Buhari’s cold comfort intervention in currency crisis


Ime Akpan

On Thursday, February 16, President Muhammadu Buhari intervened in the currency crisis that has left many Nigerians, especially the everyday people, more pauperised.

He directed the Central Bank of Nigeria (CBN) to extend the deadline for the naira swap policy to April 10, 2023.

The extension was informed by the inability of Nigerians to access their money in the banks following the introduction of new N200, N500, and N1, 000 notes and the attendant supply problem.

The old high denomination currency notes were meant to be phased out on March 31, 2023 before it was extended to February 10 due to supply deficit on the part of the CBN.

The apex bank mopped up over N2 trillion of the old notes but could print only N300 billion of the new notes.

The Nigerian Security Printing and Minting Company Plc (NSPMC), with the CBN as its major shareholder, is believed to lack the capacity to meet the demand for the new notes as it cannot roll out anything above N100 million weekly.

The supply challenge was compounded by the most selfish alliance between politicians and bank officials who sabotaged the currency redesign policy by hoarding the new naira notes supplied by the CBN.

Analysts believe that if N300 billion of the new notes was released into the system, the effect on the citizens would not be so catastrophic.

The CBN did not factor the capacity of bank staff and duplicitous politicians to do mischief into the naira redesign programme. In other words, the apex bank carried on as if it was operating in a saner clime.

According to reports, bank managers personally delivered the new banknotes to the homes of politicians and collected N50, 00 per N1.5 million ‘transaction.’

Besides, bank officials resorted to doing brisk business by neither making funds available to customers over the counter nor loading the ATMs with the new bank notes but diverted supply to PoS terminal operators for a fee.

NewsGazette gathered that each PoS operator paid N10, 000 for every N200, 000 collected through the backdoor.

The operators, would in turn, charge clients N200 or N300 for every N1, 000 transaction.

They hardly give a client N10, 000 except such customer was ready to part with N2, 000 or N3, 000 as CoT. This is only applicable in Lagos. In Port Harcourt, N400 is collected for N1, 000 transaction, where the cash is even available.

Confirming how the banks and politicians have sabotaged the policy, Buhari said in a nationwide broadcast that he was not “unaware of the obstacles placed on the path of innocent Nigerians by unscrupulous officials in the banking industry, entrusted with the process of implementation of the new monetary policy.”

The president therefore directed the CBN “to deploy all legitimate resources and legal means to ensure that our citizens are adequately educated on the policy; enjoy easy access to cash withdrawal through availability of appropriate amount of currency; and ability to make deposits.”

He also directed the apex bank to release the old N200 bank note back into circulation.

He said the currency should circulate as legal tender with the new N200, N500, and N1000 banknotes

He also instructed the CBN to “ensure that new notes become more available and accessible to our citizens through the banks.”

“I have given approval to the CBN that the old N200 bank notes be released back into circulation and that it should also be allowed to circulate as legal tender with the new N200, N500, and N1000 banknotes for 60 days from February 10, 2023 to April 10 2023 when the old N200 notes ceases to be legal tender.

“In line with Section 20(3) of the CBN Act 2007, all existing old N1000 and N500 notes remain redeemable at the CBN and designated points,” he said.

The president also admonished “every citizen to strive harder to make their deposits by taking advantage of the platforms and windows being provided by the CBN,” adding that “our administration will continue to assess the implementation with a view to ensuring that Nigerians are not unnecessarily burdened.”

But the president’s intervention has offered little or no comfort. There is no cash over the counter; there is no cash on the ATMs. The TMs are only used to do transfers, if network does not pose a problem.

In most churches last Sunday, the pews were virtually empty as congregants did not attend service due to cash squeeze. Consequently, tithes and offerings dropped. Offering trays were filled with patched N50.00 and dirty N100.00 notes. Some worshippers who had no cash on them made transfers.

At the bus stops during the weekend through Monday, bus drivers were forced to reduce fares, yet patronage was poor.

