The Nigeria Governors’ Forum (NGF) has blasted the Central Bank of Nigeria (CBN) on the implementation of the currency redesign policy describing it as a currency confiscation program, not currency exchange policy envisaged in S.20(3) of the CBN Act, 2007.
This was contained in a communique read by the Forum’s Chairman and Governor of Sokoto state, Aminu Waziri Tambuwal immediately after their meeting in Abuja, on Saturday.
The NGF also accuses the CBN for failing to consider some factors such as the informal economy, population size, nominal GDP and inflation among others before implementing the policy.
While calling on the CBN and federal government to “listen to the voice of reason”, the members of the Forum comprising all the 36 state Governors have all agreed to direct the Attorneys General of their respective states to review and join the Supreme Court case filled by some of their colleagues with a view for seeking legal reliefs.
READ THE FULL TEXT OF THE COMMUNIQUE BELOW:
We, members of the Nigeria Governors’ Forum (NGF), at our meeting today discussed critical issues of national interests and resolved as follows:
1. First, we express our sympathies and support with Nigerians who are experiencing great
difficulties under the current CBN Naira re-design and cash withdrawal restrictions policy.
We feel your pain and we are determined to employ all legitimate channels to ease the
situation.
2. It has become necessary to make a distinction between the Central Bank of Nigeria (CBN) Naira redesign policy backed by Section 20 (3) of the CBN Act, 2007 and the aspirational
policy of going cashless, both of which are mutually exclusive at this time.
3. It is our considered view that what the CBN is at present pursuing is a currency confiscation
programme, not the currency exchange policy envisaged under S20(3) of the CBN Act,
2007. Currency confiscation in the sense that the liquidity provided to the general public is
grossly insufficient due to the restrictions placed on the amount that can be withdrawn
regardless of the amount deposited.
4. The current approach of the CBN raises concerns about the respect for the civil liberties
and rights of Nigerians as it relates to their freedom to use legitimately earned income as
they so wish.
5. The Forum believes that to deploy a cashless policy and deepen digital transactions, the
best practice around the world is to create a suite of incentives to attract customers; rather
than a draconian approach as we have witnessed in the last three months.
6. The argument by the CBN for what it describes as the astronomical increase in the currency in circulation as the basis for this policy is not supported by its own data. According to the CBN, the currency in circulation increased from N1.4 trillion in 2015 to N3.23 trillion in October 2022. The Bank appears not to have taken into consideration the increase in the size of the country’s nominal GDP over this period, the doubling of consumer prices, rising population, and the impact of the humongous Ways & Means advances to the federal government by the Central Bank of Nigeria over this period.
7. In the circumstances, it is safe to draw either of two conclusions – the CBN data may be
incomplete or in fact, Nigerians may have done exceptionally well in the transition to a
cashless economy.
8. In addition, considering the sizeable informal sector in the nation, the amount of banknotes
created in exchange so far by the CBN implies it vastly underestimated the economy’s actual cash needs. The inability to use the new notes has had far-reaching economic effects, leading to the emergence of the Naira black market, severe food inflation, variable commodities prices based on the method of exchange,and long queues as well as crowds around Automated Teller Machines (ATMs) and banking halls across the country with
individuals hoping to get a fraction of their money in new notes to meet their daily
livelihood. The country runs the risk of a CBN-induced recession.
9. While we acknowledge the submission of the Attorney General of the Federation that the
Federal Government will comply with the ruling of the Supreme Court which calls for the
halting of CBN’s plan to end the use of the old currency notes, we are yet to observe
changes in the financial system.
10. Consequently, we call on the Federal Government and the CBN to respect the Rule of Law and listen to the voice of reason expressed by Nigerians and several other stakeholders
including the Council of State, before the damage to our economy becomes too great to fix by the next administration.
11. Members rose from the meeting agreeing to direct their Attorneys General to review the
suit at the Supreme Court with a view to consolidating the legal reliefs pursued by States.
Rt. Hon. Aminu Waziri Tambuwal
Chairman, Nigeria Governors’ Forum
11th February 2023
