Moghalu: Naira redesign has two issues

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 politicised.”

He added in a statement late on Tuesday that currency operations were an essential component of any central bank’s mandate and that, in that regard, he had no objections to the policy, with the exception of two crucial points:

“First, let’s talk about the 90-day deadline, which, as I said, was too short to be used properly. Second, it was so near to election time. But, as was later discovered, the policy’s objectives were communicated in a disorganized and confusing manner.

“In one breath, it was claimed to assist control inflation and the money supply” (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). Then, it was marketed as a national security tool to stop kidnapping, Naira hoarding, and other other crimes.

Then, he said, “it turned into ‘free and fair elections’ to stop vote-buying.

According to Moghalu, as the 2023 presidential election heated up, the last reason evolved into the most crucial and contentious one.

“Expectedly,” he wrote, “politicians who felt the policy targeted them complained loudly and wanted the deadline extended, while those who thought it helped their own political goals hailed the tight and unworkable deadline and did not want it moved.”

He claimed that because of their desire to stop the evil of vote-buying and the effective theft of their own money caused by the policy’s implementation failure, Nigerians were caught between the devil and the deep blue sea.

“Now, any advantages the naira redesign program may have had are negated by the chaos it has brought about in the economy and society. Even after the “almighty” presidential election, we are still dealing with it. This has a number of teachings. One such lesson is the significance of efficient risk management, which was clearly lacking in the design and implementation of the policy, the expert continued.

Making it a political football, in Moghalu’s opinion, “was and remains a tremendous blunder, and a strong indicator of governmental failure.”

According to sources from DAILYUPDATES, the CBN announced on Monday that the old N200, N500, and N1000 notes would continue to be valid until December 31, 2023, in accordance with the Supreme Court’s decision from March 3.