The cash crunch in the country worsened yesterday barely three days to the February 10 extended deadline for cash swap, as mammoth crowds continued to swamp banking halls and automated teller machines (ATMs) seeking to withdraw the new Naira notes.
This is as banks failed to comply with the Central Bank of Nigeria’s (CBN’s) directive allowing customers to withdraw N20,000 over the counter (OTC). LEADERSHIP’s checks revealee that banks were still restricting cash payment to customers in the banking halls and only paying out through ATMs as of yesterday.
Further findings reveal that many banks have been profiteering from the crisis by programming their ATMs to allow only N1,000 per withdrawal for other banks’ ATM cards so they can apply the N35 charges after the third withdrawal.
Our correspondents who visited banks in Lagos, the hub of banking services, and Ogun state yesterday disclosed that banks pegged daily disbursement to a customer per day to between N5,000 and N10,000 depending on the bank, the location and available cash.
This is despite the directive of the CBN to banks to resume over the counter cash payment with the redesigned naira notes, banks have warned staff to avoid wearing customised bank shirts, among others.
LEADERSHIP’s findings revealed that banks within the two states were, earlier yesterday morning, paying each customer N10,000 maximum withdrawal amount both over-the-counter and through the ATMs, but as noon approached, when the banks began to run out of cash, it was limited to N5,000 per customer across both channels.
By 3pm yesterday, findings showed that most of the banks had run out of cash as customers loitered endlessly at ATMs across Lagos and Ogun metropolis.
Our correspondents, who went round banks in Lagos State and its neighbouring Ogun State, learnt that there were huge crowds who had assembled at most bank branches even before the banking hour, waiting to withdraw. However, some of the banks whose branches were in a volatile environment had heavy security presence to prevent hoodlums and aggrieved customers from wreaking havoc on the banks’ facilities as well as ensure orderliness while queuing to withdraw.
Similarly, banks within Sango-Ota, Agbado and Ifo, among other areas of Ogun State, equally witnessed mammoth crowds who came to withdraw the new notes.
A visit to Zenith Bank Plc, at Ojota Ogudu road, Lagos revealed that the ATM was not loaded with cash as at 3:30pmnotes yesterday yesterday. Meanwhile, the bank paid N5,000 maximum over the counter at the early hours on Monday, but stopped paying at 11:00am, when they ran out of cash.
The same scenario played out at Union Bank within the same area as the bank only paid N5,000 over the counter, to ensure that all their customers go home with funds. The bank stopped paying at about 12pm when they ran out of cash.
Some of the customers who spoke with LEADERSHIP expressed their frustration, while calling on the government to intervene. A trader at Ojota, Mr John Jide, told LEADERSHIP he had not been able to trade for the past week.
“I can’t transfer. I am at Union Bank today because the transfer I did last week did not deliver, and as such nobody released goods for me to trade with. Meanwhile, the bank has debited me. If the bank had allowed transfers to work, it would have gone a long way in alleviating our pains. I plead with CBN and the government to intervene,” Jide stated. At Makoko First Bank branch, the bank was not paying either in the banking hall or the ATMs except for transfers.
Also, the GTBank Obalende branch was not paying in the banking hall, however, GTB cardholders could withdraw N10,000 through the ATMs while non-GTB customers are limited to N1,000 per withdrawal, but could use the ATM 10 times to get N10,000 a day.
At First Bank in Ademola Tokunbo, Victoria Island(VI), Lagos, the attendant on the counter said one cannot withdraw from the counter but only at the ATMs. However, at the bank’s ATM, First bank cardholders can withdraw N10,000 while non-FirstBank ATM cardholders can collect N2,000 at a time but can do it five times daily.
In the Access Banking hall, the cashier said they do not have money to pay out. As of 3:50pm yesterday, the ATMs were no longer dispensing cash, although the security officer at the bank disclosed that the ATMs dispensed money in the morning.
