Olayemi Cardoso is the governor of the Central Bank of Nigeria (CBN). I was made to understand that he came to the job with intimidating credentials. Some of his traducers will dispute this by saying that his hands-on banking experience is thin and that he was essentially a once-upon-a-time chairman of an international bank with only one branch. And that one branch shared a building with the bank’s headquarters somewhere in Victoria Island in Lagos. I think the name of that institution is City Bank. It has to be acknowledged though that it was, still is, a global brand. But Cardoso’s experience, whether thin or thick, did not fetch him the top CBN job. What did it for him was his connection to Nigeria’s president, Alhaji Bola Ahmed Tinubu. He had worked for Tinubu in the president’s previous incarnation as the governor of Lagos State between 1999-2007. Cardoso is not alone in this regard. Virtually everybody who is anybody and who is occupying any significant position in this regime has been a ‘boy’ or acolyte of the president.
Cardoso as the CBN governor has done a few other things since he was installed to succeed the former hack who occupied that office. Godwin Emefiele was a disaster who in addition to economic management ineptitude and administrative failings diminished the office of the CBN governor almost beyond redemption. Emefiele, it was, who as a sitting CBN governor made a grab for the presidency of Nigeria. He threw his hat into the ring in the contest for the presidential ticket of the All Progressives Congress (APC) political party. He was a card-carrying though closet member of the ruling party. The man who reappointed him to office for a second term, former president, Maj.-Gen Muhammadu Buhari, said much later that Emefiele did not break any law. Buhari, who turned out to be Nigeria’s affliction, may yet be right but in which sane clime would a serving central bank helmsman dive in such a reckless manner into the murky waters of partisan politics and walk away scot-free. Well, he has not walked away unscatted though he appears to be facing political persecution from Tinubu who appears to feel that the ex-CBN governor threw huddles on his way to Aso Rock Villa through the sudden currency recoloration in the heat of the 2023 campaigns.
Expectedly, Cardoso had his hands full in terms of house cleaning when he assumed office. In addition, he had a couple of petty bills to pay including the backlog of unremitted foreign currency revenues of international airlines. Apart from minor distractions such as the above and occasional claims of accretion to the country’s foreign reserves (up to $40bn now from about $36bn though no mention is ever made of any portion of the sum that may be encumbered), the new sheriff in the apex bank has preoccupied himself solely with raising interest rates. For Cardoso, mindless raising of interest rates with its deleterious effects on other areas of the economy is the only tool in his box to rein in galloping inflation which now stands at over 33% (food inflation is actually about 40%}, and arrest the rapid and precipitous decline in the value of the Naira. The current street value of the Naira is $1/N1,740. For the 2024 national budget the federal government projected that $1USD would exchange for N800. The projection was off target. Even the economically illiterate knew then that the benchmark was a non-starter. The $1/N1,400 provided for in the 2025 budget may still fall through the cracks. In spite of Cardoso’s best efforts in digging in neither inflation nor exchange rate stability has been achieved. And he has been on these for one and a half years. Just like the chief executive officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, and the completion of refineries’ turnaround maintenance, Cardoso has missed all the targets he had set for himself on inflation reduction and Naira stability.
For a distraction, the CBN governor has turned his attention to populism. Christmas and New Year celebrations are around the corner. Under Emefiele the experience of Nigerians during the festive season in 2023 was both horrible and horrific. To be sure the trauma started from October of that year. Nigerian banks virtually froze the bank accounts of ordinary folks and created a situation where it was easier for a camel to pass through the eye of a needle than for Citizen Ugochi to withdraw any cash from her bank account. In frustration some Nigerians visited their anger at automated teller machines (ATMs) and destroyed a couple of them. Others laid siege to bank premises and held workers hostage. Indeed some bank staff had to use a ladder to scale the fence to escape from the angry mob. We also witnessed situations where customers who managed to force their way into banking halls but could not be availed with desperately needed cash resorted to stripping themselves stark naked as a mark of protest. Of course, the videos of naked bodies with exposed genitalia went viral. The acute cash hoarding by the CBN in connivance with money deposit banks eased up a little soon after the February/March 2023 general elections. But the problem was not addressed in a systematic and deliberate manner. It has lingered on. Getting cash out from the bank accounts of ordinary folks has remained a nightmare for about two years, either from over the counter or from the ATM.
