Prof Kingsley Moghalu, a former Deputy Governor of the CBN warned that the terrible suffering & economic loss Nigerians experienced with the Naira redesign and the later entry of the judiciary into central banking functions shows the failure of Nigeria’s institutions.

Moghalu disclosed this in a statement late Monday night after the Presidency stated it never ordered the CBN to disregard the Supreme Court.

Moghalu also warned that one day, Nigerians will count the losses, to the Nigerian economy, the legitimacy and effectiveness of a once-prestigious institution, and the legitimacy of the Nigerian state itself due to the policy.

State failure: He stated the policy introduced, terrible suffering & economic loss to Nigerians,  as a result of the faulty implantation of the Central Bank of Nigeria’s Naira redesign policy, he added;

  • “The entry of the judiciary into central banking functions, all show clearly how our institutions— and Nigeria — fail
  • “When institutions that are meant to be operationally independent become politicized. Currency functions are a core part of any central bank’s mandate. To that extent, I 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

Illegal loans to FG: He added the plans to “ reduce money supply” came after the CBN 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.
  • Then, next, it became about “free and fair elections “ to stop vote-buying. This last reason became the most important — and controversial — reason as the tempo of the 2023 presidential contest rose to a boiling point. Expectedly, politicians who felt the policy targeted them
  • “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.

CBN’s mandate: He also asked what exactly the mandate of the CBN is, wondering if had it now become to end vote buying in elections. He added :

  • “One day, we will count the losses, to the Nigerian economy, the legitimacy and effectiveness of a once-prestigious institution, and to the legitimacy of the Nigerian state itself, of the partisan politicization and de-professionalization of the leadership of the CBN.
  • “Our apex bank, along with the judiciary, is one of the key institutional prisms through which foreign countries and investors abroad and at home assess the functioning or otherwise of the Nigerian state.

He also warned that turning CBN’s mandate into a “political football” was and is a big mistake and a strong indicator of state failure.

What you should know

The CBN broke its silence on the controversy surrounding the naira redesign policy, they said old N200, N400 and N1000 remain legal tender till December 21, 2023.

This came a week after the Supreme Court ordered the FG to accept old notes as legal tender for the period.