Special to USAfrica magazine (Houston) and USAfricaonline.com, first African-owned, US-based newspaper published on the Internet.
Dr. Chidi Amuta, Executive Editor of USAfrica since 1993.
December 17, 2010, marked the beginning of the Arab Spring, a modern-day revolution sparked by an assault on human dignity. Mohammed Bouazizi, a Tunisian street corner vegetable vendor had his produce and weighing scale confiscated by a female police officer ostensibly because he did not have a permit. The police officer not only slapped him but also spat in his face. Bouazizi subsequently went to complain to the governor and requested to at least have his scale back. Neither the governor nor any of his officials gave the aggrieved man audience. He returned to the street, doused himself in gasoline and set himself ablaze with an unanswered question of desperation as his last cry: ‘How do you expect me to make a living?”
The rest of what followed that self-immolation is history. Wild street protests and rioting followed. In less than a month, Tunisia’s long-standing dictator, Zine El Abidine Ben Ali was ousted. Protests spread to other Arab capitals. Long entrenched dictatorships in Egypt, Libya, Yemen, Syria and Bahrain were rattled and mostly sacked. The Arab Spring was born and spread like a wildfire. It did not however bring about the spread or acceptance of liberal democracy in the entire Arab World, but it shook the foundations of the prevailing order.
It has however left in its aftermath a few better democracies (Tunisia), some failed states (Libya and Yemen) and reinforced autocracies (Egypt, Iran, Bahrain and Saudi Arabia). But in all of the region, protests based on the dignity of individual citizens are not likely to be ignored any more.
I recount this prefatory scenario in order to foreground the developments in Nigeria in the last fortnight or more. On the eve of a decisive general election, the Central Bank of Nigeria with the express authority of lame duck President, Major General Muhammadu Buhari, sprang the surprise of a currency change on Nigerians. Ostensibly, a colour tweaked version of the Naira’s three highest denominations was to replace the existing ones in a swift economic guerilla operation. After all, as a military despot back in 1984, Mr. Buhari had changed the nation’s currency in a bid to impoverish Second Republic politicians who were suspected to have stashed away huge troves of cash. That earlier maneuver was a resounding thoughtless disaster.
Now again, another currency change shock has been deployed. As it turns out, the new policy is backed by neither informed policy design thinking nor even basic mathematical common sense. More embarrassing is the ignorance about the danger that a defective economic policy poses to national security and political wellbeing. Apparently, not enough of the new notes were minted to replace the old ones. So, the new notes became instantly scarce and have become the object of illicit underhand trade and black marketeering. Meanwhile, most honest people had turned in their old notes in obedience of deadlines that have now been shifted twice. Suddenly, the nation of over 200 million has been hit by a scarcity of both new and old currencies. What was initially touted as a move towards an automatic ‘cashless’ regime has become an unintended descent into a primitive moneyless economy. For a people that were waiting for democracy to alleviate their other hardships, an instant democratization of penury is the new reality.
Belated official explanations of the intention of the policy have since tumbled out of the incoherent voice of a government famous for speaking in several tongues about the same subject. Some court economists said the currency change was aimed at fighting runaway inflation. They quickly cited instance of other countries that have carried out similar changes. India is their favourite reference. Another school of Central Bank rationalizers has insisted that the policy is aimed at deepening the nation’s cashless economy so that most Nigerians can be forced to transact via online digital channels and abandon their habitual reliance on cash.
The more political wing of official town criers has belatedly confessed that the policy was actually aimed at preventing wealthy political barons from buying up most votes in the forthcoming elections. The primitive calculation is that government would deny such politicians of access to excess old Naira notes they had stashed away in private vaults and thus prevent them from converting the February and March elections into yet another bazaar of transactional democracy.
The various excuses advanced as the basis of this currency change have all turned out somewhat foolish. The excuse of fighting inflation has neutralized itself. Scarcity has made access to the Naira subject to upwards of 10%-20% premium. Instead of inflation meaning too much money chasing too few goods, Nigeria’s Central Bank has redefined it to mean no money at all chasing available goods or expensive money chasing available expensive goods! When you add the new cost of the local currency to the sky-high exchange rate and of course the elevated prices of goods, the anti-inflation arguments bursts like a two-penny balloon.
