Deprecated: Function create_function() is deprecated in /home/tellng/public_html/wp-content/themes/dw-focus_1.0.6_theme/inc/widgets/dw-focus-categories.php on line 404

Deprecated: Function create_function() is deprecated in /home/tellng/public_html/wp-content/themes/dw-focus_1.0.6_theme/inc/widgets/dw-focus-recent-posts.php on line 495

Deprecated: Function create_function() is deprecated in /home/tellng/public_html/wp-content/themes/dw-focus_1.0.6_theme/inc/widgets/dw-focus-recent-posts.php on line 496

Deprecated: Function create_function() is deprecated in /home/tellng/public_html/wp-content/themes/dw-focus_1.0.6_theme/inc/widgets/dw-focus-recent-posts.php on line 497

Deprecated: Function create_function() is deprecated in /home/tellng/public_html/wp-content/themes/dw-focus_1.0.6_theme/inc/widgets/dw-focus-slider.php on line 247

Deprecated: Function create_function() is deprecated in /home/tellng/public_html/wp-content/themes/dw-focus_1.0.6_theme/inc/widgets/dw-focus-carousel.php on line 197

Deprecated: Function create_function() is deprecated in /home/tellng/public_html/wp-content/themes/dw-focus_1.0.6_theme/inc/widgets/dw-focus-tabs.php on line 114

Deprecated: Function create_function() is deprecated in /home/tellng/public_html/wp-content/themes/dw-focus_1.0.6_theme/inc/widgets/dw-focus-accordion.php on line 65

Deprecated: Function create_function() is deprecated in /home/tellng/public_html/wp-content/themes/dw-focus_1.0.6_theme/inc/widgets/dw-focus-latest-headlines.php on line 144

Deprecated: Function create_function() is deprecated in /home/tellng/public_html/wp-content/themes/dw-focus_1.0.6_theme/inc/widgets/dw-focus-latest-comments.php on line 100

Deprecated: The called constructor method for WP_Widget class in dw_focus_categories_Widget is deprecated since version 4.3.0! Use __construct() instead. in /home/tellng/public_html/wp-includes/functions.php on line 6078

Deprecated: The called constructor method for WP_Widget class in dw_focus_tabs_Widget is deprecated since version 4.3.0! Use __construct() instead. in /home/tellng/public_html/wp-includes/functions.php on line 6078

Deprecated: The called constructor method for WP_Widget class in dw_focus_accordion_Widget is deprecated since version 4.3.0! Use __construct() instead. in /home/tellng/public_html/wp-includes/functions.php on line 6078
When a Good Policy Gets Mismanaged - TELL Magazine

When a Good Policy Gets Mismanaged

Edo State, Benin city Riot 15/02/2023

The CBN admitted upfront, when they put out their intention of this policy, that they have lost control of the currency in circulation, with up-to 80% of the currency in circulation, outside the Banking system.
For this writer, this was a good enough reason to give the policy support.
 It was thought that the large cash in the system, has implication for inflation, and also thought to be, the major fuel, for much of the corruption we see around us, and the kidnapping business that has grown in leaps and abounds in recent times. It was also seen, to some extent, as a way to reduce the vote buying tendencies of our politicians.

The confusion the CBN has caused by their mismanagement of the currency swap policy, can only be remedied by a temporal halt on the deadline for the old notes to remain legal tender. Share on X

No matter what side of the debate you are on, no one foresaw the large scale mismanagement and the wide spread suffering that this policy was to create, except for a fellow on one of my forums who warned, that there was confusion ahead. He stated this in reaction to my write up in support for the policy.
I give him credit for his prescience, but even then, he could not have predicted the level of dislocation this was going to cause. Some of the scenes on social media, clearly depict all the suffering and associated problems this has engendered.

Adding to the chaos, are conflicting court decisions, policy challenges and litigations. It is taking us back to 1993, when the Supreme Court in Nigeria, said they have no jurisdiction in the Moshood Abiola matter. The rest is history as they say. If that decision had been otherwise, Nigeria may have taken a different trajectory

We are again seeing a situation, where the highest judicial officer in the land, the Attorney General says the Supreme Court has no jurisdiction to intervene in the matter. What is the import of the AG’s statement?  We are not yet sure, or what that means.

It was also bad planning that no special arrangements were made for the large unbanked population, those without Bank Accounts, estimated at 66% of the population… Share on X

 Does that mean the government will not obey the ruling? and what will be the implication of that? Is the Supreme Court no longer the final authority in any judicial matter in the land, no matter how ridiculous, their position? Are we not heading for anarchy with this posturing? I think, we should obey the Supreme Court, no matter what the technical legal position might be.

