 2023 revenue from all markets in the state till June 2023.
According to him, “the governor has visited many markets in the state since the cashless policy came into effect along with the scarcity of new currency notes as a result of the naira redesign, and observed that traders in the state are possibly the worst hit.
“Many of our traders are unable to transact with buyers as the policy implementers failed to capture their peculiar needs while rolling out the new policies.
“The traders are really bearing the brunt, and as a responsible government, we are looking at various options to support them. One of those options is what the governor announced during his visit to Good Morning market, Aba, that, henceforth, state and LGA revenue collections in the markets will be suspended for at least six months starting from January 2023.”
The Commissioner called on banks in the state to immediately deploy a sufficient number of PoS machines to all markets, superstores, and other trading centres in the state to enable buyers utilise their ATM cards for transactions.
He also called on the CBN to ensure that the new notes are made available to traders and citizens in sufficient volume to avoid a breach of the peace and security that might result from the massive suffering occasioned by the new transaction regimes.
Meanwhile, Niger State government has ordered the police and other security agencies in the state to effect the arrest of persons who reject the old naira notes as a means of transaction.
Secretary to the State Government, Ahmed Ibrahim Matane made the disclosure in Minna on Monday. He explained that the old naira notes are still valid and any person caught refusing to collect them for business transactions will be made to face the wrath of the law.
Matane then enjoined people of the state to go about their lawful business and report any person who refused to accept the old naira notes to any of the security agencies in the state for necessary action.
The non-availability of the newly redesigned notes has led to hardship on citizens as business owners refused to collect the old notes, while insisting on the new ones as a means of exchange.
Some residents who spoke to our correspondent, lamented the
Recall that the Niger State government had filed a suit against the Federal Government on the naira redesign policy at the Supreme Court.