The phantom cashless argument has almost unraveled. Whatever cashless mechanisms were in place before this recent currency change have gone up literally in smoke. In any event, the cashless policy has been with us since the early 2000 if not earlier. It has achieved some commendable success without a currency change or deliberately inflicting hardship on an already distressed public.
At present, cash scarcity has stretched existing online platforms for financial transactions to their limits. The channels have been overburdened and now hardly work. ATM machines of the various banks deployed all over the country have neither new nor old notes to dispense. Most are empty to begin with. Most online Bank transfers hardly work as the channels and platforms are either not functioning or are over congested. In the rural and semi-rural areas, illiterates and poor people cannot access cash.
Most of those who have bank accounts have now come to see banks as that place where you deposit your hard-earned money and can no longer get it out. The very credibility of the formal financial sector has been eroded. Even the last line POS operators that helped cushion rural and poor people from the tyranny of the cashless regime have been knocked out of the system by the sheer logjam in the banking system and the real scarcity of cash in the system. Out of fear of spreading vandalism and attacks, most banks have shut their branches to safeguard their assets and the lives of their staff. Cashless has now come to mean ‘moneyless!
On the matter of the vote trade, many questions have emerged. Why would a responsible government unleash a far-reaching economic policy based on a one-factor political intent? As a factor of the entire population, how many bad politicians can buy enough votes to vitiate the outcome of a free and fair technology-based election?
More worrisomely, the political meaning of the policy in terms of vote buying has been tilted by political parties and interests. In the popular lore, the Naira redesign gimmick is understood as a ploy deliberately designed to stall the vote-buying schemes of the APC presidential candidate, Mr. Bola Tinubu. For some reason, Mr. Tinubu has become synonymous in the popular imagination with excessive wealth and a readiness to deploy an armada of cash to achieve his political ends. The readiest symbolism of his attachment to ‘cash and carry’ politics is the bullion van. More uncharitable commentators have come to characterize Mr. Tinubu as the bullion van politician. The veracity of this attachment remains contentious, but it seems to have stuck to the man and his complicated reputational liabilities.
Yet the conundrum of the moment remains that of Mr. Muhammadu Buhari. The readiest question is this: if indeed this policy was targeted at Mr. Tinubu, why would the president authorize the Central Bank to initiate a policy that would limit the electoral chances of the candidate of his own ruling party? But there are even more fundamental questions since Mr. Buhari is himself a product of the transactional politics he now seems to want to combat.
The more far-reaching concerns of the raging Naira crisis touch on the credibility and very integrity of the current Nigerian state. Ordinarily, the Central Bank has no business with politics even if its economic policies could have political consequences. But to design and roll out an economic policy and openly own up to its political intent does not become a credible Central Bank. And this is what Mr. Godwin Emefiele, Governor of the Central Bank, has repeatedly done throughout this crisis. He has even expressed an unusual readiness to provide cash to INEC to support the elections if necessary!
Curiously, President Buhari seems to have repeatedly turned a blind eye to the serial transgressions of Mr. Emefiele. In the run-up to the party presidential primaries, Mr. Emefiele was a card-carrying member of the ruling APC. He even acquired the N100 million nomination form for the presidential slot of the party. He mobilized huge political followership, bought and branded countless campaign vehicles and floated a huge underground campaign. In his recent altercations with security agencies and political interests, Mr. Emefiele has shown that he is more of an engaged political agent than a professional economist or banker for that matter. And yet he continues to insist that he derives all the authority for his curious actions from the president.
Meanwhile, in the entire national space, all hell has now been let loose. The nation has been hit by an unprecedented scarcity of both new and old notes. Most honest people had surrendered their old notes in obedience of deadlines that have kept shifting in a habitual government culture of flip-flops. Across the country, ordinary people have been hit by an embarrassing scarcity of cash. Online channels are mostly off. Banks have no new notes to dispense to irate customers who have occasionally resorted to acts of vandalism to vent their frustration.
