Naira Crisis: Emefiele discloses why currency redesign policy is failing

Supply constraint arising from the limited capacity to print enough new Naira notes is responsible for the severe cash crunch hurting Nigerians, CBN Governor Godwin Emefiele admitted amid the disappointing naira swap policy of the Buhari administration.

Mr Emefiele made the disclosure on Friday when he briefed the emergency meeting of the National Council of State, sources who attended the meeting told PREMIUM TIMES. President Muhammadu Buhari convened the meeting as threats of social instability rise following the shortage of Naira.

Violent protests have been recorded in parts of the country, including in Ogun, Oyo and Akwa Ibom in the country’s south, and the media is awash with lamentations of suffering Nigerians, who are not able to access their funds for transactions, especially in the cash-dominated informal economy.

Many banks in various states have shut down their operations as citizens violently protest their inability to access their funds.

Many governors have also echoed the lamentations of the citizens.

On Friday, Mr Emefiele told the leaders that the Nigerian Security Printing and Minting Plc (The Mint), suffers capacity constraints resulting in the failure to print adequate new notes to replace the old N200, N500 and 1,000 notes.

The extended deadline to phase out the old notes is today, 10 February. However, a Supreme Court decision this week asked that the deadline be further extended. The Attorney-General of the Federation, Abubakar Malami, is challenging that interim ruling by the Supreme Court and the central bank has not spoken on how it intends to comply with the ruling, thus leaving Nigerians confused.

Without a definite pronouncement by the federal government or the CBN, Nigerians have started rejecting the old notes, on-the-ground reporting across the country shows.

In further reporting for this story, PREMIUM TIMES learnt that The Mint’s capacity constraints rest on not having enough papers to print new Naira notes.

“The Mint has run out of papers to print N500 and 1,000 notes,” a source said, explaining the supply constraints The Minit faces. “They have placed orders with a German firm and De La Rue of the UK (for papers) but they have been placed on a long waiting list so their orders cannot be met now,”

The source said The Mint had received CBN’s request to print 70 million copies of the new notes, totalling N126 billion to be pumped into circulation by today, the source added, regretting, however, that the request could not be met because “The Mint doesn’t have the capacity.”

PREMIUM TIMES could not speak with The Mint officially.

“Sabotage”

Despite admitting to the supply constraints, Mr Emefiele also lamented the activities of saboteurs in the banking industry, who, he said, are hoarding the new notes.

At least two unnamed bank branches have been busted for hoarding new notes while customers endured long queues and were unable to withdraw their money, he said.

Some commercial banks have, however, denied hoarding the new notes, saying the Central Bank is simply not providing them with enough notes for customers.

PREMIUM TIMES’ sources, who attended the Friday meeting, said the attendees supported the Naira redesign policy, which the government has said is aimed at combating illicit financing. However, they were said to be unanimous in decrying the implementation of the policy, which has deepened hardship among Nigerians.

The problem is exacerbated by the country’s apparently fragile electronic transactions infrastructure, which has seen a spike in failed transactions as more people resort to e-banking amid cash shortage.

The attendees asked the government to be more aggressive in distributing the new notes to address the shortage.

“Relating to the Naira redesign policy, the policy stands but then the council agreed that there is need for aggressive action on the part of the CBN as it relates to the implementation of the policy by way of ensuring adequate provision being made with particular regard to the supply of the Naira in the system,” Mr Malami told journalists after the meeting.

Meanwhile, Mr Buhari was non-committal at the meeting and barely spoke, the sources said. He left the meeting as the time for the Muslim’s Jummah prayer drew close and his deputy, Vice President Yemi Osinbajo, took over.

Mr Osinbajo was said to have thanked the attendees and reminded them that the Council of State is an advisory body.

He said the president would take a decision.