By Ayo Baje
Most important, the Central Bank must keep public opinion on its side, because the public is the ultimate source of its power and independence.” – International Monetary Fund (IMF) report titled: “Rethinking Monetary Policy in a Changing World”.
On February 3, 2023, the media was awash with the report of an unidentified man who slumped and died after spending hours at a new generation bank in Agbor, Delta state in what turned out a fruitless effort to withdraw some money.
Similarly, some three days later, on February 6, 2023, a
pregnant woman in Kasuwan Magani in Kajuru LGA of the southern part of Kaduna
state died when her husband was unable to withdraw the needed cash to attend to
her critical health challenges.
And unfortunately, another helpless Nigerian, a popular
presenter on Fresh FM radio, called Baba Bintin, died while trekking to work on
a fateful Saturday.
These listed three voiceless victims were but a few of the
citizens who have gone through harrowing experiences, all due to the federal
government’s recent cashless policy and the Naira redesign issue that have
brought many to their begging knees. But do the brains behind the policy really
care about us? One is talking of course, about the Central Bank Governor,
Godwin Emefiele and the Attorney General of the Federation and Minister of
Justice, Abubakar Malami, whom Mister President has passed the buck to as
having deliberately disobeyed the Supreme Court judgement. That is, the one
directing that the old notes be accepted as the legal tender till December 31,
2023.
As aptly captured by Agusto and Co on March 3, 2023, the hardest
hit were the most vulnerable members of the society including the poor, the
unbanked and the rural dwellers.
Perhaps, the President Muhammadu Buhari-led administration
should have taken into cognisance that the country is still a largely
cash-dependent economy. That the informal economic activity accounts for an
approximately 65% of the Gross Domestic Product (GDP), dominated, of course, by
the Micro, Small and Medium Scale Enterprises.
In fact, as
broken down by the report: “These MSMEs account for 96% of businesses and 86.3%
of the national workforce.
“These are mostly cash-based businesses – particularly the micro
enterprises which account for 99.8% of Nigeria’s 37.1 million MSMEs”. The
import of this is enormous. And the impact has been economically debilitating,
socially destabilizing and concomitantly castrating on a people battling with
daily survival!
Indeed, it is the height of cruelty for a government to embark
on a cashless policy without first and foremost fully involving the economic
think-tank! Worse still, coming at an election period and under an inclement
situation with frequent network failures underscores the cluelessness of the
policy makers.
For instance, though the mobile phone ownership in Nigeria is
estimated at 81% by Enhancing Financial Innovation and Access, internet
penetration remains at a dismal 44.3%. In a similar vein, though the banks
embarked on Unstructured Supplementary Service Data launched by them and TelCos
with the aim to enable deeper mobile penetration in communities, especially
those lacking data, there have, however, been network hiccups.
Besides these technical hitches, the Central Bank of Nigeria
ought to have effectively communicated the rationale behind its cashless policy
to the public. With that, the average Nigerian would understand why the policy
was coming into effect in the first place and the role he has to play for it to
succeed. Unfortunately, the CBN under Emefiele has allegedly pandered to the
wishes of some influential people in the corridors of political power! Rather,
it should have stuck to its constitutional mandate and ensure its freedom at
all times.
As well stated by Funmi Odude, writing for Financial Nigeria,
“research has shown that central banks that are more independent achieve lower
inflation than those with closer ties to their governments”. In her words of
caution: “reckless pandering to the financing request of the government, the
CBN is fostering financial instability – the very opposite of its core
mandate”. This has become a serious paradigm shift that has seen millions of
Nigerians holding the short end of the country’s economic stick.
With some pro-Ahmed Tinubu governors alleging that the cashless
policy, along with the redesign of the Naira notes, was premeditated and
targeted at the current president-elect and the public anger triggered by the
scarcity of notes leading to the burning down of some banks, some hard lessons
should be learnt. This is significantly so such that whoever takes over from
Emefiele will not repeat the mistakes of the past.
One of such is that both elected representatives of the people
and their appointees should stop personalizing political power. Instead, they
should be driven by national interest and function within the ambit of the
statutory regulations guiding their functions always.
Ordinarily, the CBN should keep to its mandate to ensure
monetary and price stability, promote sound financial system, issue legal
tender currency as well as provide economic and financial advice to the federal
government. As in other climes, the CBN governor should be at the background
acting as catalyst for economic policies and be strictly apolitical. Issues of
showing active interest in politics, on the platform of the ruling political
party or going to court to avoid getting arrested for one infraction or the
other are seen as an aberration. So should it be here in Nigeria.
Above all, economic policies should be in line with the
interests and needs of the people and not otherwise.
*Baje is a commentator on public
issues
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