Naira Redesign: How CBN Deceived Nigerians, Mopped Up Over N3Trn And Released N402Bn To Banks

Femi Falana, a Senior Advocate of Nigeria, has called for the prosecution of the former Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, and the CBN management under his tenure for incitement and culpable homicide.

Falana accused them of deceiving Nigerians that enough cash was distributed to commercial banks to replace the old naira notes that were withdrawn from circulation.

Falana revealed that during the implementation of the naira redesign policy, which was adopted under Emefiele’s leadership, only N402 billion new naira notes were released to deposit banks, while N3.5 trillion old naira notes were mopped up from the system.

He said that this created a huge gap between the demand and supply of cash in the country, leading to acute hardship for Nigerians.

Falana also blamed the CBN for causing the death of some Nigerians who were killed as a result of the incitement of members of the public by the apex bank.

He said that the CBN should pay compensation to the families of the victims and apologize to Nigerians for the failed policy.

The naira redesign policy was initiated by the CBN in January 2023, with the aim of reducing the cost of printing and maintaining currency, enhancing security features, and facilitating cashless transactions.

The CBN claimed that it had supplied enough new naira notes to commercial banks in line with the policy, and that Nigerians had returned about N1.9 trillion old naira notes to banks, with N500 billion more to go.

The CBN also directed security agencies to arrest and prosecute bank officials who were accused of sabotaging the new currency policy.

 However, many Nigerians complained of scarcity of cash and long queues at banks and ATMs, as they struggled to swap their old notes for new ones.

In February 2023, before the presidential election, former President Muhammadu Buhari said that N2.1 trillion worth of old naira notes had been returned to banks, which were mandated to return same to the CBN. He said that the policy had achieved a success rate of over 75 percent.

However, governors elected under the ruling All Progressive Congress (APC) appealed to Buhari to allow both the old and new naira notes to co-exist to ease the suffering and bring succour to Nigerians.

 Former Governor Nasir El-Rufai of Kaduna State said that Nigerians were suffering and traders were losing their goods due to a lack of patronage. The governors added that while the CBN mopped up over N2 trillion of the old notes, it printed only N300 billion, which was not enough.

Due to the hardship caused to Nigerians, Falana and Falana’s Chambers wrote to the CBN on February 16, 2023, requesting information on the disbursement of new naira notes to banks.

In its response dated September 13, 2023, which was signed by Aminu Mohammed for the Director and Secretary of the Board, the apex bank provided the details of funds disbursed to banks between November 2022 and August 2023.

The response showed that only N402 billion new naira notes were released to deposit banks during this period, while N3.5 trillion old naira notes were mopped up from the system. This means that there was a huge shortfall of N3.1 trillion in cash circulation in the country.

The information says Access Bank got N45.6 billion, Citibank got N1.4 billion, Ecobank received about N19 billion; First Bank PLC got N36.8 billion, FCMB got N20.5 billion, and Fidelity Bank got N21.5 billion.

Others include Zenith Bank which got N48.8 billion; UBA, N41.1 billion, Union Bank, N19.7 billion; Unity Bank N12.5 billion, Wema Bank, N12.1 billion while Polaris received N14.8 and StanbicIBTC Bank, N16.2 billion.

Globus Bank, N3.6 billion; GTCO, N26.9 billion; Heritage, N2.1 billion; Jaiz, N9.6 billion; Keystone, N9.8 billion; Lotus, N2.2 billion; Optimus Bank, N40 million; Parallex, N879 million; Premium Trust, N2.5 billion; Providus Bank, N2.4 billion; Unity Bank, N12.5 billion; Standard Chartered, N2.5 billion; Sterling Bank, N14.9 billion; Sun Trust, N1.4 billion; Tai, N3.5 billion; Titan Trust, N1.6 billion and others, N8.3 billion.

Falana in a statement on Sunday said, “In January 2023, the Central Bank of Nigeria claimed that it had supplied the commercial banks in the country with enough cash in line with its currency design policy.

“The apex bank purportedly directed security agencies to arrest and prosecute bank officials who were accused of sabotaging the new currency policy. Based on the statement, Nigerians trooped to the banks to collect cash. As the cash was insufficient, customers became angry.

“The mass anger over the cash crunch provoked customers who burnt bank buildings and destroyed Automated Teller Machines in some states. The violence paralysed social and economic activities and claimed not less than five lives while many others were injured. But for the Supreme Court, which extended the deadline for the withdrawal of the old Naira notes up until December 31, 2023, the cash crunch would have made life more unbearable for the Nigerian people.

“Convinced that the suspended governor of the Central Bank, Mr. Emefiele had lied and deceived the Nigerian people, we requested information about the actual amount made available to each of the commercial banks. In its belated response to our request, the CBN has now confirmed that it issued redesigned currency notes of N402 billion to the banks.

“Having misled Nigerians to believe that sufficient cash was distributed to commercial banks to replace the sum of N3.5 trillion mopped up from customers, Mr. Godwin Emefiele and the entire management of the CBN ought to be prosecuted for incitement and culpable homicide. In addition, the CBN should rebuild the bank buildings that were destroyed and pay compensation to the families of those who were killed as a result of the incitement of members of the public.”

Falana said that this was a clear case of fraud and mismanagement by the CBN under Emefiele’s leadership. He said that the CBN lied to Nigerians about the availability of cash and incited them against bank officials who were innocent.

He said that some Nigerians lost their lives as a result of mob attacks or stampedes at banks or ATMs due to frustration and anger.

Falana said that he would file a suit against Emefiele and other CBN officials involved in this policy for incitement and culpable homicide.

He also demanded that the CBN should pay compensation to the families of those who were killed as a result of this policy and apologize to Nigerians for putting them through unnecessary hardship. He said that he would also seek an injunction to stop further implementation of this policy until it is reviewed and amended.

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