Naira: CISLAC knocks CBN, says redesign of currency notes not economic priority

By Chimezie Godfrey

The Civil Society Legislative Advocacy , CISLAC, has said the proposed redesign of the Nigerian currency by the Central Bank of Nigeria is not an economic priority.

The Executive Director, CISLAC, Auwal Rafsanjani in a statement in response to the Apex Bank’s decision to change the outlook of some denomination of the naira said this is not the solution to addressing the poor monetary policy challenges and growing economic woes of the country.

He said,”Firstly, the CBN’s decision to redesign and reissue new 200, 500 and 1000 notes is not an economic priority and barely a solution to addressing Nigeria’s poor monetary policy challenges and growing economic woes.

“Various comments and responses from concerned Nigerians, show that a large number of Nigerians are worried about the misplacement of priorities of the Apex Bank to make such a decision that comes with possibly huge logistics costs and avoidable dislocations to small businesses, most of whom are in the informal sector. This is especially at a time when the country is grappling with huge fiscal deficits, a free fall of the naira, soaring inflation rates, multiple forex rates and rising borrowing costs.

“The reasons for this decision seem no different from those given for the forex demand management strategy which resulted in a non-satisfactory conclusion as the artificially low exchange rate failed to be as reflective of the market as possible to improve supply, but this time it only threatens damning economic consequences for Nigerians.”

Rafsanjani stressed that the public perception that this decision holds no value proposition for the economy, reiterates the tendency of the CBN to be distracted from fulfilling priority statutory obligations.

“So far, the macro-economic and monetary policies of the CBN has brought untold hardship to the productive and service sectors of our nation’s economy with consequential negative effects on the lives of our citizens.

“The Apex Bank has floated multiple exchange rate regimes and has been accused of facilitating arbitrage between the parallel and official foreign exchange markets, providing huge financial patronage and extending forex-based favours to allies. Nigeria is grappling with the external pressures from the incapacity of the Central Bank of Nigeria (CBN) to protect foreign exchange reserves from external outflows,” he said.

The Human Rights Activist said the Apex Bank needs to do a lot to recover the confidence of the public by addressing its inability to ensure the blockage of illicit financial flows (IFFs) and checkmating the use of financial systems to fund terrorism by strengthening oversight of commercial banks used as conduits for corruption.

“The increasing scale of insecurity definitely impacts heavily on the overall economic environment for local and foreign-owned businesses as well as other economic activities. Foreign investors rely on authoritative indexes like the Global Terrorism Index and even economic indexes that include an evaluation of security and stability, to inform their investment decisions. It portends a drop in investor confidence and the loss of opportunities on foreign direct investments and revenue needed to finance development.

“Intensifying collaborations with relevant anti-corruption agencies to check dubious charges by some commercial banks, who keep shortchanging poor Nigerians whose reducing disposable income is further worsened by growing inflation costs and unemployment.

“Reduction of competition with other agencies by going beyond its purview to drive interventions in sectors without the consent or cooperation of the relevant coordinating ministries. The CBN’s continued and unsolicited support for MSMEs can be more effective by ensuring synergy between the fiscal and the monetary authorities on intervention funds and adopting transparent mechanisms for beneficiaries to access.

“Availability of forex to those who legitimately need it like students studying out of the country and businesses. The artificially low exchange rate has failed to be as reflective of the market as possible and this has affected access to forex for payment of foreign tuition fees, and the importation of systems and raw materials which contribute greatly to the country’s worsening economic situation. There is a huge blow to our foreign direct investment as foreign investors are leaving due to their inability to access forex.”

He added that the CBN has also failed in the sanitization of its recruitment processes, which are non-transparent as they seem to be reserved exclusively for the children, wards and affiliates of politically exposed persons.”

Rafsanjani noted that in this desperate period of economic woes for Nigeria, the CBN’s efforts will be better served in pushing robust monetary policies that are in tandem with global best practices, fighting inflation and building a strong financial system in an increasingly uncertain global economy.