Naira Redesign, Withdrawal Limits: Give CBN Benefit of Doubt
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!
ANTI PARTY ACTIVITIES: Esan Central APC, Suspends Nine Leaders, Appoints Bello
Nine Leaders of the All Progressives Congress (APC) in Esan Central LGA have been suspended at an extraordinary meeting held this evening at Irrua, the LGA capital.
The suspended leaders include APC State Vice Chairman, Chief Francis Inegbeniki, Esan Central foremost Party Leader, Prince Willy Shaka Momodu, Ward Leader, Hon Abudu Ugbesia, among six others.
The suspended nine APC leaders are alleged to have held a clandestine meeting at a hotel in Eidenu, Irrua on the eve of the House of Assembly election and resolved to work against their party candidate for the House of Assembly election, Hon Victor Edoror. It is alleged that they were induced by the ruling party and their grand conspiracy to disallow Hon Edoror to get into the House and become the Speaker which might scuttle their agenda for Esan governor candidate from Esan Central LGA.
The meeting which was attended enmass by angry members and party executives of the party across the LGA appointed former LGA Councillior, and House of Assembly election aspirant, Hon. Bello Oyaziwolo, as the acting Leader, to oversee the affairs of the party pending the determination of the investigation into the degree of involvement of each of the suspended leader.
Interestingly, the Deputy Leader of the Party in Esan Central LGA and former Vice Chairman of the LGA, Hon Francis Ubene, was exempted from suspension because preliminary investigation revealed that he was in the meeting allegedly called by Chief Inegbeniki, but he refused to agree with their alleged plan to sabotage the election for Hon Edoror because according to him “I have forgiven him and if I have forgiven him, I cannot work against him or the party”.
Speaking with Hon Bello, after the appointment, the new LGA Leader said he was not interested in Leading the party for selfish reasons but would commit himself to helping the party rid itself of betrayals and inept leaders in the LGA and hopefully allow a free process to produce the next LGA Leader.
Delta: Oborevwori’s Victory, A Turning Point, Says Ebireri
Media Consultant, Henry Ebireri, has urged Delta State governor-elect, Rt. Hon Sheriff Oborevwori to embark only on programmes that are genuine, attainable, purposeful, durable and people-oriented.
He also urged him to make a significant impact at improving the lot of the masses.
In a statement in Sapele, the media consultant described the March 18 governorship election in Delta State as ‘’’a turning point, a landmark in the history of the oil rich state’’.
He appealed to Oborevwori to steer Delta State in the needed direction.
‘’There is a very high expectation from the governor-elect by the people. He must direct his energy towards inculcating the spirit of self-reliance among the citizenry through economic and empowerment programmes’’
The media professional listed security, youth and women empowerment, agriculture, health, education, infrastructural development, industrial revolution, cultural and tourism rebirth, communication and sports development as key areas to be addressed by the governor-elect.
The statement underscored the future of Delta youths infrastructure and security challenges.
He urged Oborevwori to be fair to all.
He also urged him to recruit only qualified, competent and meritorious hands to help him develop the oil-rich state.
‘’They should be people of integrity, honesty and trust. The team should comprise only tested, dedicated, loyal, courageous, selfless, focused and visionary men and women’’
Ebireri further commended Governor Ifeanyi Okowa for his immense contribution to the political development of Delta State.
Senator Ovie Omo-Agege Rejects INEC’s Declaration of Oborevwori As Winner of Delta Poll
A while ago, the Resident Electoral Commissioner (REC) in Delta State announced Rt. Hon. Sheriff Oborevwori, gubernatorial flagbearer of the Peoples Democratic Party (PDP) as the governor-elect following the March 18 governorship election.
The declaration was made despite the myriad of infractions and acts of impunity on the part of the PDP in the course of the election. These were brought to the attention of INEC with incontrovertible proof.
The March 18 election was characterized by massive fraud, unprecedented vote buying and voter suppression perpetrated by the PDP in the course of the election.
The fraudulent nature of PDP’s so-called victory are just too damning and daring for it to be acceptable in any decent society. Most of those infractions are on the public domain and known to INEC officials and the security agencies involved in superintending the election.
In the February 25 Presidential and National Assembly elections, the results pointed to an unequivocal rejection of the PDP. Of the three senatorial zones in the state, APC won two while PDP controversially edged out the Labour Party in the Delta North Senate race.
It was an unadulterated verdict of Deltans on how they have fared under 24 years of governance of their state by PDP.
On the basis of the factors listed and more that will come later, Senator Ovie Omo-Agege, governorship candidate of the APC in Delta State as well as the leadership of the party, unequivocally reject the declaration by INEC of Rt. Hon. Sheriff Oborevwori of the PDP as winner of the March 18 governorship election.
We will challenge this fraudulent result using all legal means.
As a democrat and Deputy President of the Senate, Omo-Agege will explore all lawful avenues to reclaim the mandate freely given to him by the good people of Delta State.
To the numerous supporters of APC and the entire public that share in Omo-Agege’s vision of building a new Delta State, we urge you all to remain calm, peaceful and law abiding.
I can assure all our teeming supporters and all Deltans that the PDP pyrrhic celebration of a stolen mandate will be short-lived.
By the grace of God and the clearly expressed wish of the people, this electoral heist will be reversed and Senator Omo-Agege will be sworn in on May 29, 2023 as the lawfully elected Governor of Delta State.
Chief Press Secretary to the Deputy President of the Senate and Governorship Candidate of APC, Delta State, Senator Ovie Omo-Agege
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