The Chief Executive Officer of the Centre for Promotion of Private Enterprises (CPPE), Muda Yusuf has condemned the Central Bank of Nigeria (CBN)’s plan to redesign naira notes.
He made the condemnation during an interview on Channels Television, which was monitored by TNC.
The CBN had on Wednesday, said it would release redesigned Naira notes by December 15, 2022.
Governor of the bank, Godwin Emefiele, who announced this during a press briefing in Abuja, said the existing notes would seize to be regarded as legal tender by January 31, 2023.
Emefiele said that it is worrisome that 85 per cent of the currency in circulation is being hoarded by Nigerians.
The apex bank governor added that the redesigning of the naira notes would help to curb counterfeit notes, as well as hamper ramson payment to terrorists and kidnappers.
Reacting to the plan of the CBN, Yusuf, who is also the immediate past Director General of the Lagos Chamber of Commerce and Industry, said he was surprised by the plan of the apex bank.
He noted that they are pressing issues he expected the bank to be addressing and not this which he described as “a very big distraction, so unnecessary and it’s going to be a waste of resources.”
“I was surprised because they are more important issues which I expect the CBN to be addressing,” he said.
“Only recently Nigeria was downgraded by Moody’s from B2 to B3 on account of weak financial situations domestically and externally. And of course, there are also other issues around foreign exchange. We all know what the challenges the investors have been facing, you know what is happening to the manufacturers, to airlines and all of that, sometimes even very embarrassing situations around the foreign exchange, and of course, issues of credit, issues of high inflation. These, for me, are much more important and burning issues, which I expect to engage the attention of policymakers.”
He faulted the reasons cited by the CBN for this proposed plan.
“You see all the issues outlined there as the objectives or the purpose of this plan to redesign the currency, I can’t find any connection between the act of redesigning the currency and these objectives.
“You are talking about hoarding the currency. What’s the proof that if you redesign, people will not hoard the new notes? You talking about the fact that people are also hoarding the new notes, you need to go to event centres around here in Lagos, the new notes that you don’t find in the banks, you find them in event centres, people are hawking them, where are they coming from? Are they not coming from the banks?
“And in terms of policy, the issue of currency manipulation or redesigning has no impact on monetary policy. Currency as a proportion of the money supply is less than 7 per cent.
“The total value of the currency you have in the economy is about 3.3 trillion, and the total money supply is about 48 trillion, so how will redesign the currency impact policy? There is no connection at all. I don’t see this achieving any of these objectives. It’s just a very big distraction. It’s going to impose a lot of costs on the economy. Because this is not going to be cheap. We are talking about printing 3.3 trillion currency notes. That’s a lot. Then you talk about the logistics, this is a very big country, how are you going to navigate all of that with many of the local governments not having one or two branches of banks?
“Then we have all these issues of flooding, connectivity problem, you have an election coming up. How are we going to deal with this? And we are dealing with these on a space of one and half months to deal with all of these.”
Asked whether this plan by the CBN will cause panic in the country, Yusuf responded in the affirmative.
“It’s going to cause panic, it’s going to cause a lot of dislocation and my advice is that we need to just retrace our steps on this because I am not seeing any value. This is going to create a lot of confusion, we have so many people in many remote villages where there are no banks, what will happen to their currency?
“You design for a purpose and you also need to situate policies within the framework of your priorities. I mean, talk to any Nigerian talk to any investor, this is the least of the problems we have in this economy. So I don’t think this is the way to go and in any case, in terms of electronic payments, we are already doing very well.
“Electronic payments the first seven months of this year. Electronic payments were over 200 trillion transactions that took place on the electronic platform. POS platform over 6 trillion, mobile transfer over 9 trillion, I mean these are the things we should be improving and consolidating upon. This is a very big distraction. It’s so unnecessary and it’s going to be a waste of resources.”