In the GTB VI, Lagos banking hall, one of the cashiers said: “We are not paying over the counter and this is because we are following instructions not to pay over the counter.” However, the ATM within the bank premises was not dispensing but the one within the 1004 Estate was dispensing N10,000 to GTB cardholders, and N1,000 to other banks’ ATM card users.
Meanwhile, following the violence that sprouted in some bank branches last week due to the scarcity of Naira notes, some banks have issued security warnings to their staff with some not opening the banking halls to customers.
This is as security experts say, if not urgently addressed, it could lead to a national uprising. The CBN and other banks in the country had, at the weekend, called for calm, understanding and patience. LEADERSHIP’s checks revealed that more ATMs are paying cash as against the number of ATMs that were paying cash last week.
Queues which did not subside at the weekend grew longer on Monday with some banks not allowing customers into their banking halls. Asides these, some banks had issued memos to their staff, warning them to be security conscious.and avoid wearing bank logos.
This may not be unconnected to reports that a banker was assaulted on his way to work on Monday morning. Last week, videos of bank staff being assaulted within the banking halls were all over social media. There were also some banks that had their properties, including ATMs, destroyed.
Speaking with LEADERSHIP yesterday, a security expert and former military personnel, who is the managing director/chief executive of Strict Guards Security, Dr Chinye Bone stressed the need for the government to, as a matter of urgency, address the situation on ground.
According to him, the attacks on banks “is beginning to look like a national uprising and Nigerian security agencies and the government should be concerned with what is going to end up becoming. It would have been better if they were open protests than these pockets of violence from branch to branch.
“What we should be concerned with is what can be done to reduce these problems and what should be done is simple. The CBN and the federal government should broadcast to Nigerians how much they are releasing to the commercial banks and force the commercial banks to broadcast the distribution of those funds made available to them and also advise every branch to announce how much every customer is entitled to and that would reduce the violence.
“CBN is giving Nigerians the impression that money has been released to commercial banks and that the commercial banks are hoarding the money. These people out there only know the commercial banks that they deposited money with and they want their money.” The CBN had, last week, directed banks to disburse the new naira notes over the counter. LEADERSHIP observed that POS operators in Ilorin have gone on holiday due to cash crunch.
The operators now take down the requests of their customers and phone numbers, with a promise to get in touch with them whenever they have cash.The POS operators were also charging N500 as commission on N5,000 as against the former N50 commission.
Majority of the commercial banks in Port Harcourt, the Rivers State capital are not complying fully with the directives of the CBN, Godwin Emefiele, to dispense the new naira notes from over the counter. Also, the majority of the ATMs in most of the banks are not dispensing cash while few that are functional have long queues.
LEADERSHIP observed that despite Emefiele’ directive that banks should be paying N20,000 of the new naira notes to their customers, most financial institutions in the Rivers State capital pay less than N10,000 to their customers.
Speaking to our correspondent, a female customer of the commercial banks, who identified herself as Madam Jane, said immediately she got into the banking hall, it was announced to them that the maximum for withdrawal was N5,000.
Meanwhile, Zamfara, Kogi and Kaduna States have dragged the CBN before the Supreme Court over the naira redesign policy. According to them in the suit, they are worried about the effect the policy is having on the residents of their states. They filed an ex-parte motion alongside the suit to stop the full implementation of the policy.
In a motion ex-parte filed on their behalf by their lawyer, AbdulHakeem Uthman Mustapha (SAN), the three northern states are urging the apex court to grant them an interim injunction stopping them, either by itself or acting through the CBN, the commercial banks or its agents from carrying out its plan of ending the timeframe within which the now older versions of the 200, 500 and 1000 denominations of the Naira may no longer be legal tender on February 10, 2023.
The plaintiffs in the suit are the three attorneys-general and commissioners of justice of the three states, while the attorney-general of the federation and minister of justice, Abubakar Malami (SAN), is the sole Respondent.
