New cash policy will moderate inflation, stabilize exchange rate, strengthen naira – Emefiele
Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele on Tuesday disclosed that the new cash withdrawal limit policy has moderated inflation, will help in stabilizing exchange rate, strengthen naira, support activities of security agencies and reduce incidences of ransom taking in the country.
Emefiele who disclosed this during the fact-finding interactive session held at the instance of the House of Representatives’ Ad-hoc Committee on the review of the CBN cashless policy and extension of timeframe of the currency swap programme, argued that the collection of the old notes has successfully attained 75 percent implementation level at the hinterland, through the 30,000 super agents deployed by the apex bank, out the 1.5 million bank agents spread across the country.
While stressing that the new naira redesigned policy was in the overall interest of Nigerians, he assured that no Nigerian will lose money under the new naira design policy.
The CBN Governor who acknowledged that the new naira notes were being used at parties, affirmed that Deposit Money Banks erred by breaching certain aspects of the regulations of the new policy, hence the resolve to involve Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices and other Related Offences Commission (ICPC) and Nigeria Financial Intelligence Unit (NFIU) in the bid to ensure the flow of the new currencies.
In the bid to ensure effective implementation of the new policy, Mr. Emefiele maintained that the disbursement of the new naira notes can only be suspended through the ATMs in order to ensure equitable distribution of the redesigned currency.
Speaking on the ongoing efforts toward ensuring adequate control and monitoring of the currency in line with the CBN Act, 2007, he observed that in 2015 the currency in circulation which stood at N1.4 trillion, rose to N3.323 trillion as at October 2022, showing over 100 percent increase within a period of seven years.
He further noted that out of the N3.23 trillion, more than N2.37 trillion are outside the banks while more than N2.7 trillion were in people’s homes, adding that about N500 billion is seen in the banks before the implementation of the new cash policy.
He however observed that, with the implementation of the new curenxy policy, the apex bank has been able to collect N1.7 trillion out of the N2.7 trillion, leaving between N900 billion and N1 trillion yet to be recovered into the apex bank’s vault.
He said: “We are a happy so far the exercise has achieved over 75 per cent in our villages and the rest of them. So it is on the basis of that we saw that there are a few complaints in the villages and that is why we said, we will now give a 10-day extension for more of the currency to be collected and then do more disbursement. I want to make my last comment, subject to the CBN Act section 20 sub section 3 which state even after the old currency has lost its legal tender status that we are mandated to collect those monies and I stand with the House of Representatives on this.
“What does that mean? It would have lost its legal tender status, in this case we have moved on, but if have not been able to send it to the bank we certainly will give you the opportunity to bring them back into the CBN to redeem it. Either you pay into your bank account or you want to do exchange, we will give you your money, that is the assurance that I give Nigerians.
“I want to appeal this is not an easy exercise but we are happy that in 19 years we are able to carry out this important aspect of our mandate. We are grateful that we are doing this, we want to do this but we seek the support and cooperation of everybody, support and cooperation of Nigerians. At this initial stages there will be a few hitches, there will be a few hitches, we apologise.
“What I am trying to say is this, the overriding issues is to make the Nigerian economy stronger, make Nigerian economy better because that is what we owe Nigerians in the position that God has put us today and I will like to continue your support, that please you will allow this programme to succeed,” the CBN Governor said.
After the consideration of the recommendations of the Ad-hoc Committee chaired by Hon. Alhassan Ado-Doguwa, the House mandated the CBN Governor to submit weekly report on all the new naira notes released to the Deposit Money Banks (DMBs).
The House also mandated the CBN Governor to ensure further review of the new naira notes are available forthwith.
In the event of the persistence of the current situation, the CBN Governor should extend the deadline beyond February 10, 2023.
Speaking earlier at the interactive session, Hon. Ado-Doguwa said: “Our major concern is about the critical situation of the Nigerian economy. The concern of the House of Representatives is about the protection and guidance of what we call the rule of law under a democratic system.
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“This House by all standard has the constitutional right and by the operating rules and guidelines of the House, we also has the official power, the constitutional power to invite any agency of government, to interface with their officials about the policies of government because government is about good governance, good governance is about the livelihood of the people.
“What we think ordinarily is going to be in the best interest of the Nigerian man, I mean the common man on the street.
“This is one policy, I want to be very categorical, that has actually touched on the lives of our people, it has kick-started a lot of controversy, left right and centre nd we have seen that written on the faces of our people, so many people are not giving up 24 by seven to have access to the new naira notes. Economic activities, trading, in fact even online transfer has been shut down by this policy you brought about,” he noted.
While acknowledging that the House is in support of the cashless policy initiated by the apex bank, he noted that the House will see how we can partner with you on the policies that are good. But when policies are now coming up in the eye of too much storms in the face of the people, storming the economy, shutting agriculture, storming transportation and constituents crying out, then of course, we have moral obligation to seek clarifications from you.
“By the CBN Act, yes the Governor has the power to redesign the naira. Yes it’s your singular power and we must help you protect that power in the interest of the Nigerian people.
“However, one of the burning questions, is that yes you have the powers, yes you are protected by law to redesign the naira, why this time? This time because you cannot rule out this contemplation that we are facing when you are facing a general election, less than 30 days to an election you bring up this matter of this nature. Definitely people will ask questions.”