• Old 200 naira notes available for circulation mere N222b • N2.65tr to be destroyed
• Recirculation of N200 notes won’t move the needle, Teriba insists
• Gbajabiamila: Buhari’s directive a wanton disregard for rule of law
• Ganduje alleges plot to scuttle election, install interim government
• Broadcast contemptuous of Supreme Court’s order, Adegboruwa, Ubani fume
• Compel APC leaders to release hoarded naira notes, PDP tells Buhari
• Banks lose N5b to assault on facilities, 17 branches torched
• Telcos distance selves from failed financial transactions
• Buhari’s speech will have dire consequences for 2023 poll, CDD warns
Amid confusion over the state of Central Bank of Nigeria’s (CBN) naira redesign policy, President Muhammadu Buhari, yesterday, weighed in heavily to provide clarity and direction, when he addressed the nation in a broadcast, the first this year, and which may be his last as President before handing over on May 29.
Against what many believe to run contrary to Supreme Court’s order, Buhari in his nationwide broadcast said he had instructed the CBN to reintroduce the old N200 note until April 10, 2023, while the old N500 and N1,000 cease to be legal tender in compliance with the apex bank’s February 10 deadline for cash swap.
Giving reasons his administration decided on the redesign of new currency denominations, Buhari said the need to fight corruption and insecurity headlong, control inflationary trend and curb excessive vote buying, partly necessitated the decision to redesign the currency.
The President also apologised to Nigerians over the difficulty experienced in the implementation of the naira redesign policy.
Despite this latest adjustment, financial data and informed commentary have suggested that the currency squeeze will continue in the meantime. The Chief Executive Officer of Economic Associates, Dr. Ayo Teriba, described the decision to re-circulate N200 notes as a waste of time, saying it will not “move the needle”.
As of December 31, last year, the share of N200 notes in respect of currency in circulation, estimated at N3.23 trillion, was a mere seven per cent. That kneecaps the maximum value of the old notes available for recirculation to N226 billion.
The value is a far cry from the N3.23 trillion currency in circulation as at October when the policy was unveiled, leaving a whopping N2.65 trillion of old N500 and N1,000 notes estimated to be recalled for demonetisation.
According to the currency data, N1,000 notes made up 54 per cent of the currency in circulation, while N500 was 28 per cent, bringing the sum proportion of the two highest currency notes to 82 per cent.
In absolute terms, N1.75 trillion in N1,000 notes and N907 billion in N500 notes have been pulled out of the system.
The total number of new notes CBN said it had ordered as at when the deputy governor in charge of financial stability, Aisha Ahmad, appeared before the House of Representatives, was N500 million or 14 per cent of the circulating N500 and N1,000 before the policy came to effect.
Speaking to the figure, Teriba said the CBN would need to push the equivalent of what it mopped up back into economy before the current crisis can ease. He said a little above N200 billion, the value of the old N200 notes, is a drop in the ocean, considering the need of the economy.
The economist said currency redenomination is the way to go in maintaining the optimal banknotes to avoid waste and achieve efficiency.
He said: “The adoption of e-payments technology has reduced the value of currency in circulation relative to GDP. The declining relative value confirms there is no inflationary threat from cash holding but has been accompanied by a growth in the number of pieces of naira notes in circulation; especially the top two denominations – N1,000 and N500 notes, which are now only worth about two dollars/euros and one dollar/euro, respectively.
“The fact that these are coins in most other climes, suggests that Nigeria is due for another round of redenomination involving the coining of all the existing naira notes and introduction of larger denomination notes from N2,000 (four dollars/euros), N5,000 (10 dollars/euros), N10,000 (20 dollars/euros), and perhaps N20,000 (40 dollars/euros).
“This will result in a desirable decline in the number of pieces of notes in circulation, as the public will waste less time counting notes, and banks will save sorting, storage and transportation costs.”
President Buhari further insists that the cashless policy and naira swap have short and long-term benefits for the country in dealing with insecurity and corruption, but agrees that the apex bank should take the recommendation of a parliamentary committee to rectify identified problems.
His comments came as the CBN Governor, Godwin Emefiele, gave an assurance that N200 notes taken out of circulation will be re-circulated from today.
The President, who spoke at the State House, Abuja, when he received briefing from members of the House of Representatives Ad-hoc Committee on cashless policy, said his speech earlier in the day was comprehensive enough and was adequate as a response to the general outcry about the problems associated with the currency exchange.
Emefiele gave the promise that by end of February, CBN will bring into circulation between N700 and N800 billion, well in excess of what is needed to run the economy, stating emphatically that it is not possible to put back the over N3 trillion retried from circulation if the economy is to be healthy.
Speaker of the House of Representatives, Femi Gbajabiamila, has faulted the decision of the Federal Government to disregard the Supreme Court order on the issue of currency swap.
The apex court had last week given an order for the old notes to remain legal tender pending the determination of a case brought before it by some governors. The apex court had on Wednesday reiterated its order and adjourned the matter to February 22.