The plaintiffs said since the announcement of the new naira notes policy, there has been an acute shortage in the supply of the new naira notes in Kaduna, Kogi and Zamfara states and that citizens who have dutifully deposited their old naira notes have increasingly found it difficult and sometimes next to impossible to access new naira notes to go about their daily activities.
They also cited the inadequacy of the notice coupled with the haphazard manner in which the exercise is being carried out and the attendant hardship same is wreaking on Nigerians, which has been well acknowledged even by the federal government of Nigeria itself.
The plaintiffs further maintained that the ten-day extension by the federal government is still insufficient to address the challenges bedeviling the policy.
The CBN governor at a press conference held in Lagos insisted that the apex bank will not extend the deadline for swapping old naira notes with the newly redesigned ones.
In the suit filed at the apex court, the Plaintiffs have also filed a motion on notice to abridge the time within which the Respondent may file and serve his Counter-Affidavit to this Suit and an order for an accelerated hearing of this matter.
The states are seeking a declaration that the Demonetization Policy of the Federation being currently carried out by the Central Bank of Nigeria under the directive of the President of the Federal Republic of Nigeria is not in compliance with the extant provisions of the Constitution of the Federal Republic of Nigeria 1999 (as amended), Central Bank of Nigeria Act, 2007 and actual laws on the subject.
They are also asking the court to make a declaration that the three-month notice given by the Federal Government of Nigeria through the Central Bank of Nigeria under the directive of the President of the Federal Republic of Nigeria, the expiration of which will render the old Banknotes inadmissible as legal tender, is in gross violation of the provisions of Section 20(3) of the Central Bank of Nigeria Act 2007 which specifies that Reasonable Notice must be given before such a policy.
The plaintiffs are also urging the court for a declaration that given the express provisions of Section 20(3) of the Central Bank of Nigeria Act 2007, the Federal Government of Nigeria, through the Central Bank of Nigeria, has no powers to issue a timeline for the acceptance and redeeming of banknotes issued by the Bank, except as limited by Section 22(1) of the CBN Act 2007. The Central Bank shall at all times redeem its bank notes.
The plaintiffs further want the court to direct the immediate suspension of the demonetisation of the Federal Government of Nigeria through the Central Bank of Nigeria under the directive of the President of the Federal Republic of Nigeria until it complies with the relevant provisions of the law.
In an affidavit filed in support of the suit and sworn to by the attorney general and commissioner for justice, Kaduna State, Aisha Dikko, she averred that although the naira redesign policy was introduced to encourage the cashless policy of the federal government, it is not all transactions that can be conveniently carried out through electronic means.
She maintained that several transactions still require cash in exchange for goods and services hence the need for the Federal Government to have sufficient money available in circulation for the smooth running of the economy.
Dikko also pointed out that the federal government had embarked on the policy within a narrow and unworkable time frame, and this has adversely affected Nigerian citizens within Kaduna, Kogi and Zamfara States as well as their governments, especially as the newly redesigned naira notes are not available for use by the people as well as the state governments.
“That the majority of the indigenes of the plaintiffs’ states who reside in the rural areas have been unable to exchange or deposit their old naira notes as there are no banks in the rural areas where the majority of the population of the states reside. Most people in rural areas of the plaintiffs’ states do not have bank accounts and have so far been unable to deposit their life savings which are still in the old naira notes.
“There is restiveness amongst the people in the various states because of the hardship being suffered by the people, and the situation will sooner than later degenerate into the breakdown of law and order. The plaintiff state governments cannot stand by as they are duty-bound to protect citizens in their states and prevent the breakdown of law and order.
“I know that if the Federal Government of Nigeria had given sufficient and reasonable time for the naira redesign policy, all the current hardship and loss being experienced by the Plaintiffs’ State Governments as well as people in the various states would have been avoided.”
