What Obasanjo Told Buhari Over Naira Redesign, Scarcity – Presidency

By Femi Adesina

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It is most likely the last Council of State meeting to be chaired by Muhammadu Buhari as President, and it held on February 10, 2023, at State House, Abuja.

It was a hybrid meeting, with some attendees physically present, and others online. Former Presidents/Heads of State on parade included Gen Yakubu Gowon, Olusegun Obasanjo, Abdulsalami Abubakar, and Goodluck Jonathan.

There were two former Chief Justices of the Federation, Modibo Alfa Belgore, Mahmud Mohammed, and almost all the Governors of the States, either virtually, or physically.

There were two critical issues on the agenda. The forthcoming general elections, the redesigned naira notes, and the implementation hiccups.

On hand to brief the Council were Chairman of the Independent National Electoral Commission (INEC), Professor Mahmood Yakubu, the Inspector General of Police, Usman Alkali Baba, and Governor of the Central Bank, Godwin Emefiele.

Prof Yakubu gave comprehensive briefing on preparations for the elections, status of voter registration and Permanent Voters Cards, expansion of voter access to polling booths, and the challenges before the exercise. And what are those?

Insecurity, attacks on INEC facilities, particularly in the South-east, campaign violence, campaign finance and vote buying, electoral litigation and adjudication, prosecution of electoral offenses, fuel scarcity, and the currency situation, among others.

But despite the litany of challenges, the INEC Chairman was upbeat. His words:

“The Commission is committed to conducting free, fair and credible elections…As far as we are concerned, we are ready to proceed with the elections as scheduled.”

Almost all members of Council who spoke had kind words for INEC.

The Police. IGP Alkali Baba also briefed, dwelling on state of preparedness for the elections. According to him, the current internal security situation in the country has implications for the 2023 elections.

He gave the challenges as banditry/terrorism, activities of separatists, illegal small arms and light weapons, cyber crimes, kidnapping, armed robbery, cultism, piracy, illegal oil bunkering, and political thuggery.

Others are; targeted attacks on INEC facilities, hate speeches, delayed release of funding, fuel scarcity, and uncertainties surrounding the currency swap policy.

The IGP concluded: “In line with Mr President’s charge, personnel of the Nigerian Police under my watch will remain professional, apolitical, firm, and unbiased in the delivery of their election security tasks.”

Commendations for the Police, too.

Then to the biggest issue. Naira redesign and the attendant implementation problems.

Mr Godwin Emefiele, CBN Governor, painted graphic picture of where we were before the policy announcement, where we desire to be at the end of the implementation, and the key benefits expected from effective implementation of the redesign policy.

According to the Governor:

*The difficulty being experienced with the policy is transient, given the ultimate gain to our country.

*There are unscrupulous and unpatriotic elements among bankers, “whose greed and malevolence are sabotaging the CBN’s efforts.”

*The policy is not targeted at anyone or group of persons, but rather derived from analysis to strengthen our macroeconomic fundamentals and better our socio-economic conditions.

*The general practice across the globe is for central banks to redesign national currency within 5-8 years, but Nigeria has not done for over 19 years.

What are the aims of the policy? Said Emefiele: to make monetary policy more efficacious, increase financial inclusion, support security agencies to combat banditry and ransom-taking, and curb corruption.

Then this rather alarming disclosure. In 2015, Currency-in-Circulation was only N1.4 trillion, but by October 2022, it had risen to N3.23 trillion, out of which only N500 billion was within the banking system, and N2,7 trillion held permanently in people’s homes. Such notes are then not available for economic activities.

He said the optimal value of currency in circulation for the Nigerian economy should be about N700 billion, but we had over three trillion.

“So far, since the commencement of this program, we have collected about N2.1 trillion, leaving us with about N900 billion,” the Governor said, adding: “We are happy that so far, the exercise has achieved a success rate of over 80 percent as about N2.7 trillion held outside the banking system has been returned. Nigerians in rural areas have had opportunities to swap their old notes, leveraging on the Agent Naira Swap initiative as well as the CBN Senior Staff nationwide sensitization team exercise.”

What are the general benefits of the policy? The Governor said it would reduce the amount of cash in the underground or illicit economy, truncate the activities of racketeers, and obliterate rent-seeking businesses in the black market. It will also reduce inflation, enhance stability of the naira exchange rate,

But why the endless queue and pressure round the country? The apex bank boss said it was due to hoarding of new naira notes, tension and elevated agitation, panic, mop up of notes by some politicians, and incidences of economic opportunism.

He concluded this way: “The advantages of the currency redesign are enormous and will benefit the economy in the long run. We will take all the necessary steps to ensure that there will be a smooth flow of currency swap and minimize the inconvenience in the short term.”

Not once did the Governor complain about the capacity and ability of the Nigerian Printing and Minting Company to meet currency print run demand. And what a shock it was when a major newspaper reported in its lead story the next day that Emefiele made the claim. It didn’t happen. I was at the meeting. No word like that. Happily, the CBN promptly refuted the story.

Now, what did Council members say of the naira redesign policy?

Former President Olusegun Obasanjo, who has been hypercritical of President Buhari for years, said change was necessary from time to time, and was also bound to be opposed.

He gave examples with the change of driving from the right to the left lane in the early 1970s, which was robustly opposed. The National Youth Service Corps (NYSC) scheme, he said was also resisted. He then submitted:

“We enjoy all these things today. I’ve experienced currency change at least more than half a dozen times. When we increased feeding In universities from 50 kobo to N1, it led to ‘Ali Must Go’ riots. Resistance to change is normal, and people will always support, oppose, or be neutral. The naira change policy is good, but implementation is the issue. If there’s inadequate supply, let’s have more. If there are unscrupulous people sabotaging the policy, let’s deal with them.”

The former military head of state and civilian President said the naira policy “will bring little bit of sanity into our elections, have salutary effect on kidnapping and ransom taking, and corruption will be substantially reduced, as money passed through the banking system can be traced.”

On the briefing by INEC Chairman, Chief Obasanjo said: “Mr President, I commend your effort on preparedness. I wish the country free, fair, credible polls. It will be an example to other countries in West Africa, and in Africa.”

Almost all the Governors in attendance commended the naira redesign policy, but picked holes in the implementation. The same with President of the Senate, Ahmad Lawan, and Speaker of the House of Representatives, Femi Gbajabiamila.

The meeting ended on a hopeful note that Nigeria would get its elections right, and also correct all the lapses in the naira redesign policy, which is being done now with the decision of the President to let the old N200 note remain a legal tender till April 10, 2023.

We will surely get there as a country, won’t we?

@views exclusive rights: Femi Adesina, Special Adviser to President Buhari on Media and Publicity, February 16, 2023.