In a statement he personally signed in Abuja, yesterday, Gbajabiamila said though the President’s directive was a step in the right direction, the Federal Government could not afford situations that “suggest a wanton disregard for the rule of law.
“It is not to the benefit of our country for the Federal Government to act in ways that suggest a wanton disregard for the rule of law. It will be better for us to strictly adhere to the court’s order in this matter pending the adjudication of the substantive suit,” he said.
Governor of Kano State, Abdullahi Umar Ganduje, has alleged orchestrated plans in some quarters to reinstall interim government in the country.
Besides, Ganduje said the plot, being perfected by elements he did not identify, is to scuttle the elections and subsequently execute the interim arrangement.
Ganduje, who made this known while receiving the Forum of Former Northern Members of Parliament, Northwest zone, wondered why CBN failed to introduce the naira redesigned seven years ago, but did only few months to general elections.
Describing the currency swap as deliberate attempt to incite Nigerians against the ruling party, Ganduje alleged that the CBN Governor was being used to derail democracy.
Ganduje equally alleged betrayal against APC’s presidential candidate, Asiwaju Bola Tinubu, by elements in the country who preferred to pay Tinubu back with evil after same elements enjoyed his support to get to power.
Ganduje said: “He contested and contested again, he didn’t win. We came and supported him and he won. Now, he’s leaving the government but all he’s doing is all efforts to sabotage the party that voted for him, he wants to destroy it,” in a veiled reference to President Buhari.
“This has gone beyond not wanting a particular candidate to win the election, it is democracy they don’t really want. They want to set up an interim government like that of Shonekan,” Ganduje alleged.
BUT the Peoples Democratic Party (PDP) has urged President Buhari to assuage the pain and anguish experienced by Nigerians over the current cash crunch in the country by compelling the ruling All Progressives Congress (APC) and its presidential candidate and governors to immediately release the billions of new notes reportedly intercepted and hoarded by them for vote buying purposes.
PDP, in a statement by its national publicity secretary, Debo Ologunagba, called on President Buhari to put every measure in place to guarantee peaceful, free, fair, transparent and credible 2023 general elections.
Also the party’s presidential candidate, Atiku Abubakar, has charged APC to take full responsibility for the hardship, violence and loss of lives that resulted from the naira redesign policy. He, however, urged Nigerians to avoid violence but direct their anger towards the APC in the presidential election, which holds next Saturday.
Also, he charged security agencies to arrest and prosecute persons promoting anti-naira redesign policy violence.
Atiku, in a statement he personally signed, noted that although “this crisis may be coming on the heels of the currency swap, it is pertinent to remind us that it is a culmination of the frustrations of Nigerians arising from the maladministration of the ruling APC in the past seven years.”
However, the Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI) has revealed that banks have lost the sum of N5 billion across the nation, following recent attacks and destruction of bank facilities.
President of ASSBIFI, Oluwole Olusoji, disclosed this, on Thursday, at a news conference in Lagos. He said aside from bank buildings burnt and Automated Teller Machines (ATMs) destroyed, bank officials were also affected.
Olusoji added that 17 bank branches have been attacked so far. It will be recalled that some commercial institutions were destroyed by protesters across the country following the scarcity of naira notes.
He said: “Notwithstanding the insecurity due to the destruction of business premises within the banking industry and the impact on insurance organisations, we remain committed to go the extra mile in providing service to our customers in safe and secure environments.
“However, we value the lives of our members and colleagues and will not put them at any further risk. We have, therefore, put them on alert and shall instruct them without further warning to immediately stay away from their branches if these attacks on our members and facilities continue until such a time that they can be guaranteed of their personal safety and the security of their workplaces by the relevant authorities.”
Following the increase in failed financial transactions currently being experienced by bank customers, the telecom operators (Telcos), whose infrastructure banks rely on to provide financial services to customers, have distance themselves from failed transactions.
The Telcos are blaming the situation on the inability of mobile apps, provided by the banks, to absorb the sudden pressure from customers who have switched from other payment channels to mobile banking because ATMs are no longer dispensing cash as they should.
Chairman, Association of Licensed Telecom Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, who exonerated the Telcos from failed financial transactions, said the Telcos do not have control over what happens between banks and customers during financial transactions, because the Telcos only provide the pipe that relays the financial transactions.
“What happens at the interconnectivity end of the financial transaction is not under the control of the telecom operators, whose infrastructure, the banks are using to provide digital financial services to their customers. All other online applications like Unstructured Supplementary Service Data (USSD), e-Commerce, website and internet browsing, are working perfectly, except for mobile apps used for financial transactions, which I think, is as a result of increased volume of transactions on the mobile apps of banks,” Adebayo said.
He added that the banks need to build more capacity and strengthen their applications to make the apps resilient enough to accommodate the pressure.”
