Connect with us

News

Naira Redesign, Withdrawal Limits: Give CBN Benefit of Doubt

Published

on

By Reno Omokri

I have been watching the reactions to the new Automated Teller Machine policy of the Central Bank of Nigeria, which limits ATM withdrawals for individuals to N100,000 per week and N20,000 per day, and quite frankly, it is a bit disappointing as to how people have allowed their own narrow personal interests colour their responses.

My understanding of the tenets of welfare economics is that this policy (like any good one) will have more gainers than losers, which is the objective of every public policy aimed at optimising societal gains. But the few losers are usually the wealthy, affluent and corrupt members of the society, who will make very loud noise to ensure that their unscrupulous gains are restored.

As a nation, we must understand that there are few, preciously few institutions that are non-partisan, non-ethnic, non-religious that project the greatness of Nigeria. The army is one (or should be one). The Central Bank of Nigeria is another. Whether you are PDP, APC, Northerner, Southerner, Christian or Muslim, it is in your personal interest that they survive and thrive!

That is the main reason why the Central Bank of Nigeria, like other reserve banks, is statutorily independent. Because a symbol of a nation’s independence and prominence, such as money, is too important to be left to the whims and caprices of things that are subject to sentiments.

This policy, and others like it, did not come out of nowhere. They did not arise out of a vacuum. Something or somethings happened, and they were responses to what some may even describe as existential financial threats to the nation.

The Naira was taking a big hit. It had to be controlled. Not influenced. Controlled. It took guts to do it. Because whatever you do, those benefitting from the status quo ante bellum will fight you. This new ATM limit is good. It will make cash scarce. And scarcity increases value!

Too many unnecessary things were affecting the Naira’s value. Spraying Naira notes at owambe. Politicians carrying around huge caches of cash for rallies. Kidnappers and bandits flush with cash ransoms. Salary payments in cash. Something just had to give.

With nearly N3 trillion of raw cash flying around outside the banking system, there is surely too much supply of physical cash. How can over 85 percent of currency issued be held physically? It shows too much abundance.

Someone at the Central Bank of Nigeria is a deep thinker. That person, or persons, understands the law of scarcity. The more an item is scarce, the more it rises in value, and the greater the desire to acquire it. This new ATM limit will increase Naira’s value, and make Nigerians work harder to acquire Naira, thereby increasing our GDP.

The policy will ensure that the motive for wanting to hold physical cash is limited to unavoidable necessities.

When you limit a people’s freedom of choice to access anything with innate value, the limited item becomes more sought after. And that is one of the economics of illusion that the United States Federal Reserve Bank uses to shore up the value of the dollar. And now, to my great relief, the Central Bank of Nigeria is proving that it too can play that game.

There are ATM limits abroad. Even beyond that, there are other limits to what you can do with cash. For example, in both the United States and the United Kingdom, you can’t pay cash into an account that does not belong to you. Heavens did not fall when they introduced that policy. Quite the opposite. Their currency rose in value.

Western nations do not exist for the benefit of developing nations. They keep telling you to allow market forces determine the value of your own currency. Do market forces alone determine the value of theirs? Last month, the Pound was collapsing. Did the Bank of England leave it to market forces alone?

Of course not. They panicked and intervened. The chief economist of the Bank of England, Huw Pill, said that the Monetary Policy Committee “cannot be indifferent” to the collapse of the Pound and warned the public of a “significant” monetary policy response to come before the end of the year to shore up the pound.

That response came in the form of increased interest rates (it went up by 0.75% on Thursday, November 3, 2022), and on Thursday, December 8, 2022, it was announced that they are about to increase interest rates again, by another 0.50% by some projections.

When the Bank of England noticed a run on the Pound, they responded rapidly by jacking up interest rates to increase the yield available to foreign direct investors on their British financial assets, which they hoped would lead to a rise in the value of the Pound. And it did.

We have seen a 13% rise in the value of the Pound between September 27, 2022 (when it exchanged for US$1.06 to £1) and December 9, 2022 (exchanging for US$1.23 to £1).

And the British government and people supported the Bank of England, because before their very own eyes, £500 billion was wiped out of their economy. With such colossal losses, you forget the free market and modern money theories, and do whatever is practically necessary for the survival of your currency and economy.