Last weekend at the Chartered Institute of Bankers Annual Dinner, Cardoso told Nigerians, probably over mouth full of delicacies, that we should report to the CBN any difficulties in withdrawing cash from bank branches or from ATMs. This must have come as a shock to many ordinary folks because this has been their experience since before Cardoso assumed office. That statement from the CBN is the clearest indication that the governor and his leadership team are alienated from the reality of the majority of Nigerians. And how can you serve people you do not know and whose daily grind you are unaware of? On paper, depositors are allowed to withdraw up to N150,000 from the ATM daily. But this has not been the experience of customers for about two years. Rather ATM patrons have had to grapple with ATM machines that never dispensed cash. Where they do the customer is usually arbitrarily limited to cash withdrawal of about N20,000. Often these are old, torn and smelly Naira notes. An acquaintance whose remit included loading ATM machines at weekends (that’s when they have the money anyway) once told me that she had to iron the currency notes on an ironing board before loading them onto the ATM to avoid glitches in dispensing. It’s the same frustration for over the counter cash withdrawals. Customers are restricted to withdrawals of between N20,000-N50,000. But since last month cash withdrawals have been capped at a maximum of N20,000 by many so-called commercial banks. It is the same for ATMs whenever they are dispensing.
But the experience at ATMs in recent times has been frustrating, annoying and degrading. The limit for daily withdrawal remains N20,000 but the mode of withdrawal has changed. In some ATMs, including the ones owned by the bank warehousing your deposits, the ATMs are now configured to dispense the N20,000 in multiples of N4000. In other words, you are compelled to work the machine five times to get N20,000 in N200 currency notes. And yet the CBN governor who urged us last weekend to report banks which are derelict in their duty of care pretends not to know what has been happening in the institutions he is supervising. He may really not be aware but that’s no credit to him and his team. It is dereliction of duty. Perhaps, the CBN is also not aware of the notorious fact that while the banks appear not to have cash for their customers, the point of sales (POS) operators have more than enough cash at any point in time for their own patrons, of course, at a handsome fee. Unless you are well heeled and connected, you can never get cash of N1,000,000 from any bank at this time. But you can readily get the same amount of money, and even more, from the street side POS as long as you are willing to pay a commission of between N30,000-N50,000. For the street vendor, selling Naira is a profitable business. There’s probably no other country where their currency is sold for a hefty profit by the street corner.
Apart from cash withdrawal headaches, customers can hardly get crisp banknotes from the banks, certainly not from transactions made over the counter inside the banking hall. Occasionally, a fortunate patron could get the new notes, including those minted in controversial circumstances last year by Buhari and Emefiele. But by special arrangement you can get these same rare banknotes from the POS if you are willing to pay a premium. However, there are two other sure places of getting the Buhari/Emefiele banknotes – through a superior bank officer, and at event centres for high-end parties.
For the bank officer you must be ready to play ball while for the hawkers at event centres, you will have to pay a ransom. You may have to pay as much as N30,000 for N100,000 in fresh banknotes. Naira hawkers at event centres are not known to be bank workers. So how do they get the crispy banknotes that they sell at a premium. The banks know. And the CBN knows. Both are complicit in the economic sabotage. The CBN knows or should know the serial numbers of the banknotes it supplies to each bank and so knows the source of any leakage. As for other infractions by the commercial banks, the relevant CBN staff should be made to get off their air-conditioned offices and hit the streets for random checks on the banks and their ATMs. If this is not happening it will only be because the CBN and the banks are in league to punish depositors.
Nigeria’s economy is largely informal and still driven by cash transactions. Through cash squeeze the CBN and the banks are doing incalculable damage to the economy and so should be branded as economic saboteurs. Cardoso’s angst at the bankers dinner last weekend is contrived and designed to distract. He should be made to purge himself. As for the banks, it is time for customers to file class action lawsuits to test the subject of Duty of Care of banks to their depositors and other clients.
