Naira redesign: Chaos in banks as Nigerians groan

 

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OBIORA IFOH, Abuja and
COMFORT EKELEME, Business Editor

Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed on Thursday, said the Federal Government and President Muhammadu Buhari are deeply concerned over the ongoing suffering of Nigerians caused by the Naira redesign and currency swap policy.

Ahmed, who stated this while fielding questions from journalists at the 65th Media Briefing organized by the Presidential Media Team, said the President shares in the pains being experienced by Nigerians in accessing the new Naira notes, but added that “it is a temporary pain which will fizzle out very soon”

Zainab, who likened the current situation being experienced by Nigerians to a “patient having a wound or deep sore” stated that “the patient must submit to an excruciating pain while undergoing iodine treatments.”

She said government is however pleased that a sizeable old funds have been mopped back into the banking system, which will in turn give the regulatory agencies control over the nation’s currencies.

This is coming amidst viral trending videos showing how frustrated customers are facing difficulties in accessing their money trapped in banks

Asked whether the government is actually worried over the development in the financial sector, the Minister said, “of course we are worried, we are not happy that citizens have to queue and struggle to get their cash but this is a temporary situation.

“Let me give you an analogy, this situation can be compared to a patient having a sore and while treating the sore, you must apply some iodine or spirit which is usually very painful.

“It is something that needs to be done at this time. But the Central Bank has been responsive in terms of providing some extension and also some explanation that before the closing date, it is not all over. There is still opportunities for citizens as provided for under Section 20(3) of CBN Act, for people to take their old currency to the CBN for redemption”

“Mr President is not happy that citizens are sufferring but come the closing date which the Central Bank of Nigeria has given, it will not all be over as a window still exist for people to return their old notes.

“There is also the positive side to it, which is that a lot of currency has been mopped up back into the system but it has achieved a big level of success, the only thing is the pain, which is regrettable and which is transient and temporary”

The Minister also expressed surprise over the latest Moody’s report on Nigeria, which down graded the long-term issuer rating of the Government of Nigeria to Caa1 from B3, and change in the outlook to stable, on January 27th, 2023.

“I want to also say that the Moody’s report or downgrade came as a surprise to us because we had presented all of the works that we have been doing in stabilizing the economy.

“But they are external rating agencies that don’t have the real understanding of what has happened at the domestic environment”

The international rating agency, Moody’s Investors Service, also downgraded nine Nigerian banks, following its downward review of Nigeria’s rating last week.

The downgraded banks include Access Bank Plc, Zenith Bank Plc, First Bank of Nigeria Limited, United Bank for Africa Plc, Guaranty Trust Bank Limited, Union Bank of Nigeria Plc, Fidelity Bank Plc, First City Monument Bank Limited, and Sterling Bank Plc.

She however, urged Nigerians to look forward to the S&P rating due for release in a few days, adding that “it is expected to present a better outlook for Nigeria”

Meanwhile, experts in the nation’s financial sector yesterday said the new directive to banks to commence the payment of the redesigned naira notes over the counter will show how the institution is committed to obeying regulator and availability of the notes.

The Central Bank of Nigeria (CBN) yesterday directed banks to commence the payment of the redesigned Naira notes over the counter to further ease off the stress Nigerians are currently facing to make withdrawals.

However, this is subject to a maximum daily payout limit of N20,000. Before now, the redesigned notes could only be paid through the Automated Teller Machines (ATMs).

A financial analyst who spoke to Daily Champion on the condition of anonymity maintained that some Nigerian banks were having liquidity issues before now.

Our source further noted that there is need for adequate regulations and sanctioning, adding that more mergers and acquisitions may be witnessed going further.

Also speaking, a Former President, Association of National Accountants of Nigeria (ANAN), Dr. Samuel Nzekwe told Daily Champion that part of the problems seen was as a result of inadequate regulations.

He however, said that the CBN meant well for Nigerians, stressing that this process should be made seamless.

Interestingly, the CBN has vowed to go after sellers and abusers of the Naira, stating that they shall be prosecuted by the apex bank, the police, and other agencies.

