Naira crunch: Your policy is draconian, infringes on rights of Nigerians to use legitimately earned income

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  • urge FG, CBN to listen voice of reason by counsel of state before damage to economy becomes irreversible  …Direct state attorneys general to join suit at suprem court 

From Juliana Taiwo-Obalonye, Abuja

Governors of the 36 states of the federation, have described the Central Bank of Nigeria (CBN) Naira re-design and cash withdrawal restrictions policy, has draconian and infringes on rights of Nigerians to use legitimately earned income as they wish.

In a communique released to the media at the end of the 3rd  Nigeria Governors Forum (NGF) meeting, held on Saturday and signed by the chairman of the forum and Governor of Sokoto State, Aminu Tambuwal, the governors, say contrary to CBN’s 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,  the apex bank at present pursuing is a currency confiscation programme, not the currency exchange policy envisaged under S20(3) of the CBN Act, 2007. 

They noted that the liquidity provided to the general public by CBN is grossly insufficient due to the restrictions placed on the amount that can be withdrawn  regardless of the amount deposited.

They also argue that the apex bank’s use of astronomical increase in the currency  in circulation as the basis for the 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.”

The governors noted that while the Attorney General of the Federation has agreed 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, they are yet to observe changes in the financial system.

While calling 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 irreversible damage is done to the economy, they have directed their Attorneys General to review the suit at the Supreme Court with a view to consolidating the legal reliefs pursued by States.

The communique reads thus:

We, members of the Nigeria Governors’ Forum (NGF), at our meeting today discussed critical 

issues of national interest 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 

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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

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