OPINION: CBN Bares Its Fang

CBN Governor, Mr Godwin Emefiele.

It was an unexpected bang from the CBN Governor, Godwin Emefiele at the end of the Bank’s bimonthly Monetary Policy Committee meeting of July 2021. The fallout of the meeting was the decision by the Bank to suspend sale of forex to BDC operators. Another decisive one followed few days after, though a rehash of same action taken in 2016 was this time not only a warning, but a stern decision to severely penalize abusers of the Naira. The twin-successive actions shook the system.

The Governor while briefing journalists had paused, looked around, raised his head, and unexpectedly dropped the bomb – CBN is suspending sales of foreign exchange to Bureaux de Change (BDC) operators. It was a momentary graveyard silence. The import of his pronouncement instantly elicited uncertainty in the ever-buzzling forex market. No doubt, the sub-sector had not only become riotous but a haven for criminality. This long-expected action did not surprise concerned stakeholders in the economy.

The stoppage of the weekly foreign exchange to the operators was not the only decision taken; it also stopped forthwith the processing of new BDC licenses. The Governor assured the public that forex will be made available for invisibles, medicals, school fees – PTA and BTA, through the deposit money banks. He promised to make forex available to the banks for easy access by the customers, and to ensure seamless operations. He ordered the banks to immediately set up desks in their various branches to attend to needs of customers.

Knowing Nigerians penchant to always take undue advantage of any situation through exploitation of innocent citizens, it urged the public to report any bank that breaches its directive to the Bank. This, the Governor promised to sanction heavily, especially those who made fraudulent request with fake documents, among other infractions.

The decision by the Bank as rationalized by Emefiele was due to rent-seeking attitude of the operators, who had elevated their intransigency in contradiction to their mandate and were involved in money laundering, terrorism sponsorship, and above all, selling forex over and above regulatory benchmark. He also alleged that the operators were aiding illicit financial outflows from the country, among other crimes. In fact, some are under investigation for infractions.

This unpatriotic practice has been one of the major threats to the real exchange value of the Naira, and no sane nation will allow such criminality to thrive.

This action if we must recall, was not the first time by the CBN. In January 2016, it stopped sales of forex to BDCs aimed at sanitizing the sub-sector. The Bank also revised BDCs operational guidelines to forestall similar reasons adduced at its July MPC meeting. Yet, they remained recalcitrant.

To make whole its resolve to sanitize the financial sector and help the exchange value of the Naira, the occasion was thus a reminder and warning to those Nigerians who are fond of molesting and bastardizing the Naira, spraying it at social events – trampling, rumpling or folding it – a practice among bus conductors, artisans and market women and men, even the elite. Some even turned the banknotes to jotters, scribbling on them with impunity. A hallmark of how debased we have become. None among these culprits would fold, write, trample, or squeeze the dollar, Euro, or pounds sterling, rather you will see them lining the wads neatly in their wallets.

The CBN in a statement issued, vowed to prosecute abusers of the Naira, and this time around, it is not going to be with the Nigerian Police alone. The Bank has perfected plans to collaborate with other regulatory and law enforcing institutions of government, such as Federal Inland Revenue Service (FIRS), the Economic and Financial Crimes Commission (EFCC) and the Nigerian Financial Intelligence Unit (NFIU). I wrote on this issue in 2016 in an article themed: Spraying/Hawking Naira at Parties Is Destroying Our Economy and had urged the Nigerian Police and the National Assembly to help give CBN’s action the needed bite, as it has no power of arrest and prosecution. Whether those it has had consultation with (new collaborators) before coming out again on this subject will have the patriotism and will to support the Bank in arresting this menace is a subject for another day.

The Police on this matter is the prime culprit. They see hawkers of banknotes on the street, and rather than perform their constitutional function will turn their faces because they are collaborators or perpetrators. But with new agencies of government coming on board, the EFCC, FIRS and NFIU, it is hoped that the end to this menace may probably be in sight.

The CBN has in the past 6 years been organizing ‘Sensitization Fair’ traversing the length and breadth of the country to educate Nigerians on the implications of abusing the Naira – the cost of replacing mutilated banknotes, among other abuses, as inimical to our heritage and economic prosperity.

Spraying the Naira at social events is known to be majorly prevalent among two major tribes in the country’s southern part, but it has like a cancer creeped to the Northern part too. One of them has even elevated the ‘madness’ to hurling Naira banknotes at each other at social events, portraying us as barbaric. Naira is our identity, our heritage that should be honored, cherished, and protected.

This may however be a subject for debate by some readers of this piece. The Yorubas have a long history of this abuse, but the menace which used to be a strange phenomenon to the Ibos in the past, has been elevated to a menacingly disturbing and embarrassing proportion of impunity, disrespect, and abuse of the currency. Videos of this debasement by abusers abound on internet, Facebook, and Instagram, flaunting this madness to the bewilderment and sensibility of well-meaning Nigerians.

Spraying, some will argue, is not peculiar to we, Nigerians. They will site countries like Poland, Ukraine where monies are sprayed at wedding ceremonies, pinning monies on the bride’s garment or in a purse. Monies are also sprayed at ceremonies in Cuba, Mexico, and the Philippines, but not the barbaric way we do here. More so that, it is illegal in Nigeria. This, negatively, is denting the image of the country among comity of nations and as a people. However, this mistaken flamboyance, as illegal as it is, is not known to have any economic or cultural value.

Abusers of the Naira seem to be oblivious of Section 21(3) of the CBN Act 2007 (as amended) which the Bank has severally published and advertised to deter abusers, states: ‘spraying of, dancing or marching on the Naira or any note issued by the Bank during social occasions or otherwise howsoever shall constitute an abuse and defacing of the Naira or such note and shall be punishable under the law by fines or imprisonment or both.”

Government officials, security agencies and politicians saddled with the power to enact laws, make arrest, and prosecute, are often abusers at social functions where this crime is committed, and they would do nothing to report or support the CBN to effect arrest. It thus suffices here that if these agencies do not have the political will to perform their task, the NASS can take another step further by amending the CBN Act and give the Bank the power to arrest and prosecute.

It is a disturbing reality in Nigeria that those who make laws do not obey them. Public officials cannot flagrantly disobey laws and expect citizens to do otherwise. The law ought not to be a respecter of anyone.

Commercial banks cannot be absolved of complicity in this menace. Genuine bank customers in need of mint notes hardly get from the banks, rather bank staff prefer to sell to hawkers or their agents who hawk for them on the street or at social functions for a pittance.

Going forward with this twin-pronouncement by the CBN, it is hoped that the Police who had compromised, and the EFCC and NFIU, equipped to monitor unscrupulous BDC operators and their collaborators who had all slept on duty all these while, would wake up to their responsibility, particularly with the spate of insecurity currently rocking the country.

It is also of importance that the letters of the law prohibiting spraying, sale or hawking of the Naira be followed to the last letter, as the law should not be a respecter of anyone, no matter how highly placed the person may be. Neither should there be different laws of prosecution for the highly placed and common Nigerians.

This will help the CBN to defend the Naira against the nefarious activities of rent-seekers and speculators as well as conserve money it spends on reprinting of unfit banknotes. It will also help the Bank to deepen its cash-less policy and financial inclusion agenda. This ultimately will enhance the battered image of the country, away from the malaise of trampling on the Naira, scribbling on it, or squeezing it. With this we would begin to earn respect and the Naira gets its value.

However, the CBN should increase the tempo of its advocacy and sensitization across the nation to earn the buy-in of Nigerians on its Clean Notes Policy, designed to guarantee clean and high-quality banknotes in circulation.

Ademola Oyetunji writes from Abuja

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