And that is what the Central Bank of Nigerians is now doing. Thankfully, the usually dull and economically clumsy President Buhari has seen it fit to not interfere. That shows that he definitely understands that the Nigerian economy must be strengthened in all ways possible, regardless of unscrupulous noises both from within and outside Nigeria.

The National Assembly is making grunting noises to placate the public. But this may merely be a misplaced bid to placate their constituents and secure another term in office.

But one of the main resistances to this patriotic act of the Central Bank of Nigeria in limiting ATM withdrawal is coming from the public, who do not yet understand that the policy is in their best interest. Specifically, bandits, kidnappers and urgent 2k girls may also scream as their cheap and iniquitous sources of income are terminated. They are pressuring their men, and we feel the pressure on social media and the traditional media!

The Naira is too readily available. It needs to be less available as cash and more available as credit in banks, which is the lifeblood of an economy. Money will not be scarce in banks as digital and electronic cash remains very accessible and available, even in the most remote parts of the country. It is only the physical holding of cash that is restricted. And anybody that says they cannot do business except via cash is deliberately ignorant. They can. They just choose not to for reasons best known to them!

There is hardly any transaction that you need (not want) to do via cash that you cannot do with the new ATM limits. You can pay a bus conductor to get from point A to B, and you can buy groceries from the market. In fact, less cash will drive the cost of food and transport down!

To some thinking people, the N100,000 weekly limit is even too much. How many honest, ordinary, and poor Nigerians require that amount consistently every week for a year? Many market women and men, artisans and MSMEs whose weekly transactions exceed the N100,000 limit already operate bank accounts. All of us have paid our mechanics, welders, carpenters, tailors, etc. via bank transfers. Even in the remotest villages, we have sent money to parents and relatives through their banks.

We must understand that what was happening with the Naira was a very desperate situation, and desperate illnesses sometimes require desperate remedies.

The ASUU strike was beyond the control of the Central Bank of Nigeria, however, the consequences of that strike shook the very foundations of that bank. Almost overnight, Nigerians seeking foreign higher education increased by almost a 1000%.

And then the supply chain crisis caused by the Russia/Ukraine war set in at a time Africa was already trying to grapple with the Ethiopia-Tigray crisis. Oil prices became unpredictable. The profligate Buhari administration was borrowing left, right and centre. And politicians were stockpiling cash for 2023.

Of all the responses that they could have taken, the Emefiele-led Central Bank of Nigeria took what in my opinion is the best decision. They frustrated speculators, politicians, and criminal non-state actors, like bandits and kidnappers, with the Naira redesign.

Of course, politicians who are used to using bullion vans to influence elections will not take kindly to the new CBN ATM limits. Bullion vans were their main election strategy. Now, Emefiele has frustrated such plans. It is only commonsensical to expect them to fight back. We all saw the photo behind the son of a notorious politician which said “Money Inducements”. Those are the enemies of ATM limits.

It goes without saying that where there are ATM limits, “money inducement” will be almost impossible. That is why they are fighting the CBN’s new ATM limits. It has nothing to do with the poor. The poor do not need to have over ₦100,000 cash weekly. Election riggers do!

And now this new ATM limits will ensure that we do not return to the same situation that necessitated the redesign of the Naira. We too as citizens must show some patriotic discipline. Our financial actions have consequences on the Naira. It is not left to the Central Bank of Nigeria alone.

Do not play with money. Devaluation and untamed inflation are dangerous. If you study history, almost all revolutions and epoch-defining social upheavals have always been ignited by devaluation and untamed inflation.

The French Revolution was sparked by the price of bread. The Bolshevik Revolution was set off by the economic policies of Tsar Nicholas II, which led to spiralling inflation, leading to mass starvation. The rise of the National Socialist German Workers’ Party, which inevitably led to the Second World War, was due to the hyperinflation of the German Papiermark.

And whether or not we want to acknowledge it, the stated reason for the EndSARS protest may have been police brutality, but the real reason was food inflation. If you doubt me, ask yourself what police brutality had to do with the storming of palliative warehouses, which was a hallmark of the EndSARS protest.

Today, food inflation in Nigeria is over 23%, do we wait until we match the 99% food inflation in Turkey before we act judiciously?

