Let me unequivocally state without any fear or favour that while the naira redesign policy is undoubtedly the right thing to do, I’m no longer very confident if the reason for it is 100% right.
By Tiko Okoye
The title of this piece isn’t original to me. Truth be told, I had almost finished a piece meant for publication today on how cunning – aided by a large dose of good fortune that the sudden demise of the Abia State PDP governorship candidate, Uche Ikonne, bequeathed to the beleaguered PDP national chairman, Sen. Iyorchia Ayu – finally undid the bond of comradeship forged between members of the PDP-G5, the five governors led by Rivers State Gov. Nyesom Wike who had sworn not to support the PDP presidential ticket unless Ayu steps down for a Southerner.
The demise of Ikonne forced Abia State Gov. Okezie Ikpeazu to eat humble pie and seek rapprochement with Ayu, the only man, as per the extant electoral law, who could grant him his personal wish to hand-pick a replacement. Needing to stoop in order to conquer, Ikpeazu renounced his ‘rebellious, anti-party’ activities and promised to toe the official party line henceforth like a prodigal son.
Oyo State Gov. Seyi Makinde was full of righteous indignation when the crowd started chanting “Atiku! Atiku!!” as he commenced a speech to mark his inaugural re-election campaign in Ibadan. He must’ve certainly learnt a thing or two from that sour experience. ‘Homeboy’ Benue State Gov. Samuel Ortom is being subjected to insufferable pressure to break rank with his ‘comrades’ and make peace with his Tiv brother. After all, blood is said to be thicker than water. One can, therefore, hardly blame the street-wise Wike for perspicaciously hastening to court to obtain a pre-emptive order barring the PDP from suspending or expelling him.
But the full story of the G5 will await another day, because as I tried to check comments by readers on a piece I posted today on my Facebook wall titled “Nigeria, my beautiful motherland, on my mind,” I espied a poser by a former colleague at the Daily Independent newspaper in the era the paper was a must-read on politics and economics, Olumide Iyanda. The boxed words on his wall caught my fancy: “Naira redesign: Right thing for the wrong reason or the wrong thing to do for the right reason? Discuss.” And I immediately said, why not!
Successive top management of the Central Bank of Nigeria – present company included – have engaged in monetary policy formulation and implementation as if it was a Sisyphean task. The challenge that kept popping up like a recurring decimal was – and still is – the unacceptably high percentage of money supply informally held outside the banking system. The apex bank estimates this to be in the region of 60-65%. No monetary policy can be meaningfully implemented with such a large amount of money held outside the jurisdiction of a central bank. Ameliorative measures that have been adopted in the past and present to no effect include hikes in the CBN benchmark rate, ramping up cash reserve requirements, ‘sterilising’ excess bank deposits and heightened Open Market Operations.
Although, there has been a discernible traction since the apex bank introduced its cashless policy in 2012, the uptake more than 10 years later is nothing to write home about. This was principally why economic and financial pundits hailed the unveiling of the naira redesign policy as it was largely perceived as the way to finally untie the Gordian knot of the nation’s monetary policy formulation and implementation. The consensus of opinions was that it would fast-track the realisation of a relatively cashless economy, improve the efficiency of banking operations by way of digital finance and subject total money supply in the economy to the informed control of the apex bank.
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There was also another reason why the naira redesign policy was initially very well-received. Elections in Nigeria have become highly monetized and overt vote-buying has become the norm rather than the exception. It was believed that the currency scarcity attendant with the scheme would significantly curb the capacity of money bags to corrupt the electoral process and suborn the will of the electorate.
But things soon took a new turn when word began to spread like bush fire fanned by the harmattan wind to the effect that the policy was actually intended to checkmate the capacity of a particular presidential candidate to influence the outcome of this month’s election with his allegedly deep pockets. As far as I was concerned, the rumour started gathering a semblance of reality when the presidential candidate in question publicly pledged to immediately put an end to the current multiple-exchange-rate policy of the apex bank upon swearing the oath of office.
From my professional run-ins with the current CBN Governor I know fully well that he doesn’t take kindly to such criticisms. It is, thereby, highly plausible that he decided to extract his pound of flesh by collaborating with powerful members of the notorious Aso Villa cabal, who have President Muhammadu Buhari’s ear and who not only unlawfully attempted to draft a sitting CBN Governor into the race for the APC presidential ticket at the eleventh hour but are known to be viscerally opposed to the emergence of the presidential candidate in question as Buhari’s successor.
Let me unequivocally state without any fear or favour that while the naira redesign policy is undoubtedly the right thing to do, I’m no longer very confident if the reason for it is 100% right. Was the CBN expecting aliens from outer space to man the banks during the course of implementing the policy? Shouldn’t the nation’s experience with dirty currency notes – despite billions of naira reportedly spent annually on printing new currencies – have forewarned the apex bank about the probable misconduct of the management and staff of banking institutions? And what is to become of rural dwellers who constitute more than 70% of the population in a nation where nearly 50% are financially excluded and rural banking is practically non-existent?
Apart from the fact that the CBN top management didn’t really think through the policy prior to its rushed introduction, I’m beginning to believe like many others that the naira swap is being deliberately mismanaged in order to create chaos and mayhem so that master puppeteers could opportunistically use the confusion as a façade for truncating our nascent democratic experience. A climate of uncertainty will becloud the polity in the period between 10th of this month – the ‘final’ deadline for the naira swap – and the 25th – when the presidential election will supposedly hold – as anything can still happen.
To claim, as many proponents are contending, that the currency scarcity crisis brought about by the naira redesign policy seems like a leveller across Nigeria as the rich and the poor have been equally crying, is to mealy-mouth an inanity. The wealthy in Nigeria have always lived above our laws with impunity. And if the idea is to stop politicians bent on monetizing the process in their tracks, the current state of anomie created by currency and fuel scarcity – not to mention looming starvation – only makes voters more cheaply susceptible to the gimmicks of stomach infrastructure.
Two scenarios highlight the incongruities of the Nigerian experience. Photographs of bandits brandishing truckloads of the new currencies in their hideouts have been trending on social media platforms, even as law-abiding Nigerians are perilously left on their own. And what do you make of the case of the CBN Governor who not long ago needed protection by soldiers to escape being arrested on terrorism charges by agents of the Department of State Services (DSS) but is today directing the same DSS agents to arrest banking staff hoarding new currencies? Nigeria, we hail thee!
Millions of micro- and small-business entrepreneurs have stayed too long away from their shops and the unacceptably high transaction costs and business disruptions in a sector of the economy that accounts for more than 60% employment are bound to culminate in the inability to service their microloans. Since the overall effect on the economy – particularly the health of the microfinance banking sub-sector – can only be imagined, it goes without saying that the apex bank should be planning how to support this vital sector with special relief packages.
The perspectives the three presumptive presidential frontrunners with respect to the naira redesign and its impact on ordinary Nigerians are highly illuminating. One reportedly called on Nigerians to lend unalloyed support to the policy as it is the best thing to happen to the economy in a long while. A second was concerned that millions of Nigerians are being driven into grave desperation and despondency on account of the shortcomings of the execution of the policy, while the third brashly said “If I go to a bank to ask for cash, don’t give me” before calling on the CBN top management to ensure that petty traders, who are sadly leaving their daily job to queue at ATMs, should get their daily withdrawal limit without further stress. Now go do your homework to figure out who said what!
