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CBN: better three hours too soon

by Mustapha Salisu
0 comment 9 minutes read

By Adamu S. Ladan

John Maxwell has achieved great success as an author and leadership expert, and one of his biggest secrets is the Law of timing.

In The 21 Irrefutable Laws of Leadership, Maxwell writes that “good leaders recognize that when to lead is as important as what to do and where to go.”

What does this mean? First, it says that it’s not enough to make the right decision at any given moment: you also need to make sure the timing is right for you to make it. Not understanding the best time to act can lead to resistance, failed projects, or even total disaster.

As Maxwell sees it, there are four possible outcomes to any action. The wrong action at the wrong time leads to disaster; the right action at the wrong time leads to resistance; the wrong action at the right time is a mistake, but the right action at the right time leads to success.

On October 26, 2022, the Governor of the Central Bank of Nigeria, with the approval of  President Muhammadu Buhari announced a new policy which redesign the nation’s currency, naira notes. The policy entails the Central Bank of Nigeria (CBN) to issue new naira notes to replace the existing N200, N500 and N1,000 notes.

In line with this, the CBN launched the new banknotes in November 2022. The new notes came into effect on 15 December 2022. The apex bank also capped withdrawal of the new banknotes at N100,000 per week for individuals, and N500,000 for corporations.

Over the years, the Nigerian legal tender has been redesigned four (4) times; the first time was in 1965 when Nigeria became a republic. The main reason then was to reflect that the currency was now being issued by the Federal Republic of Nigeria.

Many countries have undertaken such exercises and would continue to do so as part of global Currency development policies.

The European Central Bank has in December, 2012 announced the commencement of a process of selecting new designs for its banknotes, the euro. It has since embarked on consultations with the citizens from across the 19 Member nations before a final decision would be taken next year, 2024.

Similarly, the United Kingdom (UK) had as recently as September 2022 concluded a 5-year currency redesign project. The policy was executed in phases over a five-year period. And the government took two years to keep the public aggressively informed of the policy before it commenced its implementation in 2016.


However, controversies have trailed the naira redesign policy from its announcement to implementation. One could recall the disagreements between the CBN Governor, Godwin Emefele and his boss, minister of finance, Zainab Ahmed moment the governor made the announcement. Soon as the policy was unveiled it became the subject of public discourse with Nigerians exhibiting a lack of clear knowledge of it. The minister of finance further compounded the matter when following public criticism disowned the new policy.

This clearly revealed a lack of cohesion within the government over the policy and since then a section within the government drew a line to ensure that the policy never saw the light of day.

Despite the rancour within the ranks of the cabinet, the CBN governor carried the day as he launched the policy. In spite of this, opponents of the policy within and outside the government remained unrelated in faulting the policy.

With a rancorous house, the government pursued the implementation of the redesign notes.

Amidst this, politics also set in.  Candidates of the ruling party view the insistence on the implementation strategy for redesigning policy as a handiwork of fifths columnists within the administration. Thus, an indication that proper mobilisation to carry even the ruling party along was not conducted not to talk of engaging the general public through their representatives.

Be that as it may, one cannot deny the fact that the overriding reason for changing the selected naira note denominations is to mop up the huge excess cash outside the control of the CBN.

This, ostensibly according to finance experts is a potent tool to tame inflation.

It’s also believed that the excess money in circulation is the proceeds of various economic crimes committed by some individuals in the country.

It’s assumed therefore that the currency redesign would not only assist in the fight against corruption but also will reduce crimes like kidnapping, illicit drugs business and smuggling among other factors pushing the tide of insecurity in the country. This is based on the premise that the exercise would control circulation of the higher denomination used for corruption, and the movement of such funds from the banking system could be tracked

Other problems the policy aims at addressing include, the worsening shortage of clean and fit banknotes as well as increasing ease and risk of counterfeiting as evidenced by several security reports.

That not withstanding, critics punched the policy from many angles. The World Bank for instance, warned the redesigned naira may have negative effect on economic activity especially poor Nigerians due to its timing and short transition period.

