Some financial experts have commended the Central Bank of Nigeria (CBN) for its decision to redesign the Naira, saying that it would have positive effect on the economy.
The experts spoke in separate interviews with newsmen in Abuja, yesterday.
They spoke against the backdrop of announcement by the CBN that new designs of the N200, N500 and N1,000 denominations would be produced and circulated on December 15.
According to a financial economist and professor of capital market at the Nasarawa State University, Keffi, Prof. Umhe Uwaleke, the decision would be positive for the economy in the medium to long term.
Uwaleke said the measure would go a long way to ensure that the Naira in circulation outside the banking system were brought into the banking system.
He said the measure would also provide enough liquidity for banks, and more money for the banks to lend.
“The measure does not amount to demonetisation of big currency notes often carried out by central banks to curb black money and corruption.
“But it will go a long way in ensuring that a lot of naira notes circulating outside the banks are crowded in.
“If it leads to large deposits in banks, it means the banks will have more money to lend which may reduce interest rates.
“Perhaps, more importantly, with increased currency in circulation now in the vault of banks, I expect to see improvement in monetary policy transmission,” he said.
Uwaleke said it might also have the effect of reducing speculative attacks on the Naira in the parallel market in the medium term.
“I expect that the Financial Intelligence Unit will be on the lookout for huge deposits as a way of monitoring illegitimate transactions.
“Despite the huge cost involved in changing currency notes, I think it’s time to sanitise the system, especially now that electioneering activities have kicked off,” he said.
He, however, said the deadline of January 31, 2023 was too short, considering the number of Naira denominations involved, urging the CBN to consider extending it.
An economist, Dr Tope Fasua, also said the measure would have significant effect on the economy, adding that it was essentially about “black money.”
He suggested that the CBN should take such measures more frequently.
“When central banks do this, they try to pull in monies people are hiding; illegal money, corruption money, kidnapping money. Nigeria has managed to become a hub for these kinds of illegalities.
“I will even suggest that the CBN does this more often, maybe every 10 years. You will see a scenario where the banks are awash with liquidity.
“There are many people sitting on billions in naira, and even in dollars. The CBN should also see how it can pull in the dollars,” he said.
Fasua advised that the idea of individuals operating personal domiciliary bank accounts should be banned, adding that nobody needed it.
“People are speculating against their own currency in their own country. That is not allowed in any economy.
“They should pull in illegal, black naira and then see how they can pull in illegal dollars. The CBN can control these things through the Deposit Money Banks,” he said.
However, a financial expert, and past President of the Chattered Institute of Bankers of Nigeria (CIBN), Mr Okechukwu Unegbu, said redesigning the Naira was not the most important problem facing the economy.
Unegbu, said the apex bank should have simply ensured that the scarce lower naira denominations, like N100 and N200 were readily available by printing more.
However, the Economic and Financial Crimes Commission (EFCC) has said it would monitor the redesign of Naira notes by the Central Bank of Nigeria (CBN) to ensure that currency hoarders do not undermine the exercise.
The CBN Governor, Godwin Emefiele, had announced that the apex bank obtained the approval of President Muhammadu Buhari to redesign and issue new N200, N500, and N1000 notes that would come into circulation on December 15, 2022.
Speaking on the development, the Executive Chairman of the EFCC, Abdulrasheed Bawa, in a statement issued, yesterday by the spokesperson of the anti-graft agency, Wilson Uwujaren, described the move by the apex bank as “a well-considered and timely response” to the challenges of currency management which has negatively impacted the country’s monetary policy and security imperatives.
Bawa, however, warned that the EFCC would monitor the process to ensure that unscrupulous players and currency speculators and their cohorts among the bureau de change operators do not undermine the exercise.
He also charged banks to be alive to their reporting obligations and not assist unscrupulous customers in laundering suspected proceeds of crimes through their system.
The EFCC boss added that the objectives which the CBN seeks to achieve with the redesign and reissue of the higher denomination naira notes, were in tandem with the objectives of the Money Laundering Prevention Prohibition Act 2022, which criminalises the conduct of cash transactions above a certain threshold.
“According to Section 2 (1) of the Money Laundering Act 2022: No person or body corporate shall, except in a transaction through a financial institution, make or accept cash payment of a sum exceeding— (a) N5,000,000 or its equivalent, in the case of an individual; or (b) N10,000,000 or its equivalent, in the case of a body corporate,” he noted.
Bawa expressed hope that the new currency measure would further boost Nigerians’ embrace of banking culture and encourage the acceptance of cashless transactions, adding that the anti-graft agency had recently taken operational action against currency hoarders in major commercial cities of Nigeria.
“It is, therefore, pertinent to issue this stern warning to Bureau de Change operators to be wary of currency hoarders who would attempt to seize this opportunity to offload the currencies they had illegally stashed away,” he said.