For instance, commercial bus drivers operating from Odo-Eran in Itire to Lawanson jerked up the fare from N100.00 to N150.00 in the wake of fuel scarcity. But with the cash crunch, they have reduced the fare to N100.00 for the trip.

An operator told NewsGazette that he hardly makes six trips per day for almost two weeks running.

“Before the crisis, I was running the Odo-Eran-Lawanson route like 10 times daily between 5am and 10pm. But that is history. You can see the bus stop is virtually without activities. You can see vehicles lining up. Some of our members are not putting their vehicles on the road because patronage is abysmally low,” he said.

A columnist with Blueprint Newspaper, Mr. Jerry Uwah, wrote: “The sabotage by banks collaborating with politicians desperate to stock the new notes for vote buying worsened the supply deficit created by the CBN.

“If the banks did not hoard the new notes, the situation would not be as bad as it is today. The truth about the supply deficit and he calamitous effect of the sabotage by banks is that the banks have inflicted seemingly irreversible damage on the system.”

Meanwhile, 10 state governors — Kaduna, Kogi, Zamfara, Katsina, Lagos, Cross River, Ogun, Ekiti, Ondo and Sokoto instituted a suit against the federal government at the Supreme Court challenging the naira redesign policy. All but Sokoto State are controlled by the ruling All Progressives Congress (APC).

On Wednesday, February 15, the Supreme Court adjourned hearing in the suit to February 22, 2023. No one knows what the court would say.

Nigerians have criticised Buhari for disobeying the order of the Supreme Court.

A senior lawyer, Mr. Ebun-Olu Adegboruwa, described the president’s action as contemptuous to the court’s pronouncement.

He said in a statement that Buhari cannot overrule the Supreme Court of Nigeria stressing that the president had flouted the principle of the separation of powers because “there is separation of powers in a democracy.”

“Under section 235 of the 1999 Constitution, the Supreme Court is the final authority in legal pronouncements in Nigeria.

“Under section 287(1) of the Constitution, the President is statutorily obliged to obey, enforce and give effect to the decision of the Supreme Court.

“Section 287(1) of the 1999 Constitution states that the decisions of the Supreme Court shall be enforced in any part of the Federation by all authorities and persons, and by courts with subordinate jurisdiction to that of the Supreme Court,” he said.

Adegboruwa described Buhari’s broadcast as “sad for our democracy.”

“Since he already admitted that the matter is subjudice, the President should not have proceeded to vary the order of the Supreme Court.

“The president and indeed the executive should not give the impression that citizens can brazenly disregard lawful orders of any court, as that will only encourage anarchy and lawlessness.

“It amounts to executive rascality and brazen disregard and contempt of the Supreme Court, for the President to separate the denomination of the old notes for legality. It is not open to the President to choose which portion of the order of the Supreme Court that will be obeyed.

“The President should reverse his directive and add the N500 and N1000 old notes, failing which the Supreme Court should overrule the directive of the president in on February 22 when the case comes up.”

Similarly, another senior lawyer, Mr. Mike Ozekhome, said the president’s address was a gross violation of and disobedience to the existing order of the Supreme Court.

“The President issued a dicta, more in the form of a military decree, that, “in line with section 20 (3) of the CBN Act, 2007, all existing old N1000 and N500 notes remain redeemable at the CBN and designated points”.

He said the presidential order is clear violation of and disobedience to the existing order of the apex court, which had already maintained the status quo ante bellum of all parties involved in the Naira re-design dispute.

“Every Nigerian had expected that the federal government would respect this apex court’s position. But President Buhari demurred.

“Buhari’s broadcast to the nation therefore literally overruled the Supreme Court of the land, in a way and manner only a military tyrant could ever contemplate. To have whimsically and capriciously varied the order of the Supreme Court was to pick and choose what order to obey or disobey.

