Champion Newspapers Limited
For a better society

Currency swap: Knocks,  kudos as CBN extend deadline by 10 days

.N100trn of GDP at risk, former LCCI DG, Yusuf raises alarm .'Extension grossly inadequate' House of Reps C'ttee rejects extension .75 per cent of old notes collected, says Emefiele, vows to sanction banks ‘selling’ new notes

40
Print Friendly, PDF & Email

Obiora Ifoh, Abuja  and COMFORT EKELEME

 

Mixed reactions  have trailed the Central Bank of Nigeria (CBN)  extension of the deadline for collection of old naira notes by 10 days.

Some Nigerians who spoke in separate interviews with the News Agency of Nigeria (NAN)on Sunday in Lagos, commended the CBN for the extension, while others said that it could  also lead to a situation where government policies might not be taken seriously in the future.

According to them, the extension is a good decision because it affords some Nigerians, who are yet to deposit their old naira notes, the opportunity to do so.

The CBN Governor, Mr Godwin Emefiele, said that the apex bank sought and obtained the approval of President Muhammadu Buhari, to extend the deadline to Feb. 10.

The governor said aside those holding illicit/stolen funds in their homes for speculative purposes, the aim of the extension was to give Nigerians that have naira legitimately earned and trapped, the opportunity to deposit their legitimately trapped monies at the CBN for exchange.

CBN had earlier given Jan. 31, as deadline for people to deposit the old notes in their possession in banks.

Mr Ukaegbu Ndukwe, a software programmer, said the extension by 10 days would give the masses few days of grace to return old notes in their possession to the bank.

“The date is fair, so long it doesn’t get extended to the election date as it might affect the free and fair electoral process in terms of vote buying.

“Most of the people clamouring for this extension may have in their possession hoarded old naira notes and might intentionally want to use this notes for vote buying,” he said.

Mr Michael Akpan, a businessman, said he did not expect the apex bank to give in to pressures by politicians to extend the Jan. 31 deadline.
“I will say it’s okay since it’s not after the elections, but government should learn to stand by its words,” he said.

Mrs Obot Ntuen, a secondary school teacher in Okota, told NAN that she was not happy with the extension.

“I’m not happy with the extention, reason being that Nigerians will not take policy makers and government serious and they will not be law abiding.

“Except there is a good reason for the extension, policy makers should learn to be firm with their policy making.

“It should not be further extended to avoid lawlessness,” Ntuen said.

Prof. Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research (CEPAR), University of Lagos, urged the apex bank not to further extend the deadline beyond Feb. 10.

“Ideally, there wouldn’t have been any need for the extension of the deadline of the old currency beyond Jan. 31, if not for the lackadaisical attitude of the CBN in the implementation of the change, since October 2022.

“It was wrong to still be issuing payments with the old notes through the ATMs even in the few past weeks.

“Why should people pay in their old notes to the banks only to be reissued the same old notes via the ATMs.

“However, the extension will allow the CBN to correct its mistakes and thus instruct the deposit money banks to issue only the new notes, henceforth.

“On no occasion should there be any further extensions beyond Feb. 10, to allay the fears of many that any extensions could encourage vote buying during the forthcoming general elections in February and March,” Ndubisi said.

Meanwhile, the Centre for the Promotion of Private Enterprise (CPPE) has said that the extension of the deadline by the Central Bank of Nigeria (CBN) for Nigerians to change their old N200, N500 and N1,000 notes to new ones, is grossly inadequate.

 

President Mohammadu Buhari Sunday approved for extension of the deadline by 10 days.

 

Dr Muda Yusuf, Director at CPPE, stated this in a statement made available  on Sunday the failure to extend the deadline for the currency swap could put N100 trillion component of the national Gross Domestic Product (GDP) at risk.

 

“Just got the news that the deadline for the currency swap has been extended by 10 days.  CPPE believes that 10 days is grossly inadequate to make up for the glaring shortcomings of the apex bank in this process.” he said.

 

He noted that two critical sectors are particularly vulnerable – Trade and Commerce; and Agriculture.

 

“The crippling of business transactions at the distributive trade end amid the currency swap crisis would not only undermine the trade and agricultural sectors but would have a knock-on effect on the manufacturing value chain and the services sectors. This is because whatever is produced has to be sold.

 

“The trading end of the chain has been greatly disrupted by this currency swap crisis.

 

 

“The trade sector contributes about 14% of GDP valued at an estimated N35 trillion; the agricultural sector contributes 25%, valued at an estimated N62 trillion.  Most of the activities in these sectors are either in the rural areas or in the informal sector of the economy.

 

“These are the sectors that have been driving the resilience of the Nigerian economy amid numerous domestic and global headwinds.

 

“Any policy measure that would negatively disrupt these sectors should be avoided,” Yusuf further stated.

 

According to him, “the argument that currency swap would enhance monetary policy effectiveness and curb inflation has no strong basis in economic theory.  The money supply is a more critical variable in the inflation equation”.

 

 

Similarly, Doguwa, who is the House Committee chair, said the CBN governor must appear before the Committee or stand the risk of being arrested

 

The CBN governor, Godwin Emefiele, on Sunday, said President Muhammadu Buhari gave permission for the deadline to be extended to February 10.

 

In its swift reaction, the adhoc committee, chaired by the leader of the House, Hon. Alhassan Ado Doguwa, rejected the extension, insisting that the CBN must comply with sections 20 sub 3, 4, and 5 of the CBN act.

 

Recall the House, during its sitting on Tuesday, following the outcry by Nigerians, constituted the ad hoc committee to look into the issue.

