NAIRA NOTES: CBN MUST ACT NOW
All issues involving the new notes should be resolved quickly
We hope the Central Bank of Nigeria (CBN) will seize the face-saving opportunity provided last Friday by the National Council of State to resolve the logjam created by its implementation of the Naira redesign policy. From schools to hospitals and markets, no sector is immune to the harrowing experiences that the shortage of Naira notes has caused. But following a meeting during which the CBN Governor, Godwin Emefiele, briefed members, the Council tasked the apex bank to either make available the new notes or begin to recirculate the old notes to ease the suffering of Nigerians.
From what has transpired in recent weeks, the CBN has not acquitted itself very well in the implementation of this policy. The issue is not just about having the power or authorisation to do something, especially if the goal is about achieving the desired purpose, it is more important to limit unforeseen adverse consequences. That takes a lot of planning and monitoring. Whatever may have been the intended benefits of the policy, systemic inadequacies that make life difficult for the ordinary people is inexcusable.
Meanwhile, we do not believe the cases being instituted at the Supreme Court by some governors within the ruling All Progressives Congress (APC) offer any practical solution. These governors should find other means to resolve their internal contradictions. There is no debate about the fact that Section 19 of the CBN Act 2007 empowers the apex bank to issue the national currencies in “such forms and designs and bear such devices as shall be approved by the President on the recommendation of the Board.”
However, as we have consistently argued, for a policy of great strategic public consequence, proper management demands a synchrony of purpose between and among critical stakeholders. That was where the CBN failed. The alarm bell started ringing when the Minister of Finance, Budget and National Planning, Zainab Ahmed, told the National Assembly that she had no idea about the policy. Irrespective of what the enabling Act says, horizontal and vertical engagements ought to have preceded or follow the announcement of a such a policy decision by the CBN.
This is a policy we have endorsed, and we are not about to change our position. The challenge with the policy is in the implementation. Although global best practice is for central banks to redesign, produce and circulate new local legal tender every five to eight years, the Naira has not been redesigned in the last 20 years. The challenge, however, is that older generation of Nigerians who were around during a similar currency redesign in 1984 have unpleasant memories that are not helped by the fact that the military head of state at that time is the current civilian president. With reports of economic and social disruptions from implementing the policy in recent weeks, not a few of them are now drawing unpleasant parallels with when a certain Major General Muhammadu Buhari was military Head of State.
The times may have changed with the introduction of technology, but glitches in online banking and platforms have added to the woes of ordinary people. Yet, decisions that affect every Naira in people’s pocket are a matter of grave public interest. When such a decision creates dissension among those it is meant to serve, there is a problem. Such is the level of desperation that in some states in the North, traders have opted for the CFA franc as their means of exchange, an act seen by some as a vote of no confidence in our monetary policy.
We hope that Emefiele and his team will do everything within their power to ensure that all the issues impinging the CBN Naira redesign policy are resolved hopefully within the next few days.