You and I can afford to be shortsighted. However, those in control of our monetary policies cannot. The Central Bank of Nigeria has continued to impress me recently with their penchant for lateral innovative thinking and unconventional solutions to Nigeria’s unique challenges.

I have met Alan Greenspan, probably one of the best central bankers in history. I sat for lunch at a restaurant with him. And believe me when I say that the actions of a country’s central bank often matter more than the actions of its President.

I urge Nigerians to have faith in the Emefiele-led Central Bank for now. He and his team have continued to act in good faith for the betterment of Nigerians. Believe that they have the best interest of you and your families at heart. Allow them the freedom to find homegrown solutions to our unique economic challenges.

Nigeria is at a critical stage. We must allow those institutions that must work independently go on with their independence if we want to retain and maintain our own national independence from those institutions that have kept Francophone Africa independent only in name.

While the jury is still out, we can nevertheless tell what type of day it is going to be by the morning we see. Things are looking less heady than they were two months ago. There is a lot less Naira instability.

We await the November Consumer Price Index from the National Bureau of Statistics. Although this is the time of the year when festivities affect inflation, I am still optimistic that the Central Bank of Nigeria’s policies will show and year-on-year improvement.

And even if it does not, let us give them the benefit of the doubt until we see the Q1 figures for 2023.

On the issue of the so-called order by the House of Representatives to the Central Bank of Nigeria for it to suspend the new ATM limits, Governor Godwin Emefiele needs to demonstrate courage. First of all, these are politicians. One of the very classes of people targeted by this patriotic policy. They cannot be judges in their own case.

And the ‘order’ itself is not even worth the paper it is written on. Any high court of law should be able to set it aside. And it is unenforceable by the police or any other law enforcement body for the simple reason that the House of Representatives lacks the power to order the Central Bank of Nigeria or its Governor. Section 1 (3) of the Central Bank of Nigeria Act, 2007 provides that “The Bank shall be an INDEPENDENT body”. Thus, I will counsel the CBN Governor, Emefiele, to ignore them!

#

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News

NSCDC Under Audi: CWAI Highlights Achievements and Paradigm Shift

Published

on

A civil society and pressure group, non-profit and anti-corruption organization has stated that the crackdown on illegal miners has saved the economy huge financial revenue loss as a result of securing the mining sector which is a vital component of Nigeria’s economy. The CSO further observed that this destruction of over 350 illegal refineries has also assisted to reduce the menace of oil theft in the Niger Delta region as well as the arrest and recovery of critical assets and railway materials worth over 5 billion Naira.

It is instructive that the creation of the Nigerian Security and Civil Defence Corps, NSCDC’s Special Mines Marshals to combat the menace of illegal mining has also enabled the reduction of mining theft, oil and gas sector of the country as the present management of the NSCDC under the leadership of Dr Abubakar Audi is determined to nip in the bud these challenges once and for all.

Howbeit, the creation of the Civil Defence Academy in Jos, Plateau State, for career development and progression; the creation of NSCDC Arms Squad Training School at Ugede Development Area in Nasarawa LGA of Nasarawa State is very instructive; the massive acquisition of mini fire fighter tankers for disaster management in case of emergencies are worthy of note and big morale booster for the corps and the procurement of Armoured Personnel Carrier (APC) vehicles for the NSCDC to use in fighting criminalities across the country is a welcome development under the present administration.

In a press release signed in Warri, Delta State by the Executive Secretary of Citizens Watch Advocacy Initiative (CWAI), Omoba Kenneth Aigbegbele on Tuesday, the CSO identified bad governance, abject poverty and unemployment as some of the root causes of attacks on our critical oil and gas assets including the mining sector in the country. He stated that poverty and hunger have contributed to the damages being recorded in the oil and gas facilities and that the degradation of the environment due to exploration and oil spills has not helped matters as it has deprived communities’ access to their traditional methods of livelihoods.

The organization observed that: “There is therefore the need to confront and tackle poverty and other issues, so as to reduce the menace.” That government should deploy special equipment, create forums to engage the various communities, collaborate and partner with private security guards, armed forces and intelligence services to stem the tide of oil theft and mining plundering.

