CBN: Realigning Policies to Meet Stakeholders’ Expectations Amidst Challenging Economy

Barnabas Eke

The Central Bank of Nigeria (CBN) has been proactive, some may say, upfront, in its communications on issues such as validity of old and redesigned naira notes beyond December 31, 2023, the resilience and health of commercial banks, the circulation of counterfeit currencies as well as appeal dissuading Nigerians from hoarding of naira notes.  These communications are aimed at assuring stakeholders of its commitment to addressing hiccups to efficient management of the economy from its perspective.

Perhaps, the “elephant in the room” is the validity of the old and redesigned naira notes, which, thankfully, the CBN, has come clear to address by assuring that both remains legal tenders beyond December 31 2023, the hitherto deadline set for the cessation of the old 200, 500, and 1000 naira notes. The CBN’s position was sequel to the Supreme Court ruling reversing its previous order to phase out old naira notes and granting that the old and the redesigned notes remain legal tenders, ad infinitum, until the Federal Government decides otherwise.

Given the controversy that trailed the Naira redesign policy, the attendant hardship Nigerians were subjected to and the massive disruptions to economic activities during the period of its implementation, the CBN’s statement could not have come at a better time.
On the other hand, in its press statement on circulation of counterfeit banknotes on December 8, 2023, the Ag. Director, Corporate Communications of the apex bank, Sidi Ali Hakama (Mrs.), advised Nigerians to be watchful and report circulators of fake currencies to appropriate authorities and “encouraged the public to embrace alternative modes of payments, e-channels, for day- to- day transactions to mitigate the risk of spread of counterfeit banknotes.”
Also on the speculations in some quarters regarding the health of some banks, she equally, “appealed to Nigerians to disregard the media reports listing banks as failing the Capital Adequacy Ratio stress test for international authorisation as the report did not emanate from the Central Bank of Nigeria.” No doubt, the Apex bank deserves commendations for its communications on these issues; thus far as they have the potentials to create the stability needed to drive the ongoing reforms of the apex bank.

However, for the message to stick, certain actions needed to be taken by way of deepening supervision.
Take for example the appeal not to hoard currencies. A lot of bank automated teller machines (ATMs) are not dispensing the volumes that they used to and, without a convincing explanation, it would be difficult to push through the argument for cash availability.  A corollary to the above is the issue of currency racketeering through sale of new notes at party venues and in major parts of our cities.  These ‘scarce commodity’ are available to the unscrupulous but rationed to legitimate users. Compared to the volume of new currencies customers are served in the banking halls, Nigerians cannot but be reminded of the unprofessional conducts of some bank officials who cash-in at any given opportunity to pillage the system for personal gains. These infractions, though micro in scale, are capable of eroding the confidence of the public and affect the expected response to major policy planks underpinning the ongoing reforms by the apex bank.
It is also important to note the activities of POS operators. They have become critical players in the system and huge influencer given their accessibility by the public. A huge chunk of cash deposits that hitherto were taken to the banks are now being ‘traded’ with the point of sales (POS) operators who, most often, disregard the advertised approved charging rates. When confronted, a common defense is that their charges are reflective of how they source their funds. An appeal to such players not to hoard currencies, when they come across any, may not be heeded. It is against this backdrop that effective monitoring of all players are recommended.
While there is reason to hope that calls for attitudinal change would resonate with the citizens, it’s a common knowledge that behavioural change takes a process- usually a long time, to achieve. 
Only, recently, the CBN Governor, Olayemi Cardoso approved a revised service charter for the apex bank. If the CBN is committed to high ethical standards in its operations as outlined in the charter, it is expected that its partners in the running of the economy should be subjected to play by the books. That way, any call on the public for understanding and cooperation would be desirous even if it entails making more sacrifices beyond where we are, currently.

.Barnabas Eke, is a financial analyst and CEO Barntrends Services Limited based in Lagos.