Buhari Allays Concerns over Shortage of Naira Notes, Says CBN Working to Eliminate Chaos
*Reiterates policy targeted at hoarders of illicit funds, not businesses, common man
*Declares it will stop counterfeits, corruption, funding of terrorism
*No going back on January 31 deadline, CBN insists
*NBA, Atiku seek policy review, deadline extension
President Muhammadu Buhari yesterday allayed concerns over the Central Bank of Nigeria (CBN) cash swap and the naira redesign project, promising Nigerians that the apex bank was doing everything necessary to ensure that their businesses are not hurt.
Despite the unprecedented pressure being put on the president by some state governors, politicians and lawmakers, including the Speaker of the House of Representatives, Femi Gbajabiamila, who threatened to arrest the CBN Governor, Godwin Emefiele, the president promised Nigerians that the central bank, commercial banks and other stakeholders were doing everything necessary to ensure that the entire supply chain does not experience disruption arising from the currency swap policy.
Last October, the CBN had announced that it would redesign the N200, N500 and N1,000 banknotes with January 31 as the deadline for the return of the old notes to the banks.At the unveiling of the new naira notes at the State House on November 23, 2022, the CBN Governor, Emefiele told journalists that the January 31 deadline was sacrosanct.
But as the deadline draws closer, more pressure has been mounted on the CBN for a review of the policy and the extension of the deadline.But the apex bank yesterday reiterated that there was no going back on the January 31 deadline for old naira notes.The CBN’s insistence came as the presidential candidate of the Peoples Democratic Party (PDP), Atiku Abubakar, Nigerian Bar Association (NBA), the Arewa Consultative Forum (ACF) and Arewa Youths for Development and National Unity (AYDNU) joined the growing list of Nigerians and groups calling for a review of the policy and the extension of the deadline.
Reacting to reports of long queues of people waiting for hours for their turn to deposit old notes and get new ones, which have triggered public anger, President Buhari, in a statement issued yesterday by his spokesman, Mallam Garba Shehu, insisted that the currency swap had also become necessary to prevent counterfeits, corruption, and funding of terrorism.
The statement by the president may have been in reaction to Governor of Kano State, Abdullahi Ganduje, who had written to Buhari, announcing the postponement of the president planned visit to the state, citing complaints by Kano residents over the hardship being faced in getting the new naira notes.Buhari once more declared that the naira design policy of the CBN was targeted at people hoarding illicit funds and not businesses and the common man.He specifically stated that the currency swap which the nation’s apex bank introduced a few months ago, would stabilise and strengthen the economy.The CBN had last year announced that it would redesign the N200, N500 and N1000 banknotes and had fixed a January 31, 2023 deadline for phasing out the old banknotes.
Owing to that, the CBN had introduced the cash swap policy, mostly in rural areas to ease the retirement of the old banknotes.At the unveiling of the new Naira notes at the State House on November 23 2022, the CBN Governor had told journalists that the January deadline remained sacrosanct and that it would not be shifted for any reason, a position he reiterated at last week’s Monetary Policy Committee (MPC) meeting.But as the January 31 deadline for the return of the old naira notes to the banks draws closer, more pressure has been mounted on the CBN for a review of the policy and the extension of the deadline, with the latest coming from the presidential candidate of the Peoples Democratic Party (PDP), Atiku Abubakar, and the Nigerian Bar Association (NBA).
The APC presidential candidate, Bola Tinubu, had also during the week expressed frustration over the policy.However, Buhari yesterday promised that his government would ensure that the citizens were unharmed in their businesses and that no disruption is caused to the entire supply chain arising from the currency swap due to end shortly.While taking note that the poorest section of society were facing hardship as they often keep hard cash at home for various expenses, Buhari gave strong assurances that the government would not leave them to their own fate.
He reiterated that a number of initiatives by the CBN and all commercial banks were underway to speed up distribution of the new notes and do all that is necessary to forestall cash squeeze and chaos.He said the changes on the new banknotes become necessary to prevent counterfeits, corruption, and terrorist funding and also to stabilise and strengthen the economy.
“While taking note that the poorest section of society is facing hardship as they often keep hard cash at home for various expenses, President Buhari gave strong assurances that the government will not leave them to their own fate.“He reiterated that a number of initiatives by the Central Bank and all commercial banks are underway to speed up distribution of the new notes and do all that is necessary to forestall cash squeeze and chaos,” the statement read in part.
Meanwhile, the NBA has written to CBN Governor Emefiele, calling for an urgent review of the naira redesign policy.The NBA, which acknowledged that the policy was laudable as it has the potential to stem corruption, vote buying and other criminal activities, however, called for a review, recalling how the hasty implementation of a similar policy in 1984 by the then military government did not only bring huge financial losses for individuals and businesses, but eventually collapsed the economy and led to the toppling of the administration.The
NBA in the letter dated January 23 and signed by the body’s National President, Mr. Yakubu Maikyau (SAN), raised concerns about current and future challenges surrounding the implementation of the policy.The NBA urged that due considerations and position of the law be followed, insisting that the law allows Nigerians to redeem their old naira notes at the CBN even after the January 31, 2023 deadline.
The association, however, noted that “the necessary logistical, infrastructural and manpower support, required for the successful implementation of the policy are in short supply and should be greatly improved upon if they are to be leveraged for full implementation of the policy with minimal loss or economic hardship.”It noted that there is no information in the public domain as to what would happen to the old currency in possession of Nigerians, by or after January 31, 2023, stating that Section 20 (3) of the CBN Act provides that “notwithstanding sub-sections (1) and (2) of this section, the bank shall have power, if directed to do so by the President and after giving reasonable notice in that behalf, to call in any of its notes or coins on payment of the face value thereof and any note or coin with respect to which a notice has been given under this sub-section, shall, on the expiration of the notice, cease to be legal tender, but, subject to section 22 of this Act, shall be redeemed by the bank upon demand.
”He argued further that “any person who shall be in possession of the old notes, which have ceased to be legal tender by 31 January 2023 is at liberty to approach the CBN and demand for the redemption of the notes and the CBN is under statutory obligation to ‘redeem’ the notes.”Also, the ACF and AYDNU called on the CBN to extend the deadline for currency swap.In separate statements yesterday in Kaduna, both groups said many rural communities would not be able to change the old notes before the January 31 dateline by the apex bank.The ACF in a statement, expressed concern that ordinary people, especially, in the North will lose their hard-earned money, if the dateline is not extended.
The statement signed by its Secretary General, Murtala Aliyu, urged the government to be sensitive to the plight of the citizens to safeguard their interests in all areas.“As the date line for the exchange expires this coming Tuesday, we are afraid that the majority of our people in the rural areas are unable to change their old currencies for the new ones, this is because even in the urban centres, the new notes are scarce,” the statement read.
The forum called Buhari and the CBN, “to as a matter of urgency extend the expiration date of the exercise and improve on the arrangements so as to accommodate everyone with genuine cases.”On its part, the AYDNU said the three months window given for the currency swap was insufficient even if all the variables necessary for a smooth currency change remain constant.Addressing a press conference at the Arewa House, Kaduna, spokesperson of the group, Isa Mohammed, said a large population in rural communities in the North, operating outside the banking system, would be negatively affected if the dateline is not extended.The group appealed to the CBN to reconsider its position on the dateline to ensure the ordinary Nigerians will not suffer losses.