In an effort to curb Illegal mining and create safe mining environment recently, the Federal Government commissioned 350 additional operatives of the NSCDC as mining marshals. This is happening barely few months after the first batch of 2,220 mining marshals were inaugurated. This is as the marshals underscore the Federal Government’s commitment to reforming the unlicensed operators across the country. According to reports, since the inauguration, over 200 illegal mining suspects have been arrested, 133 prosecutions underway and confiscated illegally mined minerals forfeited to the Federal Government. CWAI gathered that as part of its efforts to strengthen, protect and safeguard schools across the country, the Save School Initiative was launched for the protection of vulnerable schools and to reduce the menace of kidnapping in schools and the creation of the NSCDC Female Squad to aid in tackling kidnappings and other restiveness in schools which has yielded enormous dividends by the reduction of this heinous crime.

CWAI noted the various institutional nationwide reformations presently taking place across the corps as well as the new sense of belonging, increase in welfare packages for the corps, prompt payment of emoluments, allowances including the zero tolerance for corruption initiated by the new management. This, without doubt, has given the corps a pride of place in the paramilitary organizations in the country and has raised the ‘esprit-de-corps’ of the men and officers like never before seen. The robust welfare, motivated packages through massive promotions, conversion, upgrading and other benefits-in-kind are really commendable and not to mention the construction of official and residential buildings within and outside the NSCDC headquarters, including the procurement of operational and office equipment and the purchase of over 200 operation vehicles are also worthy of note.

The arrest of students for acts unbecoming of them across institutions of learning in the country; arrest of practitioners of same sex marriages is a major milestone; the commendations given by governors of Zamfara, Gombe, Ogun, Jigawa and Katsina states recently are also worth mentioning; the reduction of the incessant herders’ and farmers’ clashes and cattle rustling; the deployment of undercover corps officers to schools;  the collaboration with the Nigeria Union of Journalists (NUJ) to reduce criminal activities across the country with the toga ‘See Something, Say Something;” the robust relationships of inter-agency corporations and partnerships with sister agencies such as the Navy, Army, Customs, Immigration, NNPC, and civil society organizations, is a major achievement that must be applauded; the consistent advocacies carried out by the CG to intimate and assure Nigerians to believe in the corps’ operations to engender faith in security agencies, are all worthy of note.

The continued fight against cyber-crimes, child abuse and the flushing out of illegal guard private operators; the arrest of smugglers, vandals and pipeline/oil thieves in the Niger Delta region have become an Herculean task that must be achieved, according to the CG, saying that the Service “is presently doing all it can to curb the proliferation of small arms across the length and breadth of the country.” He also read the Riot Act to the Corps’ commandants in the Niger Delta states, assuring them that President Bola Ahmed Tinubu has a zero-tolerance to civil theft. He asked them to do all they can to nib crimes in the bud in line with a presidential order to rid the nation’s oil sector of economic saboteurs, vandals, criminals, oil thieves and other nefarious activities inimical to the growth of the sector.

CWAI can attest to the fact that the giant strides achieved so far by the current leadership are as a result of the strategic directions taken on the commissioning of the Standard Curriculum for NSCDC for entrenching career progression, effective supervision and transparent regulation of the Private Guard Companies in Nigeria which has reduced insecurity across the country. CWAI asserts that this is connected to a new reinvigorated legal department, successes in anti-vandalism, protection of farmers’ physical security at mining sites and the establishment of Special Female Squad (SFS) targeted at boosting the fight against insecurity and the location of the squad in all Commands across the country. This has also enhanced the safe school response coordination and the protection of schools in remote areas and border communities, which is done in collaboration with other security agencies of the Army and the Department of State Services (DSS) to foil attempts to attack schools. This is endorsed by all stakeholders.

Similarly, the Commandant-General has continuously urged security agencies/operatives to shun inter-agency rivalry to foster national security. The CG gave this charge at a recent security seminar tagged “Promoting Inter-Agency Collaboration Among Security Agencies.” He noted that “the rivalry was capable of eroding relationships building over time between security agencies and consequently rubbed off negatively on the provision of adequate security.”  

CWAI also endorsed the amicable settlement of conflicts and dispute resolutions between herdsmen, farmers, cattle rustlers and villagers, community leaders and bandits – all championed by the current management of the NSCDC. The pressure group also applauded the vision, mission and the ability to implement its mandate as regards the settlement of disputes through Alternative Dispute Resolute (ADR) between warring parties.