 This was more a social ruling needed to give respite, in the midst of the confusion and the suffering all around. What is legally right, at this point, has to take everything happening into consideration.
The confusion the CBN has caused by their mismanagement of the currency swap policy, can only be remedied by a temporal halt on the deadline for the old notes to remain legal tender. The fact that the new notes are not available and may not be massively available in the few days left, means that unless there is a shift in the position, the crisis and suffering will continue and the economy will take a huge hit, and may even lead to another recession, something we cannot afford right now. The economy is already in trouble; any recession will have very bad implication for a long time to come.
The amazing aspect of this mismanagement, is the fact that, all the information we are now getting was available to the CBN to plan with. The CBN knows there is a large population of the unbanked, they know the telecom infrastructure is already stretched, and a large demand on its services at this time, will create more problems. We have seen how overwhelmed, the system experienced, in the last few days, those who wanted to bank on their phones, were unable to do so. The CBN knew the capacity of our Mint, and should have made adequate preparation to match the capacity, with the expected amounts of the new Notes to be swapped.
    The information that the Mint does not have sufficient papers to print the new notes has now been denied by the CBN. The CBN should have been prepared to match the printing of the new Notes, with the amounts the Banks were taking in, in old Notes, in real time.
In today’s world of instant data availability, the CBN was in a position to get reports from Banks, that could have aided the Mint in reacting to the demand for New Notes, to continuously match, what the Banks were taking into their vaults daily.

The statement credited to the CBN Governor, that they did not anticipate the challenges and the ensuing crisis, is a clear indication, they did not do any impact assessment. That again is unforgivable. Share on X

  If the information that only N500bn was available on the day of the first deadline, to replace over 2 trillion Naira of the old Notes, the CBN said was already with the Banks is true, then they are responsible for this manufactured chaos.
 There is no way to explain such bad planning. It was also bad planning that no special arrangements were made for the large unbanked population, those without Bank Accounts, estimated at 66% of the population, as put out by some Media outlets. That they were not taken into consideration in CBN planning, was ridiculous.  The fact, that only 9% of the population use digital banking outlets, makes arrangements for special outlets to be even more important. Setting up several cash points in every local Government Area, especially those that have no Bank branches, was a necessity.  Even in the 1984 currency swap exercise, that was also very difficult to manage, there were opportunities for the rural populace, that had no banking facilities to go to their Local Government offices to make a swap of their old notes, why did the CBN not even think of this, refusing completely, to learn from history.

 The emergency recruitment of 400 POS Operators was an afterthought, and would have worked better, if this was all part of the strategy, to get to the unbanked population, the opportunity to use this outlet.
The initial instructions to Banks to restrict their disbursement of the New Cash, via ATMs only, was also a bad strategy. No one knows what that was supposed to achieve. There are not enough ATMs as it were, and most, work badly, most times, relying on this for wide distribution was one way thinking, to fight the black money in the system and slow politicians from having money available to buy votes. This thinking, completely forgot, the economy was a much bigger deal to worry about.

The statement credited to the CBN Governor, that they did not anticipate the challenges and the ensuing crisis, is a clear indication, they did not do any impact assessment. That again is unforgivable. Public policy options that will affect everyone in the country, needs proper assessment and the impact measured, to give policy makers, proper preparation, against all what ifs, and alternatives put in place. Let’s hope this will all be sorted out quickly, the mistakes were avoidable.
 Despite, this huge disruption to our lives and the impact it will make on the economy, there are still some benefits derivable, when it all unfolds.

Victor Ogiemwonyi, a retired Investment Banker, writes from Ikoyi, Lagos.

Author

Follow Us on Social Media


Notice: Trying to access array offset on value of type null in /home/tellng/public_html/wp-content/themes/dw-focus_1.0.6_theme/functions.php on line 1037

Notice: Trying to access array offset on value of type null in /home/tellng/public_html/wp-content/themes/dw-focus_1.0.6_theme/functions.php on line 1037

Notice: Trying to access array offset on value of type null in /home/tellng/public_html/wp-content/themes/dw-focus_1.0.6_theme/functions.php on line 1037

Notice: Trying to access array offset on value of type null in /home/tellng/public_html/wp-content/themes/dw-focus_1.0.6_theme/functions.php on line 1037

Ogiemwonyi, a retired Investment Banker writes from Ikoyi, Lagos.

Top
Share
Share
error: Content is protected !!
+
WhatsApp WhatsApp us