In an article entitled ‘Too late’ published in The Guardian, Mr. Dan Agbese said the president’s intervention was rather belated and offered little comfort

He said Buharidid what he should have done from the beginning to inform and educate the public on why he chose to do it and what the economy, the people and the country stand to gain from it.”

He also said the current change in stance with the old N200 naira notes remaining legal tender until the end of April “has solved no problems and might have, a) come too late to be effective in that the banks have already mopped up the old notes or b) undermined the policy itself.”

He added: “If the old notes are no longer available, what would the extension achieve but more frustrations for the people who can get neither the old nor the new notes?

“What is the wisdom in making the new notes scarce as a legal tender? Why should a man be restricted to N20, 000 of his own money daily? The endless queues in banks by people who wish to withdraw their own legitimate money cannot be a plus for the president and his administration,” he said.

Agbese said the president might have meant well by the naira redesign policy to stop the use of illicit funds for election “as he tried to educate us in his broadcast…but …it has aggravated our national poverty.”

He added: “Buhari does not need this in the twilight zone of his presidency. He is leaving us with the legacy of a poorly managed economy. That is bad enough. It was unconscionable to pile it on because he aims to reign in the use of money as a tool for elections. Elections everywhere in the world cost lots of money. In only rare cases do those with deep pockets fail to win the trophy. Money fought for his election in 2015 and his re-election in 2019.”

The governor of Kaduna State, Dr Nasir el-Rufai overruled the president on the matter and directed residents of the state not to reject the old N500.00 and N1, 000 notes.

He said in the event that the All Progressives Congress (APC) candidate, Mr. Bola Tinubu wins the presidential election, the policy would be reworked and no citizen would lose their money.

In a statewide broadcast, the governor threatened to revoke or shut down business premises whose owners reject the old notes.

“All the old and new notes shall remain in use as legal tender in Kaduna State until the Supreme Court of Nigeria decides otherwise. I therefore appeal to all residents of Kaduna State to continue to use the old and new notes side by side without any fear.

“The Kaduna State Government and its agencies shall seal any facility that refuses to accept the old notes as legal tender and prosecute the owners. If need be, we shall take further consequential actions according to the law.

“Whether you live in towns, villages or in our isolated rural communities, do not feel stampeded to deposit your old notes in the banks. Hold on to them. Continue to use them as legal tender as ordered by the Supreme Court of Nigeria. No deadline can render them worthless, ever.

“The CBN Act, 2007 and the Bills of Exchange Act, both oblige the CBN to recognise your old notes and give you value in new notes whenever you bring them to the CBN, even in the next 100 years.

“We will also ensure the delivery of your new notes to your various locations without any hardship or expense on your part. We shall save you any panic and the stress of a long journey from your community to the CBN office in our state capital, from March until December 2023 if need be,” he said.

For his part, the governor of Rivers State, Mr. Nyesom Wike, castigated the apex bank’s governor, Mr. Godwin Emefiele, for disregarding the Supreme Court’s judgement on the deadline for the naira swap.

“The governor of CBN is disrespecting Supreme Court. Where has it happened in democracy?

“Supreme Court say do not do this and everybody is folding hands, begging CBN to obey Supreme Court.

“I am not talking about Federal High Court order, not Court Of Appeal; I am talking about Supreme Court.

“Which country has it ever happened? When the order of Supreme Court is not obeyed, what are you telling the poor people on the streets?” he said.

For its part, the Nigeria Governors’ Forum said the currency redesign policy is “currency confiscation.”

“It is our considered view that what the CBN is at present pursuing is a currency confiscation programme, not the currency exchange policy envisaged under Section 20 (3) of the CBN Act, 2007. Currency confiscation in the sense that the liquidity provided to the general public is grossly insufficient due to the restrictions placed on the amount that can be withdrawn regardless of the amount deposited.

“The current approach of the CBN 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. The Forum believes that to deploy a cashless policy and deepen digital transactions, the best practice around the world is to create a suite of incentives to attract customers; rather than a draconian approach as we have witnessed in the last three months,” it said in a statement


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