By CLEMENT NWOJI, Abuja
But for the effects of inflationary pressures on the economy and the high disparity against the Naira in the currency market, it would not have been an exaggeration to state that the Central Bank of Nigeria, CBN, under the current leadership of Dr.Yemi Cardoso, the Governor, has taken bold policy steps that have instilled confidence in the financial system.
As we look forward to the first Monetary Policy Committee meeting under his leadership, which, according to the CBN’s Ag. Director Corporate Communications, Sidi Ali, Hakama (Mrs.), has been scheduled to hold on the 26th & 27th of February, 2024, there are high expectations that the aforementioned issues will be top priorities.
Confidence and trust are critical in the effective management of any financial system.
For example, at the height of the panick over ‘induced’ cash unavailability, the CBN, late last year, consistently pushed reassuring messages that there was sufficient cash in the system. From all indications, this has turned out to true. Kudos to stakeholders in the financial system for the collaboration that ensured the situation did not degenerate into a major crisis.
If the CBN can sustain this effective messaging approach, it will, no doubt, engender public trust in its activities.
Another factor that would help to sustain public confidence is supervision/monitoring. While this has been ongoing, the outcome of such oversights should be shared with the public, particularly, if that could serve as deterrent to the subject or organisation under scrutiny.
Prior to the peak of the yuletide, it was apparent that the artificial scarcity of the nation’s currency, Naira notes, held sway. However, the ‘induced’ scarcity is now a history; thus alleviating the hardship encountered in the early parts of November and up till early days of December, 2023.
There is need, to reiterate once again that collaboration of stakeholders with the CBN and its Governor, Dr. Olayemj Cardoso, ensured that few Naira currency speculators did not have their way as they had planned.
On the spot assessment of the current situation of Naira notes availability at the Deposit Money Banks (DMB), banks’ Automatic Teller Machines (ATM) outlets as well as findings from Point-Of- Sale (POS) operators, affirmed that the artificially induced cash scarcity in circulation has since eased.
In Lagos, a private school proprietor who wished to remain anonymous affirmed that there is now sufficient cash in circulation unlike at the pick of the Yuletide. She said: “Before Christmas, I could not withdraw money from my bank as I wished. It was restricted to certain amounts. That was if you’re even able to go into the banking hall because of restrictions on entry. The crowds the banks witnessed then because ATMs were not dispensing have also disappeared from the banking premises. If you go now, you can withdraw with ease.”
Her experience aligns, to some extent, with that of a POS operator simply identified as Peter in Kubwa, one of the major satellite towns of the Federal Capital Territory (FCT), Abuja. According to him, cash scarcity eased off since December 23, 2023 till date. He explained that when most people were preparing for the Christmas and the New Year celebrations, there was pressure leading to unusual withdrawals from banks and other outlets. “Even that time, we found it difficult to get cash from banks or ATMs. We buy cash from traders and charge others as high N1000 per N10, 000 withdrawal.
But now, according to Peter, the pressure for cash withdrawals has abated and, he noted that they (POS operators) are now even canvassing for customers’ patronages and charging what he considered normal rate of N200 per N10,000 withdrawal.
The CBN which is working in concert with the Deposit Money Banks has ‘fought a good fight’ of ensuring that the banking public do no longer encounter untold hardship in accessing their funds, most especially while engaging in various socioeconomic activities across the country. It is also on record that the CBN has boosted currency in circulation to as much as over N3.4 trillion far above post Naira redesign policy figure of N982.09 Billion at the end of February 2023.
To further allay the fears of Nigerians, the apex bank issued strict warning against any possible collusion by banks with the POS operators to sabotage its efforts towards making cash available in the economy. In a statement in December, 2023, the Acting Director of CBN Corporate Communications Department, Sidi-Ali, Hakama (Mrs.) noted that the apex bank is aware of alleged cases of collusion between some Deposit Money Banks (DMBs) and Point-Of-Sale (PoS) operators that was affecting the availability of cash and disrupting the seamless circulation of the Naira. Even as she frowned at such infractions, she noted that the apex bank was already investigating the reported cases and that sanctions would be meted on anyone or organisation found culpable.
The CBN enlightenment campaigns on the need for individuals to seek alternative payment channels and report any case of unauthorized activities, such as capping and hoarding, by banks or PoS agents to the CBN branches in their locations further contributed, in no small measure, to relieving the hardship associated with the then artificial Naira scarcity.
A key fallout of the CBN’s campaigns on cash availability is the fact the public is now more abreast with the use of alternative digital channels of payment which applications are, apparently, on continuous improvement.
Another plus is the belief, by the public, that the CBN meant its words over the assurances that the re-designed notes: N200, N500 and N1000 as well as the old Naira notes would co-exist as legal tenders until further notice as ruled by the Supreme Court in November, 2023. Some persons who had hoarded the redesigned Naira notes had a rethink by bringing them out for various transactions.
Not a few analysts have expressed commendations that ‘wining the fight’ over the induced scarcity came about through the combined efforts of CBN’s thoughtful policy decisions, DMBs’ compliance and implementation as well as fovourable public responses to the CBN’s messages stablized the current state of cash availability.
