Naira crisis worsens, Emefiele justifies redesign

The crisis surrounding the naira redesign worsened on Tuesday as the Central Bank of Nigeria failed to clarify the legal tender status of the old notes.

 

The development created more confusion across the country amid the refusal by banks, filling stations, and traders to accept the old currencies.

 

This happened as a shortage of new notes persisted in states and the Federal Capital Territory.

 

However, the CBN Governor, Godwin Emefiele, on Tuesday ruled out further extension of the deadline stipulated for the phasing out of the old N1,000, N500 and N200 notes.

 

Emefiele made the disclosure during a meeting with members of the diplomatic community in Abuja.

 

He spoke against the backdrop of concerns generated by a Supreme Court order suspending the February 10 deadline pending the determination of a suit by some state governors slated for hearing on February 15 (today).

 

Amid Nigerians’ belief that the old notes would remain legal tender until the determination of the Supreme Court suit, the CBN governor told members of the diplomatic community that the apex bank would not extend the deadline.

 

Emefiele was however silent on the legal tender status of the old naira notes.

 

He said, “No doubt there are pockets of pressure in some areas. The CBN is working hard to shift pressure, and resources to those areas in order to ease the tension. The situation is substantially calming down since the commencement of over-the-counter payments to complement ATM disbursements and the use of super-agents. There is, therefore, no need to consider any shift from the deadline of February 10.”

 

Meanwhile, massive protests erupted in some parts of the country on Tuesday as  commercial banks, filling stations and traders rejected the old notes from customers.

 

Hundreds of angry citizens who took part in the protests in Abeokuta, Sango-Ota, Ogun State and Akure in Ondo State kicked against the decision of the CBN to withdraw the old notes despite failing to provide the new notes in sufficient quantity.

 

However, a group in Abuja held a street demonstration in support of the CBN policy. The protesters, however, incurred the anger of street urchins, who attacked.

 

The protests occurred just as Emefiele announced during a meeting with the members of the diplomatic corps in Abuja on Tuesday that the extension of the February 10 deadline for the currency swap was no longer necessary.

 

He refused to extend the deadline less than 24 hours before the hearing of the suit filed by Kaduna, Kogi, Zamfara, Ondo and other states against the CBN demonetisation policy.

 

The Attorneys-General of the applicant states were expected to storm Abuja as the Supreme Court begins hearing the case on Wednesday (today).

 

But smarting from the hardship inflicted by the cash shortage, Ondo residents stormed the state branch of the CBN in the Alagbaka area of Akure to express their anger over their inability to swap the old naira notes for the new ones.

 

One of the protesters, who identified himself as Adeyemi said, “I collected old N1000 notes from my bank’s ATM in Alagbaka this morning but sadly the bank officials refused to collect old notes in the banking hall. In fact, I am confused. This is a bad situation in our country.”

 

Another protester said they were directed to the CBN to exchange their old notes by the commercial banks.

 

But contrary to an earlier directive by the apex bank, its officials in Akure refused to collect old naira notes from residents.

 

A  CBN official explained that the apex bank could not help them.

 

“I don’t know why the people are coming to the CBN. They should rather direct their grievances to their commercial banks, not to us here. We don’t have any directives to attend to customers. But I know very soon this issue will be resolved,” he stated.

 

But as the number of protesters grew, the policemen drafted to the scene ordered them to leave the vicinity.

 

In Abeokuta, the Ogun State capital, scores of retail fish sellers under the aegis of the Association of Fish Sellers, also protested the rejection of the old naira notes which had affected their business.

 

Some demonstrators also shut down the busy Lagos-Abeokuta Expressway in the Sango-Ota area.

 

Fish sellers

 

The fish sellers lamented their inability to carry out transactions with the old naira notes due to the CBN cashless policy, stating that many businesses had shut down.

 

They added that both the banks and the wholesalers had refused to accept the old notes for transactions.

 

Speaking on behalf of the fish traders, Mrs Rasheedat Oyebola noted that their business might collapse due to the rejection of the old notes by the banks and cold room operators.

She said, “We have tried all that we could but to no avail. That is why we have decided to go around today to explain our plights to Nigerians, so the CBN governor can have mercy on us.

 

“Some of us here today are single parents and we have been struggling all our lives. If our cash is refused as legal tender, we may die. We appeal to everyone who can help us to, as a matter of urgency, come to our aid.”

 

The protesters at the Lagos-Abeokuta Expressway complained that they could not withdraw cash from the Automated Teller Machines at Sango-Ota. They made bonfires on both sides of the highway, causing serious traffic gridlock.

 

Some of the protesters told the News Agency of Nigeria that the current cash crunch had created serious pain and agonising moments.

 

The leader of the protesters, Mr Kazeem Sanni, described the situation where bank customers could not access their money as unfortunate.

 

“The situation is really pathetic as this has grounded and paralysed business activities. We decided to demonstrate to show our grievances as we can no longer bear this hardship,’’ he stressed.

 

He called on the CBN to urgently print more new notes and ensure that banks complied with its directives.

 

A protester, Mr Rotimi Odubanjo, noted that the inability to withdraw money from banks had inflicted untold discomfort on the people.

