Given the country’s current economic woes, the Civil Society Legislative Advocacy Center claims that the Central Bank of Nigeria’s proposal to redesign the 200, 500, and 1,000 naira notes is not a top priority for the economy.
Auwal Musa, the executive director of CISLAC, announced this in a statement on Thursday, adding that there are other, more urgent issues that the CBN should address in order to get the economy back on track.
Musa continued by saying that the worried reactions of Nigerians to the announcement demonstrated that the CBN’s priorities were misaligned in making the decision.
According to him, the CBN should be more concerned with safeguarding foreign exchange reserves from external outflows and providing access to forex to regular citizens who genuinely and legally require it. He added that the massive decline in foreign direct investment was a direct result of the CBN’s inability to carry out its duties effectively.
According to him, “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.
“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.
“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.
“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.”
The CISLAC boss added that CBN’s macro-economic policies had brought nothing but “untold hardship” on the country’s economy, consequently affecting Nigerians negatively.
The apex bank has to do a lot of work to regain the faith and trust of the public, he continued.
“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 to protect foreign exchange reserves from external outflows.
“The Apex Bank needs to do a lot to recover the confidence of the public by addressing its inability to ensure; Blockage of illicit financial flows and checkmating the use of financial systems to fund terrorism by strengthening oversight of commercial banks used as conduits for corruption,” adding that “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;
“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;
“Sanitization of the CBN recruitment processes, which are non-transparent as they seem to be reserved exclusively for the children, wards and affiliates of politically exposed persons.
“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,” Musa stated.