Meanwhile, the worst hit is the poor and rural masses. Small businesses that thrive on hand–to–mouth cash flows have literally been wiped out. Most people cannot find cash to pay their basic bills. The rural majority and the unbanked amounting to over 50% of the population have been knocked off the economic wagon. In the villages, ancient modes of transaction such as trade by barter have resurfaced to meet basic needs but to no avail.
In desperate bids to protest the injustice and lack of compassion in the currency exchange exercise, innocent people have had their basic dignity assaulted, their esteem denigrated, and their psychological balance dislodged. In one instance, a gentleman went stark naked in a Lagos banking hall in the hope that his dangling nudity would force the bank officials to avail him of some of his hard-earned cash to meet his urgent needs. No luck! Another woman, driven to the limits by the same experience, opted to go half naked exposing her top end while screaming in the banking hall because she cannot find cash to feed her children.
Open public protestations against the inhumanity of this policy have spread. Sporadic instances of protest and vandalism of banking halls and ATMs have been reported all over the country. In places like Abeokuta, wild protest has been visited by the police with live bullets leading to some deaths. Most of these protests are driven by the implicit assault on human dignity by an officialdom that has since lost all compassion. In the interim, most banks have taken the commonsense precaution of shutting their branches in major cities till further notice thereby deepening a hardship and frustration that no one saw coming.
The political reverberation of this thoughtless policy is loud and clear. The most immediate and consequential implication is the threat it now poses to the elections of February 25th and March 11th. As an added self-imposed strategic obstacle to the elections, the Naira scarcity is a clear and present danger. It has become a major national security concern. Election logistics need to be funded seamlessly. INEC needs a functioning economic landscape to fund its massive nationwide logistics throughout the country. Contractors, transporters and service providers must be funded in a seamless manner.
People need to have access to their own cash resources to get to polling booths. Political parties need money to pay their agents, pay for the services that fuel their activities before, during and after the elections. All these processes from the private and individual to the corporate and institutional all need a free-flowing financial system. People and organizations need access to resources to function as free agents of a free society. You cannot have free and fair elections in a constricted economic space.
In the interim, there is scant evidence that the end of the nightmare is anywhere in sight. President Buhari has held endless meetings with the Central Bank, security agencies, governors and party people with miserable outcome. He has now scheduled a meeting of the National Council of State to seek additional adult intervention in a self-inflicted crisis. But in the interim, conflicting judicial injunctions and court orders are climbing over each other as to when the deadline should be for the exchange of old naira notes. The Central Bank has gone to court to push its own autonomy from the federal government. Three state governors have sued the federal government seeking an indefinite extension of the deadline. Even the Supreme Court has entered an interim injunction seeking an extension of the old Naira exchange deadline from the 10th to 15th of February. As things stand, we have judicial anarchy on a matter that touches the very livelihood of the people. The interests encouraging this judicial mayhem and its implicit political mischief had better find an alternative country if their enterprise prevail.
I began this piece by drawing attention to how the state’s assault on and insensitivity to the dignity of the individual citizen can spark far-reaching unintended political and social consequences. The spreading discontent about this Buhari/Emefiele Naira change is pushing too many Nigerians across the brink. By accident or deliberate mischief, it is all happening at a bad moment. This widening mass anger and discontent must not be allowed to graduate into protests that could imperil the forthcoming elections.
Popular anger and discontent must not be allowed to derail the greater good of democratic transition. A faulty democracy is better than a slide into anarchy and an undemocratic pretension to order. It is bad enough to live in a state devoid of all the protections and guarantees that a responsible sovereign owes its citizens as we currently do.
On a good day, present-day Nigeria resembles a state of anarchy. To formally enable or invite a descent into something worse would transform a bad dream into an endless nightmare. Yet, there may be a democratic dividend to the present discontent. At least people now know what party and what kind of leadership not to vote for in the imminent election.
Mr. President, Where’s our money and the state of our union?