 

Doguwa said; “The 10-day extension for the exchange of the old naira notes is not the solution: We as a legislative committee with a constitutional mandate of the house, would only accept clear compliance with section 20 sub 3, 4, and 5 of the CBN act and nothing more.

 

“Nigeria as a developing economy and a nascent democracy must respect the principle of the rule of law. And the House would go ahead to sign arrest warrant to compel the CBN Governor to appear before the Adhoc committee.”

 

He said under his chairmanship, the committee would continue its work until it gets the demands of Nigerians addressed in accordance with the laws of the land.

 

Describing the extension as a mere political gimmick to further deceive Nigerians and worsen their economic and social livelihood, Doguwa said the CBN governor must appear before the Committee or stand the risk of being arrested on the strength of legislative writs signed by Hon. Speaker on Monday.

 

He also said the policy is capable of frustrating the forthcoming general elections.

 

“Security agencies and their operations especially at the states level are generally funded through cash advances and direct table payments of allowances to operatives during elections,” he said.

However, The Central Bank CBN governor, Godwin Emefiele, has disclosed that 75 per cent old notes have now been collected, even as he vows to sanction banks ‘selling’ new notes

 

The CBN governor spoke to State House correspondents shortly after he met the President in his country home in Daura, Katsina State, on Sunday.

He disclosed that 75 per cent of the N2.7tn held outside the banking system had been recovered.

The governor said, “We are happy that so far, the exercise has achieved a success rate of over 75 per cent of the N2.7tn held outside the banking system. Nigerians in the rural areas, villages, the aged and vulnerable have had the opportunity to swap their old notes; leveraging the Agent Naira Swap initiative as well as the CBN senior staff nationwide sensitisation team exercise.

“Aside from those holding illicit/stolen naira in their homes for speculative purposes, we do aim to give all Nigerians that have naira legitimately earned and trapped, the opportunity to deposit their legitimately trapped monies at the CBN for exchange.

“Based on the foregoing, we have sought and obtained Mr President’s approval for the following: 10-day extension of the deadline from January 31, 2023, to February 10, 2023; to legitimately held by Nigerians and achieve more success in cash swap in our rural communities after which all old notes outside the CBN losses their Legal tender Status.

“Our CBN staff currently on mass mobilisation and monitoring together with officials of the EFCC and ICPC will work together to achieve these objectives. A seven-day grace period, beginning on February 10 to February 17,2023, in compliance with Sections 20(3) and 22 of the CBN Act allowing Nigerians to deposit their old notes at the CBN after the February deadline when the old currency would have lost its Legal Tender status.

“We therefore appeal to all Nigerians to work with the Central Bank of Nigeria to ensure a hitch free the implementation of this very important process for program.”

Emefiele also vowed that Nigerians found selling, abusing or spraying the new naira notes at public functions will be “sanctioned” by the Economic and Financial Crimes Commission.

He said with each note having a unique number, abused currencies can now be tracked to their users.

“For those involved in this, even if they are CBN staff members, they will be sanctioned. We will track them. Luckily, those new naira notes have trackers, we have their numbers because they have been issued.

“Once we see these numbers, we will track them and we will make public those that are involved in this business of selling new naira. Whereas, there are people who are suffering in the villages that need those new notes, we will deal with them.

“We have passed on a few videos to the EFCC and they are going to track these people. It’s not about the CBN tracking them. It’s about the EFCC or the ICPC and independent enforcement institutions to go after them,” he said.

 

It could be recalled that President Muhammadu Buhari has approved the Central Bank of Nigeria’s (CBN) request for the extension of the deadline for swapping of old Naira notes to the redesigned ones.

 

The new deadline is January 31, 2023, to February 10, 2023.

 

A seven-day grace period, beginning on February 10 to February 17, 2023, has also been approved to enable Nigerians to deposit their old notes at the CBN after the February deadline when the old currency would have lost its Legal Tender status.

 

This followed the President’s meeting with the apex bank’s governor, Godwin Emefiele, in his country home in Daura, Katsina State on Sunday.

 

Emefiele briefed correspondents after the meeting, revealing that 75 percent of the N2.7 trillion held outside the banking system has been recovered.

 

He said: “We are happy that so far, the exercise has achieved a success rate of over 75 percent of the N2.7 trillion held outside the banking system. Nigerians in the rural areas, villages, the aged and vulnerable have had the opportunity to swap their old notes; leveraging the Agent Naira Swap initiative as well as the CBN Senior staff nationwide sensitization team exercise.

 

“Aside from those holding illicit/stolen Naira in their homes for speculative purposes, we do aim to give all Nigerians that have Naira legitimately earned and trapped, the opportunity to deposit

their legitimately trapped monies at the CBN for exchange.

 

“Based on the foregoing, we have sought and obtained Mr President’s approval for the following:

 

“10-day extension of the deadline from

January 31, 2023, to February 10, 2023; to legitimately held by Nigerians and achieve more success in cash swap in our rural communities after which all old notes outside the CBN losses their Legal tender Status.

 

“Our CBN staff currently on mass mobilization and monitoring together with officials of the EFCC and ICPC will work together to achieve these objectives.

 

“A 7-day grace period, beginning on February 10 to February 17,2023, in

compliance with Sections 20(3) and 22 of the CBN Act allowing Nigerians to deposit their old notes at the CBN after the February deadline when the old

currency would have lost its Legal Tender status.

 

“We therefore appeal to all Nigerians to work with the Central Bank of Nigeria to ensure a hitch free the implementation of this very important process for program.”

 

Comments are closed.