CWAI recognizes the importance of conflict and dispute resolution mechanism in today’s contemporary issues and conflict management, and commended the leadership for thinking out of the box and finding lasting solutions in today’s crises-prone society, where conflicts have become the order of the day with the support of the proactive Minister of Interior, Olubunmi Ojo.

CWAI emphasized a renewed vigour for the increment of national budget allocated to the NSCDC in view of the pivotal role it plays in the reduction of criminal elements in the protection of critical national assets and the reduction of kidnapping in our schools as a result of the school initiative, which if properly funded will give the NSCDC the impetus to do more for the nation and its workforce.

We are encouraged to commend the public procurement and contract approvals, accountability in procurement process and payments. We also applaud the transformation, vision and forthrightness of the leadership in changing the narrative to make the Corps the cynosure of all eyes through discipline, promotion of officers when due and capacity building of officers and men, including building strategic alliances with various ivory towers across the land, to upgrade the service institutions to meet with what is attainable globally and build robust sister inter-agency collaborations.

CWAI, therefore, has no hesitation in passing a vote of confidence on the Dr. Abubakar Audi-led management and calls on the international community and well-meaning Nigerians to support the NSCDC management and allow them to concentrate on their mandate and continuously support the proactive leadership to enable it further its commitment and efforts to the general wellbeing of the nation.

Continue Reading

News

Groups Back Federal Govt’s Initiatives, Laud Agric Minister For Generating Over 60,000 Jobs

Published

on

Over 1000 bloggers under the aegis of the Bloggers and Vloggers Content Creators Association in Nigeria (BAVCCA) and Tinubu -Shettima Support Group have lauded the creation of 60,000 jobs in various rural economies across the country under the leadership of the Minister of Agriculture and Food Security, Senator Abubakar Kyari.

The bloggers and Tinubu-Shettima Support Group in a joint statement on Sunday signed by the Vice President of BAVCCA, Dr. Adebayo Olugbenga, National Coordinator of Tinubu-Shettima Support Group Alhaji Shehu Mohammed and the Secretary, Hon Uche Okafor respectively expressed their unwavering support for Kyari’s transformative leadership and the significant progress made in the agricultural sector under his stewardship in the last one year.

The State reads in part, “It is with great pride and enthusiasm that we, the members of the Bloggers and Vloggers, Content Creators Association in Nigeria, and the Tinubu-Shettima Support Group gathered here today to pass a vote of confidence in the Honourable Minister of Agriculture and Food Security, Senator Abubakar Kyari.

“In the past one year, Senator Kyari has demonstrated an unparalleled commitment to revolutionizing agriculture in Nigeria, and we are here to applaud his remarkable achievements and unwavering dedication to this crucial sector of our economy.”

They pointed out that the agricultural sector under the watch of Kyari, has injected an estimated value of N309 billion into the Nigerian economy in the last one year, as the money was injected through the harvest of agricultural produce.

And commended the minister for the provision of rural infrastructure, such as the construction of 77.8km of asphalt roads; construction of 130.9 km of earthen roads; provision of 102 motorized and solar-powered boreholes and installation of 6,504 solar street lights, as well as generating over 60,000 jobs in various rural economies.

Enumerating some of the Minister’s achievements, they said the Federal Ministry of Agriculture and Food Security had launched dry season farming with cultivation of 118,657 hectares of wheat in 15 states in the acceleration of all-year-round farming in a bid to ensure food and nutrition security.

They noted that at the end of dry season farming, that one of the participating States, Jigawa, had produced 55,000 metric tonnes of wheat.

The Vice President of BAVCCA disclosed that the Federal Government has also supported 107,429 wheat farmers with inputs such as fertilizers, seeds, and pesticides, resulting in an output of 474,628 metric tonnes.

The leadership of BAVCCA and the Tinubu-Shettima supporters observed that in response to the Presidential directive, the Ministry of Agriculture had released 42,000metric tonnes of assorted food commodities made up of maize, millet, sorghum, and garri, from the National Strategic Food Reserve to National Emergency Management Agency (NEMA) for onward distribution to vulnerable Nigerians.

As part of measures to reduce escalating prices of food items in the markets, they expressed joy that the Federal Government procured and distributed 58,500 metric tonnes of milled rice to all States of the Federation and Federal Capital Territory, Abuja.