But the Executive Secretary, Information Technology Systems and Security Professionals (ITSSP), an interest group of the Nigeria Computer Society (NCS), Mr. Rogba Adeoye, has blamed the situation on mass exodus of bank staff who are relocating abroad for fear of the dwindling economic situation of the country.
According to Adeoye, there is pressure on the transaction channels because of increased volume of traffic on few of the channels like the mobile app channel.
“The transactions are failing on a daily basis because the experts that were supposed to manage the backend transactions have all relocated, leaving the few remaining inexperienced technical staff to manage the situation. Outsourcing the transaction operations of the bank could have been the ideal thing to do, but banks cannot outsource a critical aspect of their operations because it has to do with public funds.
“Again, the bank staff that programmed the ATMs to dispense only N500 and N1,000 notes have relocated to other countries and the banks are finding it extremely difficult to programme their ATMs to dispense N50 and N100 that are not affected by the CBN redesign policy,” Adeoye said.
He, therefore, called on government to hold stakeholders’ emergency meeting on electronic transactions.
MORE reactions trailed President Buhari’s broadcast yesterday with human rights lawyers, Ebun-Olu Adegboruwa (SAN) and Dr. Monday Ubani, saying the President, through his broadcast, was in contempt of the Supreme Court order that says old notes remain a legal tender.
Reacting, Adegboruwa said the President cannot overrule the Supreme Court as there is separation of powers in a democracy.
He said: “Under Section 235 of the 1999 Constitution, the Supreme Court is the final authority in legal pronouncements in Nigeria.
“Under section 287(1) of the Constitution, the President is statutorily obliged to obey, enforce and give effect to the decision of the Supreme Court. Section 287(1) of the 1999 Constitution.
“The broadcast is sad for our democracy. Since he already admitted that the matter is subjudice, the President should not have proceeded to vary the order of the Supreme Court.
“The president and indeed the executive should not give the impression that citizens can brazenly disregard lawful orders of any court, as that will only encourage anarchy and lawlessness.
“It amounts to executive rascality and brazen disregard and contempt of the Supreme Court, for the President to separate the denomination of the old notes for legality. It is not open to the President to choose, which portion of the order of the Supreme Court that will be obeyed.
“The President should reverse his directive and add the N500 and N1,000 old notes, failing which the Supreme Court should overrule the directive of the President on February 22 when the case comes up.”
Also, Ubani said the development was a bad precedent and shows the level of respect the current administration has for court orders.
He said: “There was an interim order, which says there should be a stay of action until all grievances are looked at because unfortunately many other states are joining the suit, and the Supreme Court saw the wisdom in giving room for other parties to join so that there will proper parties before it goes ahead to look at the issues on its merit, that was why there was an adjournment on Wednesday.
“But unfortunately, what the President has done is ignore whatever is going on at the Supreme Court. I am not too happy with what has happened in terms of the President overruling the Supreme Court. We are not telling the world that we are practicing democracy. It is not a proper precedent.
“If you cannot obey your court orders, how do you instill confidence in the international community to come into your country to make investments? In case there is any dispute, can there be a decision of the court that can be complied with within your country? We are not sending the right signal.”
The convener, Yoruba Professionals Foundation (YPF), Maxwell Adeleye, on Thursday, chided President Buhari’s broadcast on the currency crisis. He said for the President to disregard the Supreme Court order, he is running Nigeria like a State of Nature.
“Let me say very expressly that I am in support of the policy in principle, but its implementation has been very abysmal. Hence, the furore from several stakeholders, including governors and other well-meaning Nigerians.
“The last straw that broke the camel’s back is that after all the twists and turns, Mr. President finally took a stance on the pronouncement of Supreme Court on the ongoing imbroglio without minding whose ox is gored.
“President Buhari has chosen to disregard the apex court order that status quo be maintained pending determination of motion on notice in respect of the suit instituted by some states.
“For disregarding the Supreme Court order, I want to say without any fear that President Buhari is now running Nigeria like a State of Nature. The fact is, either forged or manufactured, a court order, especially the one granted by the Supreme Court is meant to be obeyed without any objection.”
Also, the Centre for Democracy and Development (CDD) has said President Buhari flouted the principles of separation of power in his broadcast. The organisation warned that the President’s decision would have dire consequences for the elections.
CDD director, Idayat Hassan, said the President’s decision amounts to a flagrant disobedience and violation of the orders of the highest court in the land for him (president) to carry on as if the ruling of the Supreme Court is of no effect.
She stated: “CDD is convinced that this is an egregious affront on the rule of law, and the principle of separation of powers. In a constitutional democracy, which is anchored on the rule of law and separation of powers, the President’s action amounts to an unconstitutional power grab, which degrades our democracy.
“President Buhari’s decision has dire consequences for the 2023 general elections, which are less than 10 days away. Observers from all over the world are in Nigeria to witness the elections and report on the growth of the Nigerian democracy. This flagrant side-stepping of the Supreme Court’s decision does no good for our nation, the elections and the democracy we have collectively nurtured over the last 23 years. ”
