IMF, state governors pressurize Nigerian govt to extend naira deadline, as Buhari summons Emefiele

Buhari, Emefiele, IMF, state governors, NGF, FG, CBN, naira deadline, new naira, old naira, Nigerian government
President Buhari and CBN governor

IMF, state governors pressurize Nigerian govt to extend naira deadline, as Buhari summons Emefiele

The International Monetary Fund (IMF) has asked the Central Bank of Nigeria (CBN) to consider extending the February 10 deadline for the swapping of old naira notes.

IMF in a statement on Wednesday cited disruptions in trade and payments resulting from the exercise.

“In light of hardships caused by disruptions to trade and payments due to the shortage of new bank notes available to the public, in spite of measures introduced by the CBN to mitigate the challenges in the banknote swap process, the IMF encourages the CBN to consider extending the deadline, should problems persist in the next few days leading up to the February 10, 2023 deadline,” Ari Aisen , the Fund’s resident representative to Nigeria, said in statement on Wednesday.

The statement was signed on his behalf by Laraba S. Bonnet, office manager for Resident Representation for Nigeria.

The statement came as the Supreme Court on Wednesday restrained the CBN from going ahead with the February 10 deadline. The Court gave the order in a ruling on a case brought before it by three State governments.

CBN had originally fixed the deadline for January 31 but had to extend it in response to pressures from Nigerians.

State governors write President Buhari

Meanwhile, the Nigeria Governors Forum (NGF) has called on President Muhammadu Buhari to extend the timeframe for the implementation of the naira redesign policy.

The NGF also demanded a review of the Central Bank of Nigeria’s (CBN) cashless policy.

The demands followed protests and growing hardship across the country following the February 10 deadline for the swap of the old notes.

The NGF’s position is contained in a letter addressed to Buhari, and signed by its chairman, the governor of Sokoto State, Aminu Waziri Tambuwal.

According to the NGF, the policy had resulted in riots and protests from Nigerians who are clearly frustrated by this policy.

In the letter to Buhari, the NGF said while the policy is “intended to address the contradictions in our fiscal environment”, poor execution of it would “hurt the economy and have a disproportionate impact on the most vulnerable”.

The NGF explained that state-by-state analysis of the policy has shown that it would affect “several intra-state security arrangements which basically depend on cash transactions to ensure effective implementation”.

“Even though the identified constraints are to be found in almost every state in the country, they are particularly evident in states like Borno in the North East and Bayelsa in the south-south where one finds a pitiable number of banks located only in the State capital which would basically render the workability of the new policies impossible for now.

“The speed of implementation of the policy is a recipe for anarchy in the country and we urge a re-think of the policy. Regarding the reviewed cash withdrawal limit, we have found from synthesizing experiences across the country that the informal sector in the States, particularly in the Northern and Niger Delta States almost wholly depends on cash transactions because of the nature of their trade.

“It is our view, Sir, that an immediate limitation in the use of cash without robust engagement with stakeholders as well as the provision of accessible alternatives will deny such people legitimate sources of livelihood.

“We fear that the cumulative effect of these unintended but very profound and probable consequences of these policies would be a rise in the number of unemployed and unengaged persons who will inevitably resort to crime to make ends meet. This has a dangerous implication for the security of the country and the potential to derail Mr President’s security agenda,” the letter reads.

The NGF noted the “remarkably unavailability” of the new naira notes, and the fact that some banks were rejecting the old notes even though they were still legal tender.

The governors said, “These have resulted in riots and protests from Nigerians who are clearly frustrated by this policy.

“In light of the above, we most respectfully pray Mr President to approve an expanded time frame for the implementation of the policy and direct the CBN to make the new notes available within the enlarged time frame.

“Direct a thorough assessment of the prevailing economic conditions related to the implementation of the currency change and cash withdrawal limit policies. Direct that States be involved in future discussions regarding the policies in order to have revised policies that would recognize and consider States’ peculiarities.

“Consider and approve the putting in place of necessary infrastructure and facilities within a reasonable time frame to facilitate the implementation of the policy, including introducing incentives to encourage the use of digital payment solutions. This will help reduce the pressure on physical cash and promote financial inclusion, investing in infrastructure to expand access to financial services.

“Direct that a robust enlightenment campaign be mounted to create sufficient awareness in the citizens of the thrust of the policy. This will help people better understand the implications of the naira redesign and cash withdrawal limits and how to use digital payments platforms.”

Buhari summons Emiefele

In a related development, President Buhari has summoned the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele to the presidential villa in Abuja, just hours after the Supreme Court ruling of Wednesday that stopped the February 10 deadline for the validity old naira notes in Nigeria, as per News Point Nigeria.

As of the time this report was published, the outcome of the meeting was not known.


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