Two problems with naira redesign – Moghalu
Kingsley Moghalu, a former deputy governor of the Central Bank of Nigeria, has voiced his displeasure with the string of crises brought on by the central bank’s naira redesign policy.
The terrible suffering and financial losses endured by Nigerians as a result of the CBN’s mishandled implementation of its naira redesign policy and the involvement of the judiciary in central banking operations, according to Moghalu, demonstrated “clearly how our institutions and Nigeria fail when institutions that are meant to be operationally independent become politicized.”
In a statement late Tuesday, he said currency functions were a core part of any central bank’s mandate, and to that extent, he had no problem with the policy except for two vital issues:
“First, the 90-deadline, which I warned was too short to be effectively executed. Second, the timing is so close to the elections. But, as later became clear, there was a haphazard and incoherent communication of the purposes of the policy.
“In one breath, it was said to be to reduce the money supply and help tame inflation (after the Bank had created and lent N23 trillion to the Federal Government, illegally because that was way beyond approved limits under the CBN Act of 2007). Next, it was promoted as a national security measure to halt kidnapping, Naira hoarding and sundry crimes.
“Then, next, it became about “free and fair elections “ to stop vote-buying,” he stated.
According to Moghalu, as the 2023 presidential election heated up, the last reason evolved into the most crucial and contentious one.
He said, “Expectedly, politicians who felt the policy targeted them complained loudly and wanted the deadline extended, while those who believed it helped their political agendas hailed the tight and impractical deadline and did not want it moved.”
He said Nigerians were trapped between the devil and the deep blue sea of a desire to curb the menace of vote-buying and the effective confiscation of their own money by the implementation failure of the policy.
“Today, whatever may have been the benefits of the naira redesign policy have been canceled out by the economic and social gridlock it has created. We are still suffering from it after the “almighty” presidential election has come and gone. There are several lessons here. One such lesson is the importance of effective risk management that was absent in the conception and execution of the policy,” he added.
For Moghalu, “turning it into a political football was and is a big mistake, and a strong indicator of state failure.”
The Spectator reports that the CBN on Monday in compliance with the March 3 ruling of the Supreme Court declared that the old N200, N500 and N1000 notes remained legal tender till December 31, 2023.
