Again, Nigerians say ‘No’

WHAT on earth would make the Central
Bank of Nigeria (CBN) seek to exhume
the plan to redesign the naira so soon
after Nigerians resoundingly rejected it?
The pull of exigency or the lure of
institutional hubris? Whichever it is, the
attempt by the CBN to revisit the naira
redesign issue at this time is both
inexplicable and wrong.
Ten months ago, precisely on September
20, 2012, President Goodluck Jonathan
had, in the height of the opposition to
the measure ordered the apex bank to
halt its earlier announced currency
restructuring to allow for further
"enlightenment and consultation". We
consider it unimaginable that the CBN
would, in less than one year, seek to
upturn the order. Worse however is that
the apex bank has remained far less
convincing on a project expected to gulp
billions of taxpayers' funds now than it
was 10 months ago.
We consider it worrisome that Sanusi
Lamido Sanusi's CBN wants the naira
redesign project so bad – so bad it would
go against the grain of public opinion as it
is wont to do. Clearly, this is the only way
to make sense of the statement credited
to him while appearing before members
of the House of Representatives
Committee on Banking and Currency last
week that "one of the reasons we wanted
to have a restructuring of the redesign of
the currency a few months ago was
because many of our notes had been in
existence for upward of eight or even 10
years… the best practice is that within a
period of five to eight years you redesign
the currency, after which counterfeiters
tend to catch up". That was hubris at
best.
Why are Nigerians opposed to the idea of
wholesale redesign of the naira? This,
unfortunately, is where the CBN chooses
to misrepresent the argument. Just as
nobody questions the exercise as the
prerogative of the CBN; the issue is the
apex bank's unconvincing statement on
the relationship between the cost of the
exercise and the benefits. Aside being a
drain on the public till, it promises to be a
major source of capital flight. We do not
see anything of the so-called best
practices argument as obviating these
facts. Indeed, we suspect that the only
reason the idea keeps popping up is
because the CBN has inexhaustible funds
to play with.
Shouldn't the nation by now have learnt
enough from such costly
experimentations? The lesson of the
nation's romance with Securency
International, manufacturer of polymer
notes scandal is still fresh. A bribe of
N750 million was said to have been paid
to some Nigerian officials by the
Australian firm. Whereas their foreign
counterparts have been convicted, their
Nigerian accomplices are walking free.
That is not even all; only recently it was
revealed that the polymer was a far
poorer alternative to what was previously
in use.
Is someone again attempting to lead the
nation by the nose?
The point is that the CBN admits that
only a fraction of the processed notes in
circulation is fake. It's percentage of fake
notes processed was given as 3.9 per
cent in 2007, six percent in 2008, 8.4
percent in 2009, 7.4 per cent in 2010,
5.4 per cent in 2011 and 8.4 percent in
2012. If this is the case, why go the
whole hog of redesign?
Shouldn't the addition of extra security
features have sufficed if it is about
curbing the menace of counterfeiting?
Wouldn't that be far less costly?
At this time, Nigerians ought to worry
about the apex bank's fixation with
currency restructuring. Redesigning the
naira seems to us as the least of the
problems that the CBN has to contend
with; if the apex bank is in doubt of
where to start, a good place is the current
out-of-reach cost of funds.