Naira Scarcity: Central Bank Has Nearly Collapsed Trade In Nigeria, House Of Reps Speaker, Gbajabiamila

Femi Gbajabiamila, the Speaker of the House of Representatives, has slammed the Central Bank of Nigeria (CBN).

He berated the CBN over the ongoing crisis and hardship orchestrated by the Naira redesign policy, saying that the apex bank has failed woefully in its statutory obligation to Nigerians.

The House Speaker who had earlier threatened to order the arrest of the CBN Governor, Godwin Emefiele, over failure to honour the House invitation to explain the Naira redesign, in a statement he personally signed and issued on Thursday, said that the CBN has particularly failed in its statutory obligation to pay the face value of the recalled currency in the form that is useful to the citizens whose current suffering could have been avoided.

Gbajabiamila’s statement came a few hours after President Muhammadu Buhari’s national broadcast where he extended the validity of the old N200 till April 10, a period of 60 days, while retaining February 10 as the deadline for the old N500 and N1,000 as legal tender in the country.

The House Speaker lamented, “Today, citizens and visitors are experiencing grave and unnecessary hardship across our country. They spend hours and days queuing at banks and teller machines to receive stipends of their own money to afford life's necessities.”

According to him, “This situation is a consequence of the flawed implementation of the naira redesign policy by the Central Bank of Nigeria (CBN). It is also the result of decisions made by the Central Bank's Governor, Mr Godwin Emefiele, to refuse counsel, be guided by precedent or abide by the decisions of superior courts.”

He said that “Section 203 of the Central Bank of Nigeria Act, 2007 provides the statutory authority for the Central Bank of Nigeria to initiate and implement policies for the recall of Nigerian currency. The extant provision is reproduced below:

“Notwithstanding subsections (1) and (2) of this section, the Bank shall have power, if directed to do so by the President and after giving reasonable notice in that behalf, to call in any of its notes or coins on payment of the face value thereof and any note or coin with respect to which a notice has been given under this subsection, shall, on the expiration of such notice cease to be legal tender, but, subject to section 22 of this Act, shall be redeemed by the Bank upon demand.”

Gbajabiamila explained that there are three conditions precedent for the CBN to recall existing Naira notes, saying that the first condition is that the permission of the President must be obtained. The second condition is that reasonable notice shall be given and the third condition is that the CBN shall pay the face value of the recalled currency upon receipt.

“Whereas reasonable people may disagree as to whether sufficient notice was given for the implementation of this policy, it is evident that the Central Bank of Nigeria (CBN) has failed woefully in its statutory obligation to pay the face value of the recalled currency in the form that is useful to the citizens whose current suffering could have been avoided.

“The scarcity of cash is happening because the Central Bank of Nigeria (CBN) did not sufficiently replace the old currency it pulled out of circulation across the country. This created an artificial scarcity that put significant additional pressure on the already epileptic electronic banking channels, resulting in a near-complete collapse of trade in the country.

“Businesses cannot operate because neither they nor their customers have access to cash, and electronic banking platforms appear to have uniformly collapsed. It is unclear what interest is served by persisting in this erroneous course towards an unfolding economic disaster that the country cannot afford. The ongoing devastation of livelihoods is bound to have consequences long after this moment has passed.

“It is disheartening that the Central Bank of Nigeria (CBN) has resolutely refused to admit error and change course in the face of mounting evidence that the implementation of this policy has been a devastating failure.”

“It is deeply troubling that neither the intervention of the National Council of State nor an order of the Supreme Court is sufficient to cause the Governor of the Central Bank of Nigeria (CBN) to review the decisions that have brought us to this entirely avoidable moment,” he said.

On President Buhari’s speech upholding only the validity of the old N200 note, the House Speaker said, “This is a step in the right direction, and I hope it helps curb Nigerians' suffering. However, the decision still falls short of the order of the Supreme Court that the old currencies remain legal tender pending the adjudication of a pending suit brought by state governments on the legality of the policy and its implementation.

“It is not to the benefit of our country for the Federal Government to act in ways that suggest a wanton disregard for the rule of law. It will be better for us to strictly adhere to the court's order in this matter pending the adjudication of the substantive suit.”