Chukwu urges CBN to recalibrate Naira Redesign Policy

The Central Ban of Nigeria has been urged to direct banks to re-open the payment of Cash over the counter and limit Cash withdrawal per account holder to 100 thousand Naira Weekly.

The Chief Executive Officer of Cowry Asset Management Limited, Johnson Chukwu, gave this advise while reacting to the current confusion and chaos surrounding the currency swap of the old Naira Notes with the New ones.

Mr Chukwu who said the situation is dire near his office on the Island and in Lekki where he stays added that something needs to be done quickly to address the situation and ensure Nigerians do not continue to suffer unduly.

He said if the Central Bank of Nigeria does the right thing and takes the right step, it can still achieve the objective of the Naira Redesign and Currency Swap Policy.

He described the situation around Banks and Point of Sales Centres as one characterised with large number of people on the queues looking to get Cash to power their everyday activities.

Mr Chukwu said the current pressure being experienced across the country is more pronounced in the cities with the rural areas under considerably less pressure.

According to Mr Chukwu, the difference is due to the fact that more commercial and cash reliant activities take place within the Cities than in the rural areas where people in most cases have less need for Cash especially with them more or less growing what they need.

Mr Chukwu who was speaking with TVC News’s Tolulope Ogunjobi on Business Nigeria on Friday afternoon said the situation does not mean that the rural areas do not need cash too.

On what is behind the decision of those in the chain of money exchange in Nigeria have behaved the way many have alleged over the last few weeks, he said it is only a case of demand and supply which should be addressed properly.

Going Further He said the decision to go ahead with the Currency Redesign and Swap Policy has an underlying Political Motive which he said he does not disagree with but posited it should be done in a more orderly manner.

He said the aim of preventing Vote buying can easily be achieved if people are allowed to have access to their accounts by ensuring nobody irrespective of the number of accounts they have are unable to withdraw more than 100000.

Mr Chukwu posited that this will ensure that the most anybody can withdraw is 300000 noting that not many Nigerians don’t have more than 200000 in their accounts.

He disclosed that this will ensure that their is enough liquidity tom power the Economy but not enough to buy votes.

On whether the Central Bank had the right data before going ahead with the Currency Redesign and Swap to mop up excess liquidity and ensure the return of stashed funds into the system, Mr Chukwu noted that the CBN said the volume of money in circulation before the start of the Policy was 3.2 Trillion with only about 500 Billion in the productive Economy with 2.7 Trillion stashed in some peoples homes.

He added that the disclosure by the Central Bank Governor, Godwin Emefiele, that the bank has recovered over 1.9 Trillion from the 3.2 Trillion shows that the bank had the requisite data before going ahead.

He posited that the information he has from the Central Bank of Nigeria is that the total Volume of money printed is about 500 Million Units of the new naira notes, he said this is just about 350 Billion Naira notes.

He disclosed that if the volume serving the commercial needs before now was about 500 Billion there should be no scarcity unless the CBN has not printed up to that.

He described his estimates as rough but one that is rational.

He also pointed the fingers at another reason for the scarcity as a probable mopping up of cash already printed by politicians who are bent on buying votes.

He however added that the CBN may have information on some these issues making it difficult for it to budge since it has not disclosed how much it has injected into the Economy of the new notes.

According to Mr Chukwu this may be responsible for the decision of the bank not to budge since it may affect some of the objectives of the Policy.

On the general outlook of the Economy especially with the debt incurred by the Federal Government of Nigeria through the ways and means from the Central Bank of Nigeria, he disclosed that the cash in circulation cannot be a pressure point on inflation but Sectors like Transportation, Fuel Supply and Others.