14 Parties Threaten To Boycott 2023 Election If Naira Redesign Policy Is Suspended
Meanwhile, no fewer than 10 of the 18 registered political parties participating in the 2023 general election have threatened to withdraw their participation from the election if the federal government and the Central Bank cancel or suspend the cash withdrawal limit and Naira redesign policies.
This position was made known yesterday at a joint world press conference by the Forum of Chairmen of Nigerian Political Parties and Forum of Candidates for the 2023 General Election. The candidates’ forum comprised Presidential, National Assembly, Governorship and House of Assembly candidates.
In the text read by the spokesperson of the Forum Chief, Barr. Kenneth Udeze, the national chairman of Action Alliance, and flanked by other national chairmen, presidential candidates, governorship, Senatorial and House of Representatives as well as House of Assembly candidates, declared: “We hereby announce our resolution that at least 14 of the 18 political parties in Nigeria will not be interested in the 2023 general election and indeed we shall withdraw all our participation from the electoral process if these currency policies are suspended or cancelled, or if the deadline is further shifted”.
The Forum stated that the policies will enhance the credibility of the 2023 election “In fact, if these policies are implemented fully and without shifting the deadline of 10th February, 2023 date, President Muhammadu Buhari would have taken a very huge step closer to fulfilling his promise to the world that the 2023 general election would be credible, free and fair.”
Continuing, Chief Udeze raised an alarm: “We have intercepted very credible intelligence of a well-financed plot to instigate violent disturbances, incite and provoke civil unrest aimed at undermining the president and causing a shift in the election date or causing his administration to come to an abrupt end.
“We were approached to lend our support, generous promises were made but we believe that Nigeria comes first before any other mundane consideration.These evil plans are targeted at coinciding the disturbances with the seven-day grace Mr. President asked Nigerians to grant him to solve the problem of the Naira crunch.”
The political parties and the candidates thereafter passed a resounding vote of confidence on the two CBN policies and commended President Buhari for his rare courage in taking these tough decisions for the good of the people.
Court Stops Buhari, CBN, Others From Suspending Currency Swap Policy
A High Court of the Federal Capital Territory (FCT), yesterday, restrained President Buhari, the CBN, the governor of CBN and 27 commercial banks from suspending, stopping, extending or interfering with the currency swap terminal date of February 10 or issuing any directive contrary to the said deadline.
In a motion by five political parties, Action Alliance (AA), Action Peoples Party (APP), Allied Peoples Movement (APM) and National Rescue Movement (NRM), the Court presided over by Justice Enenche also granted an order directing the CEOs of the 27 commercial banks and their alter egos to show cause why they should not be arrested and prosecuted for the economic and financial sabotage of the country by their illegal hoarding, withholding, not paying or disbursing the new N200, N500 and N1000 banknotes despite supply of such notes by the CBN.
LEADERSHIP reports that this order of the Court has rendered futile all behind-the-scene efforts, especially by governors of some states, to force the hand of the President to reverse the Naira swap policy or at least extend its deadline. Governors alleged to be behind the moves to stop this policy include the Governors of Kaduna, Kogi, Zamfara, Ondo, Rivers, Imo, Benue and Kano states.
Following the order, a cross-section of lawyers, Civil Society Organisations and ethnic youth groups, have hailed the latest court order, saying it was best for the country and would afford the stakeholders opportunity to now concentrate on how to ameliorate th’ e hardship occasioned by the policy.
Groups such as Arewa Consultative Youth Movement, Ohanaeze Youth Movement, and Oduduwa Youth Assembly have hailed the FCT High Court order.
Furthermore, a civil society organisation, the African Centre for Justice and Human Rights (ACJHR), said the order of the court was the first step in sanitising the country’s financial market and help in conducting very credible polls as politicians will find it extremely difficult, if not impossible, to have access to cash to compromise the 2023 elections.
In the 27 grounds by the applicants, they made out a case showing that politicians who ostensibly are in possession of illicit funds were the ones who want the policies suspended.