 In the goods market, an unexpected appreciation to the exchange rate of the domestic currency made exports more expensive and imports less expensive. As a result, the competition from foreign markets has decreased the demand for domestic products, decreasing domestic output and price. There have been reports of increased activities in border towns due to falling prices of these foreign goods.

This would have negative infact on the local industries. Already stock prices in our local markets have dropped drastically. Most affected in this are local farmers who depend on the sales of their produce to meet their daily needs. The crumbling of the local produce prices has consequently reduced the purchasing power of the locals in particular.

On the other hand, we have earlier witnessed  an inflation trend caused by the rise in general prices. This was triggered by the rush to get rid of the old currencies leading to increased liquidity and putting inflationary pressure on prices of inputs, intermediate products and finished goods and services.

It is  feared that the disruption being caused by the scarcity of the new notes may continue to muffle consumer and business sentiments. Already there is drastic cut in spending by individuals especially on non essential items and services. The people are indeed forced to austere living. And this could lead to the policy’s poor performance.

This is throwing the population especially the poor and vulnerable into difficult situation. Although authorities have continued to give assurances that the pains being experienced would be short lived there is growing anger and frustration among the populace. 

Concerned about the timing of the policy and its implications on the electoral fortunes of their party, APC governors met with president Muhammadu Buhari and voiced their worries. This is more so as it’s being implemented while the general election is barely weeks ahead.

Although the government has categorically said the policy aimed at among others stemming corruption in the forthcoming elections, the ruling party presidential candidate, Ahmed Bola Tinubu had bitterly complained alleging that it targeted him.

Tinubu and the APC governors fears could be well founded because the electorates who bear the brunt of the policy may not separate the chap from the grain. They may not distinguish between the APC candidates and the action of the current government. And this may have monumental consequences for the APC more especially as the opposition are mischievously cashing on the situation to bolster their support base.

This is putting the APC and its candidates in what Americans refer to Catch 22 situation.

It will also be foolhardy for the CBN to expect the electorates to vote for the APC under prevailing situation. It’s also becoming a herculean task for the APC candidates distancing the party from the hardship occasioned by the new naira notes imbroglio. This, even as they tried hard to pass the blame on saboteurs.

In what could be a face saving measure about the effects the CBN’s policy is having on the residents of their states, three APC governments of Kaduna, Kogi and Zamfara have today, (Monday, 6th February, 2023) dragged the Federal government before the Supreme Court, seeking a restraining order to stop the full implementation of the policy.

Reading the situation therefore, it needs no soothsayer to say that there is a confusion in the country requiring decisive action from our leaders. This confusion aroused from the failure of our leaders to take into consideration many other factors beyond their immediate justification before implementing the naira redesign policy.

No one doubt the genuine intention of the current administration which led to the naira redesign but from the prevailing quagmire it has thrown the country into, it is obvious our leaders did not consult properly especially to  ensure that the policy stands the test of timing.

It’s also evidently clear that the pulses of key influencers in the polity and the economy weren’t taken into consideration before driving the policy.

It was expected that the president’s experience in 1984 would’ve guided him to succeed in this exercise. But if the outcome we are witnessing is any thing to go by then that experience had not played out in this circumstance.

Undoubtedly, the president has demonstrated tremendous courage in taking this tougher decision to redesign the currency after being long overdue. But the timing and manner of its implementation is putting spanner on the genuine intention.

Yes, pundits say reading the situation and knowing what to do are not enough to make you succeed in leadership however, only the right action at the right time will bring success. Anything else exacts a high price.

It’s pertinent to suggest that the government takes decisive steps to address the growing public outrage over implementation of the policy. As Williams Shakespeare said, Better three hours too soon than a minute too late.

This involves taking all stakeholders into confidence in coming up with strategies to promptly mitigate and skillfully tackle the hardships occasioned by the exercise. This is in order to avert the avoidable unpleasant consequences the public disenchantment over the distribution of the redesign notes might result into.

While no right thinking mind will seek for the reversal of the policy due to the prevailing hiccups, it behooves on the CBN to apply caution and ensure that its implementation is in tune with the best practice to avoid throwing away the baby with the bathwater.

Adamu S. Ladan is the Executive Director,  Media Centre for Research Education and Development  (Mcred)

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