Agreed that serious efforts are being made on economic reforms, yet even by Central Bank of Nigeria (CBN’s) own account the nation is still in financial crisis.
The country is faced with the challenges of how to address poverty, rising inflation, and unemployment amongst others. The solution to the current crisis which was inherited from the previous regime is a puzzle only the CBN as a regulator and the Bankers Committee can resolve.
For long the Bankers Forum has taken Nigeria and Nigerians for granted by putting the profit they make first before the survival of the nation.
In 2014 when the Harvard trained commercial banker, Godwin Emefiele was to be appointed the CBN Governor, I was vehement in my objection to his appointment, not out of any private malice but because of his background as a commercial banker who rose the ranks to the position of Managing Director/Chief Executive of one of the biggest banks in Nigeria – a position that made him a full blood member of the financial mafia and bandit club, a group that specialises in aggressive rigging of the forex market and monetary policy collision to generate profit from nothing other than speculative currency trading and other underhand means.
I was emphatic then that Emefiele, being a product of the Bankers Forum, will not be able to regulate the banks. He is part and parcel of the swamp.
That advice was ignored as the then fading Jonathan’s administration went ahead to appoint him as the CBN’s Governor and he served up till 2023 to become one of the longest serving CBN Governor.
From 2014 -2023, the Bankers’ Forum hijacked the soul of the CBN. Everything that should go wrong went wrong. There were exchange rate manipulations, round-tripping and many other sharp practices of which CBN’s insiders were aware but did nothing to fix.
Today, Emefiele is embarrassingly standing trial for abuse of office, economic sabotage and corrupt enrichment. The only CBN Governor in the history of Nigeria to be disgraced out of office.
Nigeria is still reeling from the pains of his poor leadership of the financial sector, and Cardoso has the unfortunate duty to right the wrongs, and this will include following through with the decision to withdraw the old currency from circulation and ensuring customers have access to their deposits.
We are in a season where people need cash to give to their dependents and yet cannot do that because the banks are hoarding the naira which they sell to politicians, POS operators and currency hawkers.
It is common to see some big boys throwing bundles of the new naira notes at events whereas the ordinary citizen cannot access as much as N30, 000 from the banks.
Hoarding and eventual hawking of the naira notes has become a regular practice. While the digital economy is encouraged, we must acknowledge the fact that not every Nigerian has access to electronic money transfer and as such the culture of having cash at hand cannot be totally eliminated.
The rural farmers and the illiterate grandmother in the villages need cash to transact their daily needs, likewise the vulnerable groups.
CBN has a core mandate to ensure the availability of legal tender notes to those that deserve it. The inability of the CBN to fulfil its core mandate will not only increase the sufferings of the people but will increase people’s hatred and distrust against the government, people in government and government institutions.
To curb the nuisance created by those that hoard the naira, the CBN recently threatened to penalise banks found to be involved in illegal scarcity of funds as bank customers cannot access funds. The CBN has also introduced new measures to hold banks accountable for the improper handling of mint banknotes.
Recall that the CBN and the EFCC had successfully prosecuted some celebrity individuals for abuse of the naira. As Nigeria approaches the yuletide season, the CBN has reaffirmed its commitment to combating currency hawking and ensuring responsible cash disbursement.
The inability of the CBN to fulfil its core mandate will not only increase the sufferings of the people but will increase people’s hatred and distrust against the government, people in government and government institutions
The CBN’s mystery shopping exercise and spot checks on Deposit Money Banks (DMBs) aim to prevent mint banknotes from falling into the wrong hands, thereby safeguarding the integrity of the naira.
Currency hawking, the illicit sale of mint banknotes, undermines Nigeria’s economy, fuels inflation, and disparages the naira’s value. These nefarious activities thrive on the exploitation of vulnerable citizens who suffer undue exploitation.
To combat currency hawking, the CBN has introduced stringent proactive measures which if followed through will help in restoring back faith in the naira. Some of the CBN’s measures include: Mystery Shopping Exercise:
That is unannounced inspections of DMBs to monitor cash disbursement practices; Spot Checks: Regular audits to detect and prevent cash hoarding and diversion;
Penalties: DMBs found complicit in currency hawking will face penalties of 10% of withdrawn cash, with incremental 5% penalties for repeat offenses; Collaboration with Law Enforcement:
Joint efforts to monitor and enforce responsible cash distribution. There are school thoughts that believe that the biggest sabotage of the CBNs policies are the commercial banks.
This notion has been expressed in many quarters and it is depressing because the banks ought to be the major partners of CBN. DMBs are critical stakeholders in the fight against currency hawking.
To support the CBN’s initiatives, banks must implement internal controls to prevent cash hoarding and diversion, prioritise ATM distribution, ensure ATMs are well-stocked and functioning efficiently, providing convenient, secure, and accessible cash distribution channels. Moving forward, the new CBN measures require citizens’ support to succeed. All stakeholders must collaborate.
Citizens should be able to see something wrong and say something about the banks using the dedicated complaint channels. They should report suspicious activities and support CBN in their quest for responsible disbursement. Law Enforcement agencies like the police and EFCC should intensify efforts to apprehend and prosecute currency hawkers.
DMBs should strictly adhere to CBN guidelines and prioritise customer convenience. Many a time lack of compliance to rules are due to lack of fear of consequences for non-compliance.
It is left for the CBN to either bark without biting or to bark and bite. I believe the apex bank must be able to bark and bite where and when necessary.
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