Ahead of Wednesday’s sitting of the Supreme Court to decide on the naira redesign policy of the Central Bank of Nigeria (CBN), the Nigeria Governors’ Forum (NGF) has urged its members to support the legal battle on the policy against the Federal Government at the apex court.
In a communiqué issued on Sunday, after its meeting on Saturday in Abuja, the NGF directed Attorneys General of the 36 states to review the suit at the Supreme Court with a view to consolidating the legal reliefs pursued by states.
The case was originally instituted by governments of Kaduna, Kogi and Zamfara states before Kano, Niger, Ondo and Ekiti states joined the suit last week.
Rising from the meeting, the governors said the country is at risk of recession, which will be the result of CBN’s naira exchange policy.
In the communiqué signed by NGF chairperson and governor of Sokoto State, Aminu Tambuwal, the governors, across party lines, criticised CBN over the handling of the policy, adding that the resulting naira scarcity is causing hardship for Nigerians.
They accused the apex bank 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 after two deadlines failed to end naira scarcity across the country.
“The argument by 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 CBN, the currency in circulation increased from N1.4 trillion in 2015 to N3.23 trillion in October 2022. CBN 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 CBN over this period.
“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.
“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. The country runs the risk of a CBN-induced recession.
“It is our considered view that what 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’ stance comes amid suffering by Nigerians who have found it difficult to access cash for their daily transactions. The currency scarcity is a product of CBN’s decision to redesign the notes of the three largest naira denominations: N200, N500 and N1,000.
The governors, therefore, “called on the Federal Government and CBN to respect the rule of law and listen to the voice of reason expressed by Nigerians and other stakeholders, including the Council of State, before the damage to our economy becomes too great to fix by the next administration.”