 

“We need the Federal Government to come to our assistance and ease this cash and fuel scarcity,’’ he said, adding that the twin scarcity of fuel and cash had crippled economic activities.

 

Police, military and paramilitary personnel were deployed at the scene to calm the situation.

 

In Abuja, a protest by supporters of the new naira policy turned bloody as street urchins invaded the venue and attacked the protesters.

 

The incident happened after a press conference was held by the Civil Society Organisations Central Coordinating Council.

 

The protesters had set out to march to the office of the Attorney-General of the Federation when they were attacked with cudgels, axes and other dangerous weapons.

 

During the fracas, journalists and protesters fled the scene but an unknown number of persons were reportedly injured.

 

An eyewitness, Audu Emmanuel, stated, “The thugs came out from nowhere and attacked our peaceful march. They were hitting everyone in sight, snatching phones, bags and everything they could lay their filthy hands on, especially the women.

 

“We believe the governors who were watching the press conference live mobilised these thugs. They may have been heading for the venue but met us on the march and attacked us. This should not be allowed in a city like Abuja.

 

“We had earlier accused the governors of mobilising violence and they have proved our intelligence right. The security agencies must rise to the occasion and stop them before it is too late.”

 

Pro-CBN protest

 

The National Coordinator of the CSOCCC, Obed Okwukwe, had accused 10 unnamed governors of masterminding the protests against the currency policy in their states.

 

Across the nation’s capital, many banks refused to accept the old notes for the second day, citing a directive from the CBN.

 

Many commuters were stranded as they could not get cash to take public transport as cab drivers refused to collect the old naira notes.

 

Narrating her ordeal, a secondary school teacher, Mrs Mary Kome, said she had been standing for a long time because she did not have the cash to pay the cab drivers.

 

Kome who spoke with our correspondent at Berger Bus stop, in Abuja said, “ I have been standing here for over one hour. Once the drivers come, they tell us if you don’t have your new notes, please don’t board the cab. We thought that was just a peculiar case, but I have stayed here for over one hour.

“I have tried to use the PoS machines but they also don’t have money. It’s a long distance to my house and I still need to cook and come back to town but I have no means of getting home unless a miracle happens.”

 

Another frustrated commuter, Mr Hassan Moyaki, bemoaned his plight and inability to get transportation back to his home in Zuba, a suburb of the FCT.

 

CBN governor

 

Meanwhile, Emefiele blamed those mopping up cash, hoarders and racketeers for the queues at the ATM points.

 

“We have also noticed that some Nigerians are capitalising on the time transition to charging exorbitant fees. These selfish actions for personal monetary gains are causes of hardship for Nigerians and come at the expense of lives and livelihood,’’ he said, assuring that the bank would provide the optimal amount of cash to support economic activities.

 

“The CBN will create the availability of an appropriate optimal amount of currency of N500, N200, N1000 denomination and even the existing 100-naira notes, 50 and 20 naira to support economic activities. We will continue to issue and circulate new notes but once we get to our optimal level, or slightly above, we will seek to put in place a policy that people must not keep monies in their homes,” Emefiele said.

 

He noted that Nigeria had one of the best payment infrastructure in the world, which would help in the full implementation of the cashless policy.

 

He also said that the economic shock triggered by the naira scarcity was temporary and necessary to encourage a more cashless economy.

 

To effectively drive a cashless economy, the governor submitted that the money in circulation should be around N700bn to N1tn.

 

He appealed to members of the diplomatic community for support in ensuring the success of the cashless policy.

 

The CBN governor strangely blamed the Economic and Financial Crimes Commission for encouraging people to hoard cash and do transactions outside the banks.

 

“What happens is that when suspicious transactions are reported by the bank to the NFIU, the EFCC and ICPC are obligated to pick those suspicious transactions and investigate them. But of course, what we found in the course of investigating them, those who thought that they were being investigated for those suspicious transactions began to abandon the banks and began to build vaults in their homes.

 

“That is the reason we’ve seen currency outside the banking industry at N2.72tn out of N3.32tn. This is unacceptable, we want a situation where the CBN is in firm control of the money supply and like I keep saying we have our data,’’ Emefiele added.

 

The CBN governor also said that Point of Sale agents who charged above N200 for the CBN cash swap programme would be arrested and jailed when caught.

 

He further said that the PoS operators could come to the CBN to be compensated for any extra cost incurred in getting the new notes rather than levying a higher fee on customers.

 

PoS agents

 

“We have started to arrest them. We will prosecute them, and they will go to jail. And that stamping money will also go to jail. We shouldn’t take advantage to create pain for people who genuinely want to conduct their economic activities in the country,” Emefiele said.

 

He accused some leaders in the country of driving tension and agitation instead of helping to calm the citizens.

 

The CBN governor also admitted that the bank was trying to curtail high election spending.

 

But bank customers and PoS operators have queried the rationale behind the apex bank’s decision to draw the curtain on the old notes.

 

The President Association of Bank Customers, Dr Uju Ogunbunka, expressed shock over the CBN’s hasty decision.

