Cash Crunch Godwin Emefiele Holds Nigerians to Ransom
Godwin Emefiele. CBN Gov

Cash Crunch: Godwin Emefiele Holds Nigerians to Ransom

Nigerian and various groups have expressed displeasure over the continuous scarcity of Nigerian naira across the country, a development that has crippled economic activities, forcing locals to discount their deposits to obtain cash from various sources possible.

The Naira redesign policy and subsequent development have exposed the underlying intention of Nigeria’s monetary policy chief Godwin Emefiele. The policy has spooked the market and triggered social unrest and Emefiele remains unfazed by the development.

The failing naira policy has triggered scarcity in a cash-driven economy.  At the same time, Nigerians have been suffering from using banks, and other financial technology platforms for conducting transactions. 

The cash crunch has crippled activities across the rural market, even while the apex bank is aware of a large number of unbanked citizens will be affected. Recall that the Supreme Court rules that old naira should remain legal tender till December 2023. Apparently, the order did not go down well with Godwin Emefiele-led Central Bank of Nigeria.

Many Nigerian critics have often said Emefiele is trying to settle political score followings his failed ambition to obtain a ticket to contest for 2023 presidential election. In compliance with the Supreme Court made order, the final decision to allow Nigerians to begin to spend the old currency lies with President Muhammadu Buhari and the CBN.

Unfortunately, both have remained quiet while local banks maintained that they cannot collect old naira until there is a circular to that effect. Nigerians are finding it difficult to breathe in the market as Naira-swap has induced fresh upward price increases on basic goods and services.

Analysts said the new naira redesign policy is good for Nigerians due to the fact that large sums are outside the banking system. The inability of the authority to track these funds creates an opportunity for terrorism financing and a run in the foreign exchange market.

The naira redesign policy has been exposed to political influence, driven by the inability of the CBN to meet demand for new naira notes – a development considered as very unimpressive on the part of the monetary authority.

In its various sovereign ratings, Moody’s ratings always cites the lack of capacity to implement strategic reforms as part of the problem Nigeria has. The naira redesign policy, as noble as it was at the beginning has some lacuna.

The noted gap in design and implementation has been seen as a vendetta by the CBN Governor against certain politicians. MarketForces Africa gathered that it is not difficult for the apex bank to trace the money to any individual given the level of resources at its becks and beckon.

Reacting to the development, the Secretary General of Arewa Consultative Forum in a statement on Sunday, said the Naira redesign policy has led to runaway inflation in food and other commodities.

Some days ago, the Supreme Court of Nigeria held that the President, Muhammadu Buhari, breached the Constitution of Nigeria in the way he issued a directive to the CBN for the redesign of the Naira without consulting with the National Council of States and the Federal Executive Council.

It went further to rule that the unconstitutional use of powers by the President on the Naira redesign has breached the fundamental rights of Nigerian citizens in various ways. The state government backed some notable politicians and the citizen are on the same page for the first time in a decade over national issues.

The state Governors have persistently argued that the policy which permitted the CBN to place an embargo on the circulation of old N500 and N1,000 Naira notes while not providing their replacement in sufficient amounts, had triggered severe cash shortages and chaos in the economy.

It has led to runaway inflation in food and other commodities, according to Arewa Consultative Forum spokesperson. Huge crowds and long queues form around bank offices and ATM points across the country as people struggle to get the new cash which has remained extremely scarce. It has triggered riots and other forms of civil unrest.

“The current approach of the CBN”, argued the state Governors, “raises concerns about the respect for the civil liberties and rights of Nigerians as it relates to their freedom to use legitimately earned income as they so wish”.

They believe that the CBN is in truth pursuing a policy of “Naira-Confiscation” which would possibly set off a crippling depression

Elsewhere, some state governments are planning to initiate contempt proceedings against the federal government and the CBN over their non-compliance with the Supreme Court judgment on the naira redesign policy.

Both formal and informal business owners are refusing to accept the old naira notes in anticipation of official approval from the CBN or President Muhammadu Buhari. Naira Steadies as Banks Issue Update on FX Purchase

On Friday, the governments of Kaduna, Kogi, Zamfara, Ondo, Ekiti, Katsina, Ogun, Cross River, Lagos and Sokoto states served Abubakar Malami, attorney-general of the federation, the enrolled order and certified true copy (CTC) of the supreme court judgement.

Abdulhakeem Mustapha, counsel for Kaduna, Kogi and Zamfara states, said that he expected immediate compliance with the judgment as the non-service of the documents had given the government and the CBN an escape route.

“The Attorney-General of the Federation has been served now and we will take it up from there; if there is no compliance now, we will commence committal proceedings against the attorney-general and the CBN governor,” Mustapha told ThePunch.

In a related development, The Nigeria Security and Civil Defence Corps (NSCDC) says it will continue to arrest and prosecute those involved in the production and circulation of fake redesigned Naira notes.

The Commandant-General of the corps, Ahmed Audi, told Newsmen on Sunday in Abuja that the number of cases of circulation of fake Naira notes had become worrisome.

He warned perpetrators to desist, adding that the corps would not relent, but continue to arrest and prosecute those involved in economic sabotage of the country.

According to him, in less than a month, the corps had arrested and seized fake Naira notes worth millions from members of syndicates in different states in the country. Audi said that while interrogating most of the arrested suspects, it was deduced that the alleged fraudsters took advantage of the low circulation of the redesigned Naira notes to massively produce counterfeit notes

Many innocent Nigerians must have fallen victim to their scheme while they collected bank money transfers and exchanged of foreign currencies. “The arrest of these syndicates will help us fish out more criminals who have decided to take advantage of the economic situation in the country to scam people,” he said.

Audi, therefore, advised citizens to avoid being victims of fraudsters by ensuring they transact with banks, most especially when large sums were involved. # Cash Crunch: Godwin Emefiele Holds Nigerians to Ransom