Godwin Emefiele, CBN governor in a statement signed by Osita Nwanisobi Director, Corporate Communications on Thursday also urged Nigerians to exercise patience as the CBN is working assiduously to address the challenge of queues at ATMs.

“The Central Bank of Nigeria (CBN) has observed, with grave concern, the activities of persons who sell the newly redesigned banknotes and those who flagrantly abuse the legal tender by hurling wads of Naira notes in the air and stamping on the currency at social functions.

“We have equally noticed the queues at Automated Teller Machines (ATMs) across the country and an upward trend in the cases of people stocking and aggregating the newly introduced banknotes they serially obtain from ATMs for reasons best known to them.

“Also worrisome are the reported cases of unregistered persons and non-bank officials swapping banknotes for members of the public, purportedly on behalf of the CBN.

“We wish to state unequivocally that, contrary to the practice of these unpatriotic persons, it is unlawful to sell the Naira, hurl (spray), or stamp on the currency under any circumstance whatsoever. For the avoidance of doubt, Section 21(3) of the Central Bank of Nigeria Act 2007 (As amended) stipulates that “spraying of, dancing or matching on the Naira or any note issued by the Bank during social occasions or otherwise howsoever shall constitute an abuse and defacing of the Naira or such note and shall be punishable under the law by fines or imprisonment or both.

“Similarly, Section 21(4) states that “It shall also be an offence punishable under Sub-section (1) of this section for any person to hawk, sell or otherwise trade in the Naira notes, coins or any other note issued by the Bank.”

“Accordingly, the Central Bank of Nigeria (CBN) is collaborating with the Nigeria Police, Federal Inland Revenue Service (FIRS), the Economic and Financial Crimes Commission (EFCC), and the Nigerian Financial Intelligence Unit (NFIU) to address the unpatriotic practice. We, therefore, warn Nigerians, particularly those at social functions such as birthdays, weddings, and funerals, to desist from disrespecting the Naira or risk being arrested by law enforcement agencies.

“While reiterating our commitment to Nigerians to ensure the effective distribution of the newly introduced Naira banknotes, we urge them to exercise patience as the CBN is working assiduously to address the challenge of queues at ATMs.

“In line with this resolve, the governor, Mr. Godwin Emefiele, has directed deposit money banks (DMBs) to commence the payment of the redesigned Naira notes over the counter, subject to a maximum daily payout limit of N20,000.

“We also admonish members of the public to embrace and adopt other payment channels for their transactions. The Naira is our legal tender and symbol of national pride. Therefore, let us respect it and handle it with care,” he said.

Meanwhile, Dr. Rabiu Musa Kwankwaso, presidential candidate of the New Nigeria Peoples Party (NNPP), has said that the Central Bank of Nigeria (CBN)’s latest policy allegedly targeting politicians was a waste of time.

He said that all the big time politicians, particularly, the presidential candidates either had controlling shares in the big banks or have friends in those banks who can help them mobilise whatever amount of money they needed.
He further said that no bank operating in any state would refuse to give money to its host, adding that the CBN was just punishing innocent poor Nigerians.
Kwankwaso, who spoke on the Channels Television’s Sunrise Daily programme Thursday, said: “Why should a Nigerian unnecessarily inflict this kind of pain on people who are already suffering.”
He further said that the CBN should have given enough time and that the implementation should have been done step by step.
Debunking the claim by the Presidential Candidate of the Peoples Democratic Party (PDP), Atiku Abubakar that he was in talks with Kwankwaso, the NNPP candidate accused the PDP and the All Progressives Congress (APC) of revelling in propaganda and lies.
He said that he never discussed with Atiku about any merger and had never even met with Atiku one-on-one since he left PDP.
“I do not know why people are telling lies. Integrity matters a lot. His people are not talking to my people and my people are not talking to his people. To say that I am talking to APC or PDP is not true. We don’t intend to talk to anybody between now and the election. Let everybody go and fight it out. We will win this election.

“We are the only party that understands the suffering of our people. We do not have as much money as some others who believe in throwing money about to deceive the people. We are credible. We are well prepared. The outcome of the election will shock people,” Kwankwaso said.