Noting that currency hoarders readily made their hoard available to criminal enterprise, the EFCC boss further stated that the commission will spare no effort to bring to book any financial services operator who runs afoul of extant laws and regulations.
Earlier, the Central Bank Governor, Godwin Emefiele, had said that the apex bank would redesign the country’s currency.
Emefiele, who announced this at a press briefing in Abuja, said that the exercise would affect the highest denominations: 200, 500, 1000 notes.
He said that the action was taken in order to take control of the currency in circulation.
According to him, the bulk of the nation’s currency notes were outside bank vaults and that the CBN would not allow the situation to continue.
Emefiele said that the new notes would be released for public use on December 15, 2022.
He also said that the old notes and the new notes would circulate together until January 31, 2023 when the old notes would cease to be legal tender.
Emefiele said that there have been persisting concerns with the management of current series of banknotes, and currency in circulation, particularly those outside the banking system in the country.
He said, “As you all may be aware, currency management is a key function of the Central Bank of Nigeria, as enshrined in Section 2 (b) of the CBN Act 2007. Indeed, the integrity of a local legal tender, the efficiency of its supply, as well as its efficacy in the conduct of monetary policy are some of the hallmarks of a great Central Bank.
“In recent times, however, currency management has faced several daunting challenges that have continued to grow in scale and sophistication with attendant and unintended consequences for the integrity of both the CBN and the country.”
The challenges he said included hoarding of banknotes by members of the public, with statistics showing that over 80percent of currency in circulation was outside the vaults of commercial banks.
He added that the worsening shortage of clean and fit banknotes with attendant negative perception of the CBN and increased risk to financial stability as well as, increasing ease and risk of counterfeiting evidenced by several security reports were reasons for redesigning the notes.
He said that recent development in photographic technology and advancements in printing devices have made counterfeiting relatively easier and that in recent years, the CBN has recorded significantly higher rates of counterfeiting especially at the higher denominations of N500 and N1,000 banknotes.
The CBN boss noted that although global best practice was for central banks to redesign, produce and circulate new local legal tender every 5–8 years, the Naira has not been redesigned in the last 20 years.
He said, “On the basis of these trends, problems, and facts, and in line with Sections 19, Subsections a and b of the CBN Act 2007, the Management of the CBN sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N200, N500, and N1,000 levels.
“In line with this approval, we have finalized arrangements for the new currency to begin circulation from December 15, 2022. The new and existing currencies shall remain legal tender and circulate together until January 31, 2023 when the existing currencies shall seize to be legal tender.
“Accordingly, all Deposit Money Banks currently holding the existing denominations of the currency may begin returning these notes back to the CBN effective immediately. The newly designed currency will be released to the banks in the order of First-come-First-serve basis.
“Customers of banks are enjoined to begin paying into their bank accounts the existing currency to enable them withdraw the new banknotes once circulation begins in mid-December 2022. All banks are therefore expected to keep open, their currency processing centres from Monday to Saturday so as to accommodate all cash that will be returned by their customers.
“For the purpose of this transition from existing to new notes, bank charges for cash deposits are hereby suspended with immediate effect. Therefore, DMBs are to note that no bank customer shall bear any charges for cash returned/paid into their accounts.
“Members of the public are to please note that the present notes remain legal tender and should not be rejected as a means of exchange for purchase of goods and services.”
The governor said that his team was mindful of those in rural areas and that facilities would be provided for them where bank accounts could be opened for them or their old notes exchanged for the new ones.
He added that the action would also raise its stake in addressing the challenge of inflation.
Reminded that the current regulation allows only N150, 000 free cash deposit, he said that even if a customer wanted to deposit N1billion, the person would be allowed to do so.
Emefiele assured that the CBN would continue to monitor both the financial system in particular, and the economy in general, and always act in good faith for the achievement of the Bank’s objectives and the betterment of the country.
There had been claims even by top government officials that some unscrupulous members of the society were hoarding large volumes of currency notes in warehouse, farms, septic tanks.
Very dirty and smelly Naira notes have been in circulation, especially since political activities heightened across the country.
Customs Suspends Rice Sale As Seven Die In Stampede
The Nigeria Customs Service has announced the suspension of the sale of foodstuffs following a stampede that reportedly killed seven persons at the NCS Old Zonal Headquarters in the Yaba area of Lagos State, last Friday.
A Chief Superintendent of Customs and National Public Relations Officer for Comptroller General of Customs, Abdullahi Maiwada, disclosed the suspension of the exercise in a statement on Monday.
Nigeria Customs had said it was selling seized food items at N10,000 per 25kg to alleviate the people’s suffering as a result of the current high cost of living and other economic hardships.
Last Friday, a pregnant woman and six others reportedly died in a stampede after some suspected hoodlums attempted to force their way into the Yaba Customs office compound.
