Central Bank of Nigeria

For a new policy such as this, the government needs to take out time to prepare the minds of citizens and enlighten them about the sacrifices they are expected to make and the long term benefits (if any) of such policies to the economy. On the contrary, as in this case, citizens were left to figure out for themselves the details and what to do. That is very wrong. It makes the government look unserious, insensitive and unresponsive. It put citizens in an unnecessary and avoidable panic mood, and in turn it erodes the public sympathy for the government in power.

Hauwa is a middle-aged Nigerian woman from Gombe State. She is a mother of three, pregnant for the fourth and currently studying for a postgraduate course in a prestigious university in the United Kingdom. She maintains a bank account in a so-called new generation bank back in Nigeria that her husband regularly transfers monies into to carter for her school fees, pay her rent and attend to her housekeeping needs. She made an elaborate plan for Christmas, and waited for the monthly allowance to hit her account. As soon as she got the alert from her bank, she started a mental preparation of what to buy, and went on to browse the offers in her favourite shops. Just as she was browsing, she read the news that the Nigerian government had banned the use of ATM cards for withdrawals outside the country. She became both exasperated and dumbfounded immediately, because it was already the 23rd of December and her family did not make any alternative plan for the yuletide.

Hauwa did not face her ordeal alone. Many students living abroad with such arrangements ran into hitches and starved until help came from somewhere else. Those who could not get help became stranded. In many parts of Europe, this is winter and very few people are able to move around, not to talk of work, under the prevalent extreme weather conditions. The situation means that those who are unable to sort themselves out, will explore other desperate means of survival which could lead them to criminality. That is the level of impact the sudden foreign exchange restriction policy has had on Nigerian citizens scattered across Diasporas.

Now, I have read several versions of explanation, both from the Central Bank of Nigeria and even from President Buhari himself. I am sorry, but none of the explanations appear satisfactory to me. I am not an economist. In fact, I do not need to be. However, I am a citizen, and that is what matters.

When government decides to roll out a policy that will have such a wide-ranging impact, they should be able to educate citizens beforehand and continuously. They must put together a robust communications strategy that will assist them in bringing everyone on board. That is one area this government has continuously got it wrong.

When government decides to roll out a policy that will have such a wide-ranging impact, they should be able to educate citizens beforehand and continuously. They must put together a robust communications strategy that will assist them in bringing everyone on board. That is one area this government has continuously got it wrong. A policy will go as far as you are willing to communicate it, regardless of how well intentioned it may be. This new policy on foreign exchange regime may not necessarily be a bad and anti-people policy – at least in the long term, but those who want to do the right thing must be told what to do. For instance, my banker informed me that those who are students abroad need to bring a proof so that they can be allowed to bid for foreign exchange to pay for their fees and living expenses. Genuine importers are also expected to provide their paperwork to the banks to get access to foreign exchange. How many people know that? At least Hauwa does not.

For a new policy such as this, the government needs to take out time to prepare the minds of citizens and enlighten them about the sacrifices they are expected to make and the long term benefits (if any) of such policies to the economy. On the contrary, as in this case, citizens were left to figure out for themselves the details and what to do. That is very wrong. It makes the government look unserious, insensitive and unresponsive. It put citizens in an unnecessary and avoidable panic mood, and in turn it erodes the public sympathy for the government in power. It also creates an opportunity for unnecessary politicisation of what otherwise would have been a desirable policy direction.

A few months ago, a so-called cashless policy was introduced. It places restrictions on the amount an individual or a corporate body can withdraw in cash per day. It stipulates that larger amounts must be transferred electronically, ostensibly to ensure that trails are left. Nice policy on paper.

According to the Migration Remittance Fact Book 2106, the Nigerians in the diaspora remitted back 21 billion US dollars in 2015 alone. Why is government putting such huge resources at risk? If they cannot be allowed an easy way to own a bank account at home, how can that capital, that our country needs badly, be repatriated home?

However, the big men have found various ways to ferry their cash around regardless of the policy. Have you wondered how the former National Security Adviser, Sambo Dasuki collected the monies he was said to have allegedly distributed? It was reported that he collected them – the monies – in raw cash stashed in cartons. How does this news make CBN look? Couldn’t the Central Bank have transferred the monies to him? Is the cashless policy a selective one for some people and not for others?

During his maiden media chat, President Buhari sounded somehow angry with those who are abusing the ATM cards to siphon foreign exchange outside the country. I agree that there are deviants who want to exploit loopholes for selfish criminal intentions, however there are a few others who want to do the right thing. While criminals need to be punished, those who want to do the right thing must be guided and protected. They must not be made victims of crimes they probably know nothing about? Nigerians in the Diaspora seem to suffer most for some of these policies. In the United Kingdom, customers pay as much as 30 UK pounds, an equivalent of 12,000 naira to get a Bank Verification Number (BVN) – something that they do for free back home. According to the Migration Remittance Fact Book 2106, the Nigerians in the diaspora remitted back 21 billion US dollars in 2015 alone. Why is government putting such huge resources at risk? If they cannot be allowed an easy way to own a bank account at home, how can that capital, that our country needs badly, be repatriated home?

Government must therefore gauge the impact of their policies on the Diaspora community if they want to tap into those funds. Policies must be accessed holistically, both in the long term and short term.

There are many people who have called for the sack of the Central Bank Governor because his policies do not seem to connect with the poor. They argue that he is serving the interest of the elitist few, and he seems very insensitive to the plight of a majority of Nigerians. That is alright, but how does the exit of one person halt a policy direction that government has already embarked upon?

There are other efforts government can make to curb the unnecessary haemorrhage of foreign exchange. For instance, the recent lifting of import restriction on rice will have the potential impact of the outflow of forex. Nigeria has no business still importing rice when we want to grow our domestic production, boost agriculture and create employment for our youths. So many items like furniture, and some, say toothpick, can be produced in Nigeria instead of being imported. Government should, if possible, ban the importation of such items completely and offer incentives to those who are ready to produce them locally. Part of the capital that the economy needs to bounce back will need to come from the Diaspora community. Government must therefore gauge the impact of their policies on the Diaspora community if they want to tap into those funds. Policies must be accessed holistically, both in the long term and short term.

Uche Igwe is a Doctoral Researcher in the Department of Politics, School of Law, Politics and Sociology, University of Sussex, Brighton, UK.