 

Ogunbunka said, “I am surprised that the CBN is not waiting for the Supreme Court to take a decision as we have been told that they are slated to hear the issues that the three state governments presented to them.

 

“I don’t know what the haste is all about and yet we don’t have the new notes. If I don’t have the new notes and the old notes, I don’t know what I’m expected to do. I pray that Nigerians will be able to manage themselves so it doesn’t go beyond what we can control.

 

“The CBN is preparing for chaos, however, the association is ready to work with the CBN but the extant issues will keep lingering. Also, the institution does not seem organised on the strategy they intend to use. Nigeria is still a cash-dominant society, and the stage we are at is the stage of the availability of the new currency.’’

 

However, in defiance of the CBN directive, the Chairman of Senate Committee on Defence and Senator representing Sokoto North Senatorial District, Senator Aliyu Wamakko, has called on the people of the state to continue to use the old and new notes ‘’as there is no law that currently stops their usage.’’

 

Wamakko was speaking on Tuesday at his Gawon Nama residence shortly after returning back from Abuja for an official engagement.

 

The senator in a statement by his media aide, Bashar Abubakar, said the people should continue to spend the old naira notes pending the final decision by the authority concerned.

 

In a related development, the Kano State Government on Tuesday warned that it would not hesitate to revoke the operational licenses of any business which refused to accept the old naira notes as a means of transaction.

 

Governor Abdullahi Ganduje, who handed down the warning in a statement issued by the Kano State Commissioner for Information and Internal Affairs, Mallam Muhammad Garba, said the old notes remained legal tender.

 

According to him, the Supreme Court was emphatic on its interim injunction on the issue of old naira notes which would continue to be used as legal tender alongside the new ones until they are phased out.

 

Ganduje said, “It has come to the notice of the government that some business owners such as supermarkets, malls, banks, restaurants, hotels, traders in markets, filling stations, and motor parks, among others, are in the habit of rejecting the old naira notes in business transactions.”

 

Similarly, Ogun State governor, Dapo Abiodun, has threatened to shut down any commercial bank that refuses to accept the old naira notes in the state.

 

According to a statement by the Chief Press Secretary to the governor, Kunle Somorin, Abiodun said this on Tuesday, while addressing market men and women at Itoku Kampala market in Abeokuta, as part of his re-election campaign to Abeokuta North Local Government Area.

 

The state also disclosed that it had filed an application seeking to join Kaduna, Kogi and Zamfara and other states in the suit against the Federal Government on the demonetization policy.

 

The government in a motion of notice filed by its counsel, Afe Babalola and Co. on February 13, sought to be joined as the 4th plaintiff/applicant in the suit.

 

The statement read, “Listing 13 grounds upon which the application was predicated, the plaintiff submitted among others, that the implementation of the Federal Government-sanctioned policy has thus far negatively affected the citizens all over the federation which includes Ogun State, and left several residents of the state stranded, cash-strapped and frustrated leading to riots, grievous interruption of commercial activities, and a gradual economic downturn in the state.’’

 

Also, the Ondo State Government said it had instituted a fresh suit against the Federal Government and the CBN over the naira crisis.

 

The state Attorney General and Commissioner for Justice, Mr Charles Titiloye disclosed this while speaking with our correspondent on Tuesday.

 

He said although the state already joined the suit against the CBN on the issue of the deadline yet the state would file the fresh charge at the Supreme Court on Wednesday.

 

“I wonder where the CBN got the leverage to disregard the order of the supreme court. I think its an attempt to disrupt our democracy and governance in the country,” he added.

 

Worried by the adverse impact of the demonetization policy on the citizens, the Nasarawa State Governor, Abdullahi Sule, urged the CBN to extend the usage of the old notes till August.

 

Speaking during a meeting with All Progressives Congress stakeholders in Lafia on Tuesday, Sule expressed optimism that the Supreme Court would extend the time limit of the old notes by six months.

 

Reacting to the latest decision of the CBN, the Special Adviser Media and Publicity to Governor Ben Ayade, Christian Ita said it was contemptuous of the Supreme Court ruling.

 

’That is contemptuous of the court and we expect the Supreme Court to deal with that according to the rule of law when it reconvenes on the matter tomorrow (today),” Ita said.

 

Speaking in the same vein, Femi Falana, SAN, knocked the CBN for allegedly flouting the interim injunction of the Supreme Court.

 

Falana, during a live appearance on Channels tv’s ‘The 2023 Verdict’ on Tuesday, said, “In a country where the rule of law operates, once the Supreme Court has determined a matter or given an order, it is expected that all and sundry – everybody – will comply with the order.”

 

The SAN added that an example should be made of those flouting court orders, stressing that nobody should feel that they were above the law.

 

Another senior advocate of Nigeria, Babatunde Fashanu, said it was ridiculous for the CBN governor to declare that he stands on the February 10 deadline for the cash swap.

 

Meanwhile, findings show several bank customers across the country are set to storm CBN offices in state capitals across the country to deposit their old notes on Wednesday.

 

The move followed the central bank’s directive asking banks to stop the collection of old notes. The CBN had said Nigerians have seven days grace period to deposit their old notes at the CBN after the February 10 deadline.

(Daily Trust)