Some Lagos residents who thronged the NCS office in Yaba expressed disappointment on Monday following the suspension of the initiative.
However, in a statement on Monday evening, the NCS said the suspension became necessary considering “the recent unfortunate event.”
“We regrettably announce the suspension of this exercise until we establish what transpired on Friday, February 23, 2024,” the NCS spokesman said.
He explained that: “The disposal of the food items got off to a smooth start at about 0800hrs. We enjoyed the cooperation of the large crowd that obliged us, giving preferences to the elderly, people living with disabilities, pregnant women, and other vulnerable Nigerians who showed up for the exercise.
“This was the case up until about 1700hrs, as attested to by the over 5,000 beneficiaries and members of the press. However, unforeseen challenges arose when we ran out of stock and announced the continuation of the exercise the following day, leading to a regrettable outcome.
“The crowd became desperate and charged through our barricades in search of rice bags inside emptied containers. In the stampede that ensued, some fatalities and injuries were regrettably recorded.”
The Customs extended its “heartfelt condolences to the families of those who lost their lives during the unfortunate incident.”
The service said it was working with health authorities to establish contact and engage directly with the victims’ families on their next steps.
Court Dismisses Police Objection Against Fubara’s CoS …Restrains Police From Arresting Ehie
A Rivers State High Court in Port Harcourt, yesterday, dismissed the preliminary objection by counsel to the Nigerian Police, Celestine Dickson, challenging the jurisdiction of the Court to hear the fundamental rights suit by the Chief of Staff to Governor Siminalayi Fubara, Hon. Edison Ehie against the police for lack of merit.
The trial Judge, Justice Sika Aprioku, in a ruling, yesterday, assumed jurisdiction and held that the non-joinder of the Nigeria Police Force in a matter that the Commissioner of Police is a party to does not render the suit incompetent.
Justice Aprioku said the application by the Police lacks merit and thereby dismissed it with a cost of N100,000 in favour of Hon Edison Ehie.
Aprioku also granted the prayers of the counsel to Edison, Damian Okoro to restrain the Police from arresting, detaining, harassing, or inviting Ehie based on the trumped-up charges in the suit by Rt Hon. Martin Amaewhule in connection to the destruction of the Hallow chamber of the Rivers State House of Assembly.
Speaking to newsmen outside the courtroom, counsel to the Police, Celestine Dickson, said he would study the judgment and advise his clients accordingly.
Dickson stated, “That is the wisdom of the court and we cannot criticise the wisdom of the court. The outcome of court decisions must bind parties.
“If you are not satisfied I think you study the judgement and take the next step. The court made it clear that in a couple of minutes, we were going to have copies of the judgement. That will give us the opportunity to look at the judgement and advise our clients accordingly.
On his part, one of the counsel to the Chief of Staff, Ibioku Mac-Barango said the judgment reflects the position of the law.
Fubara Expresses Confidence In Tinubu To Address Labour Concerns
In the midst of the ongoing nationwide protest organised by the Nigeria Labour Congress (NLC), Rivers State Governor, Sir Siminalayi Fubara, has expressed confidence in President Bola Tinubu’s ability to address the concerns raised by the organised labour and alleviate their fears.
Fubara gave the assurance during the NLC’s protest to the Government House, Port Harcourt, yesterday .
The State NLC, led by its chairman, Alex Agwanwor, had joined its counterparts in other parts of the country to protest against high cost of living in the country occasioned by the fuel subsidy removal by the Federal Government in May last year.
Recall that there have been a series of protests across the country over the cost of living, inflation, insecurity and hardship among Nigerians.
The NLC and the Trade Union Congress (TUC) had on February 8 issued a 14-day nationwide strike notice to the Federal Government over the failure to implement the agreements reached on October 2, 2023 following the removal of the fuel subsidy.
Responding to a letter of demands presented to the governor by the State NLC, Fubara noted that the grievances outlined by the protesters primarily fell within the purview of the Federal Government.
The governor, who was represented by the Head of the Rivers State Civil Service, Dr. George Nwaeke, said, “To all who listened to every presentation of the labour leader as it is being read out, we can find out none is local, not originating from local source here. They are all national issues and we have hope in the Renewed Hope Agenda of the Federal Government. We have hope. And I know Governor Fubara will also deliver this message as presented by you to the President.”
Fubara further assured the protesters that his administration remained committed to alleviating the economic hardships faced by the people of Rivers State.
He highlighted initiatives such as the provision of palliative buses in response to the fuel subsidy removal and the ongoing development of 20,000 housing units for low-income earners.
The governor also emphasized his administration’s dedication to improving the welfare of civil servants, citing measures such as the employment of 10,000 youths into the state civil service, promotions, and the provision of bonuses.
He affirmed the significance of the issues raised and reiterated his commitment to prioritizing the welfare of workers in the State.
He, however, assured that the NLC’s demands would be conveyed to the President as presented.
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