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Currency Change: Matters Arising

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Macroeconomic stability, by Boniface Chizea

Having been fully engaged through television appearances on both Arise Television. and Nigerian Television Authority (NTA) to discuss the currency change and having been actively involved on the social media as we exchanged views with many compatriots not forgetting also the value of personal experience, I thought it wholesome to present herewith my impression of the entire exercise and most importantly to highlight valuable lessons for the road ahead.

So, please come with me as we undertake this; which I consider a laudable engagement in the overall interest of the future of Nigeria.

Let me commence this review with two latest posts which I encountered in the social media. One showed a Bank’s strong room with someone asking the Bank staff why new notes were piled up there instructing that the Automatic Teller Machines should be immediately loaded with the notes.

This experience albeit as limited as it is will seem to lend credence to the observation by the Governor of the Central Bank that the banks have made themselves cog in the wheel to undermine as it were the success of the entire exercise. There were also obscene videos of bundles of these scarce notes being sprayed at some parties even as we were left with the impression that the source of the notes have been traced to a particular Bank that was fined 20 million Naira.

The other was how a bandit kingpin with his base in Kaduna was shown with humongous piles of the new notes right in the forest conforming the view that the bandits are hand in gloves with some people in the corridors of power. Hope you are not still left wondering why the bandits are proving so difficult to uproot!

The other video that really made me chuckle was the one that indicated that the President has asked to be allowed 7 days to resolve issues around the currency scarcity. Seven days will be at the end of the latest deadline of February 10, 2023. It became clear to me that people are refusing to read the handwriting clearly on the wall. This President for reasons he holds passionately is committed to ensuring that currency piled up in various silos across the length and breadth of this country for the purchase of votes during the elections will be demonetized and made worthless. The APC Governors under pressure themselves just left a meeting with the President where they urged the President to allow both currency I.e. Old and New to remain legal tender in the interim. The President told them he was going to think about it. But one is left wondering why people are refusing to wake up to smell the coffee with such strong aroma?!

The plain fact is that there is a particular candidate who surprised the President by getting as far as he did to become party flag bearer because he leveraged on his very deep pockets, who the President is convinced is not the appropriate candidate to succeed him given his demonstrable incapacities. It does not appear to me that the President is about to slacken this his opposition. But under pressure some agents still believe that the President is going to be persuaded otherwise. But I know fully well that this is all a hiding to nothing: a wild goose chase as it were.

The other videos was some gory scenes of customers who have gone berserk as they could not understand never mind come to terms with the fact that they are being put through excruciating pains and hardships to access money that on their own account was given to the bank in trust for safe keeping. In one of the videos, the gentleman undressed completely walking about stark naked in the bank hall as if he was totally lost and oblivious of the show of shame he was putting up. The other was a lady that dressed down to her braziers and underwear in an attempt to convey to the Bank staff the desperate position she has unfortunately found herself in. There were also bank customers with obviously frayed nerves who engaged themselves in dangerous fisticuffs as an argument ensued amongst them.

All these scenes took place because the bank customers thought they could forcefully convey their desperate situation to make the bank staff change their minds and be sympathetic to give them some concession in the matter and to accede to their requests. But sure customers now know better. The bank staff can only act as per instructions and disregard such instructions at the risk of the security of their employment.

Let me also recall my personal experience for what morals it might offer. I had worked into the bank asking if I could withdraw some cash. With a nice smile, the Operations Manager politely told me it was not possible. Right there I asked if it was possible for me to avail myself of the ATM at the branch, and I was promptly informed that it was not loaded. Naturally, I was downcast as I left the branch mission unaccomplished. I got to Ikoyi Club 1938 where the banks would normally ensure their ATMs are loaded mindful of the elite nature of their clientele only to discover to my utter chagrin that for once the ATMs were not loaded.

Let me also recall an experience I had as we also at the same time had to face long queues at the filling stations. I had exploited my connection with the proprietor of this filling station with nationwide presence to receive preferential treatment to avoid the long queue to have my tank filled. But when it was time to pay, two cards from two different banks did not approve payments most probably due to network unavailability. I was lucky that I was able to make transfer payment. I have not stopped asking myself what mess I could have found myself in if the transfer failed?!

Protests for the first time in living memory have been reported at flash points in Warri, Delta State and of course in Lagos. It is good counsel that the Central Bank has stepped in to ease the pressure by allowing cash withdrawals across the counter. Otherwise the protests could hit boiling point and there are miscreants who are ready to exploit such a development to unleash mayhem on the polity and perpetrate all manner of carnage.

And there is this sentiment being pushed that these developments were aimed at derailing the elections which are round the corner. We must not also forget the recent reassignment of police commissioners. There is the thinking that such moves are targeted at providing a level playing field for all contestants. Some notorious locations at some metropolis are being cleared of hoodlums who might be ready weapons for the intimidation of the opposition. Therefore, quite a lot is unfolding before our very eyes and we poised for a credible and transparent elections.

This exercise we have been duly informed by the monetary authorities has recorded over 75% success as the volume of currency in circulation outside the banking system stands now at 900 billion Naira down from 2.73 trillion Naira upon commencement. What is left is to gradually guide the process of attaining cashless status in a manner to manage the pains and hassles amongst the population mindful of the particular circumstances of the country. Internet availability is unstable with often narrow bandwidth. Beyond the elections to ensure that citizens in remote parts of the country do not suffer any denial, the currency swap program should be continued but closely monitored to avoid abuse of any kind.

The CBN should also gauge the volume of currency it has currently released to ensure its adequacy. And to possibly top up as the need arises to guarantee seamless transition. The deadline of February 10, 2023 must remain sacrosanct. Any further extensions would project the authorities in poor light as rather unserious. The argument that currency notes are promissory and therefore must be redeemed at any time, does not wash with me. If I issue you a promissory note, I should be free to set a time limit within which it must be redeemed. We’ll it would appear this matter is now settled as the Governor of the Central Bank has promised that value will still be given after the expiry of legal status of the currency if the currency was returned to the Central Bank. I personally will not allow myself to be caught with old notes beyond the deadline. Such notes no doubt face doubtful prospects.

DR. BONIFACE CHIZEA
LAGOS
FEBRUARY 04, 2023

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