Nigerians suffering from faulty implementation of CBN’s Naira redesign policy

A former Central Bank of Nigeria’s Deputy Governor, Kingsley Moghalu, says the terrible suffering and economic loss Nigerians experienced as a result of the faulty implementation of the CBN’s naira redesign policy and the entry of the judiciary into central banking functions showed “clearly how our institutions and Nigeria fail when institutions that are meant to be operationally independent become politicised.”

In a statement late Tuesday, he said currency functions were a core part of any central bank’s mandate, and to that extent, he had no problem with the policy except for two vital issues:

“First, the 90-deadline, which I warned was too short to be effectively executed. Second, the timing, so close to the elections. But, as later became clear, there was a haphazard and incoherent communication of the purposes of the policy.

“In one breath, it was said to be to reduce the money supply and help tame inflation (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). Next, it was promoted as a national security measure to halt kidnapping, Naira hoarding and sundry crimes.

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“Then, next, it became about “free and fair elections “to stop vote-buying,” he stated.

Moghalu noted that the last reason became the most important and controversial reason as the tempo of the 2023 presidential contest rose to a boiling point.

He said, “Expectedly, politicians who felt the policy targeted them complained loudly and wanted the deadline extended, while those who believed it helped their own political agendas hailed the tight and impractical deadline and did not want it moved.”

He said Nigerians were trapped between the devil and the deep blue sea of a desire to curb the menace of vote-buying and the effective confiscation of their own money by the implementation failure of the policy.

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“Today, whatever may have been the benefits of the naira redesign policy have been cancelled out by the economic and social gridlock it has created. We are still suffering from it, after the “almighty” presidential election has come and gone. There are several lessons here. One such lesson is the importance of effective risk management that was evidently absent in the conception and execution of the policy,” he added.

For Moghalu, “turning it into a political football was and is a big mistake, and a strong indicator of state failure.”