The Nigeria Governors’ Forum (NGF) has accused the Central Bank of Nigeria of conducting a ‘currency confiscation’ programme that is causing suffering for Nigerians.
The governors also called “for the halting of CBN’s plan to end the use of the old currency notes.”
The governors, across party lines, stated this in their communique at the end of their meeting held Saturday in Abuja.
“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provided to the general public is grossly insufficient due to the restrictions placed on the amount that can be withdrawn regardless of the amount deposited,” the governors said in the communique signed by NGF chairman, Governor Aminu Tambuwal of Sokoto.
The governors’ stance comes amidst suffering by Nigerians who have found it difficult to access cash for their daily transactions.
The currency scarcity is a product of the decision by the central bank to redesign the notes of the three largest naira denominations: N200, N500 and N1,000.
However, since the announcement of the new notes last October, Nigerians have had a hard time accessing them even as the central bank announced a 10 February deadline for the old notes.
According to the governors, 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.
“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,” it said.
The NGF said that the inability to use the new notes has led to severe economic consequences, including the emergence of a black market, food inflation, variable commodity prices, long lines and crowds around ATMs, and the risk of a CBN-induced recession.
“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.”
The NGF dismissed the argument by the CBN that the astronomical increase in currency in circulation is the basis for its policy.
The CBN’s data shows that the currency in circulation increased from N1.4 trillion in 2015 to N3.23 trillion in October 2022, but the governors’ forum said the CBN did not consider the increase in the country’s nominal GDP over this period, the doubling of consumer prices, rising population, and the impact of the Ways & Means advances to the federal government by the CBN.
The forum said that either the CBN data may be incomplete or that Nigerians have done exceptionally well in transitioning to a cashless economy.
The NGF called on the Federal Government and the CBN to comply with the rule of law and listen to the voices of reason expressed by Nigerians, the Council of State, and other stakeholders, before the damage to the economy becomes irreparable.