According to the statement, “To reduce malnutrition and stunted growth among children, the Federal Government had embarked on fortification of crops with Vitamin A micro-nutrient to enrich nutrition content and health value of food commodities.

“In response to persistent food inflation, the Federal Government has distributed 60,432metric tons of improved seeds, 887,255mt seedlings, 138numbers of value kits, 501,726 litres of agrochemicals, 62,328.5 metric tonnes of inorganic fertilizers, 1,000kg fungicide, and 33,200 equipment to farmers across different value chains to enhance production.

“The Ministry also received 2.15 million bags of fertilizer from the Central Bank of Nigeria(CBN) for distribution to farmers free of charge, adding that the distribution of the farm input has begun across the States.

“As part of measures to guarantee the protection and safety of farmers in their farmlands, there has been an improvement of farmland security with the provision of additional resources to Agro Rangers and other security agencies.

“On livestock production and animal health, the Federal Government had in the last one year procured and distributed 14,056,467 doses of anthrax spore, foot, and mouth diseases vaccines for risk-based vaccination exercise in 22 high-risk states across Nigeria.”

The groups further noted with satisfaction the establishment of animal health centres and veterinary hospitals, six micro earth dams and eight boreholes, 164 milk collection centres, eight cottage feed mills, and seven livestock centres in the country.

On Mechanisation, BAVCCA explained that the Ministry had signed a Memorandum of Understanding (MoU) with John Deere and Tata Africa to assemble in-country and supply 10,000 tractors with implements and accessories at 2,000 units yearly, as well as 100 units of combine harvesters to support production.

The groups explained that the Federal Government had partnered with the Brazilian government for the sum 995,000 Euros to provide mechanisation hubs across the Federation.

They are confident that under the continued stewardship of Kyari, the agricultural sector will thrive, contributing to the country’s food security, economic prosperity, and sustainable development.

“Kyari’s dedication, innovation, and tireless efforts have truly set a new standard for agricultural leadership in Nigeria.

“We, the members of BAVCCA and Tinubu-Shettima Support Group, pledge our unwavering support and commitment to working alongside the Minister to further strengthen the agricultural sector and realise our collective vision of a prosperous, food-secure, and environmentally sustainable Nigeria,” the statement assured.

Continue Reading

News

Coalition lauds NCC’s commitment to telecoms’ sector increase in contributions to nation’s GDP

Published

on

 

The Coalition on Transparency and Rule of Law (CTRL) has commended theGo Nigerian Communications Commission (NCC) for its commitment to the nation’s telecoms sector which has led to an increase in its contribution to Nigeria’s Gross Domestic Product (GDP).

 

The coalition also praised the leadership of Dr. Aminu Maida, the Executive Vice Chairman and Chief Executive Officer of NCC, for his vision and strategic goal alignment.

 

In a statement signed by Sunday Thomas, the coalition said: “We are thrilled to acknowledge the recent remarks made by Dr. Aminu Maida, reaffirming the commission’s commitment to significantly enhancing the telecoms sector’s contribution to Nigeria’s GDP.

 

“Dr. Maida’s leadership and creative vision are commendable, demonstrating the NCC’s dedication to driving economic growth and development.”

 

The coalition further praised Dr. Maida’s ambitious target of achieving a 25% increase in the telecoms sector’s contribution to Nigeria’s GDP, noting that it showcases the commission’s proactive stance in harnessing the potential of the telecommunications industry.

 

The group also acknowledged Dr. Maida’s leadership style, which has fostered an open-door policy, encouraging industry stakeholders to engage in constructive dialogue with the commission.

 

“We extend our heartfelt commendation to Dr. Maida and the NCC for their dedication to driving sustainable economic growth and development in the telecoms sector,” Thomas added.

 

“Their commitment is aligned with our mission to champion policies and practices that uphold transparency, accountability, and sustainable economic growth.”

 

The coalition expressed its support for the NCC’s endeavours, acknowledging the imperative need for synergistic collaboration between the public and private sectors.

 

They believe that the NCC’s commitment will catalyze other sectors to strive for similar growth and contribution to Nigeria’s GDP.

 

“We believe that Dr. Maida’s 25% target is feasible, and we look forward to seeing the positive impact of this initiative on our economy and the lives of Nigerians,” Thomas concluded.

Continue Reading

Trending

Copyright © 2023 Thebigeye