Naira redesign: Emefiele’s illusion of looted funds in warehouses – Sydney Elude

A fruitless exercise that made the poor pooer

Most corrupt politicians operate with the support of complicit financial institutions to legitimize their loots. Sometimes, they work with criminal groups to manoeuvre the system and cause unpredictable changes in money demand and create instability. Their actions strongly affect income distribution and cause social degeneration since they don’t pay tax in the black economy they run. Eventually, this tax burden shifts to registered businesses.

That is why Central Banks regulate the financial system and ensure that financial institutions operate efficiently. In October, 2022, the former governor of the Central Bank of Nigeria, Mr. Godwin Emefiele birthed the policy to redesign the 200, 500 and 1,000 notes.

The idea behind the policy was to curb inflation, hoarding, and counterfeiting. It was supposed to be a success with the banks playing a major role. Sadly, the first clear sign of the policy’s failure started with the banks. They brought out the old notes and used the new ones to trade with politicians and POS operators.

In some bank branches there were long queues and disorderliness. Bankers were unruffled as desperate customers stripped naked in protest. An institution that was supposed to show example failed woefully. Only top politicians had access to cash. It was a confirmation that our banks have always helped corrupt politicians to move their stolen funds out of the country.

For decades, the UK had been a choice destination for loots from Nigeria. The actions of Nigerian politicians have forced the UK authorities to disrespect Nigerians despite their contributions to the UK economy. Recall that in May, 2016, then British Prime Minister David Cameron told Queen Elizabeth II that he was inviting the leaders of some ‘fantastically corrupt countries’, including Nigeria and Afghanistan, for an anti-corruption summit.

Some Nigerians found the remark offensive; and claimed that Cameron simply wanted to denigrade and demarket their country. However, some Nigerians supported Cameron, blaming Nigerian politicians for lacking the vision to build their country. How do you want Nigerians to be respected in the UK when most of them flood London and other UK cities to work and earn a more decent living, rather than for holidays.

For almost half a century, Nigeria’s thieving political elite have been contributing to the UK property boom, especially in London and surrounding cities. They help sustain the UK economy with the money needed for our Nigeria’s development. They help UK citizens meet their properties supply. Both retirees and those still working, who are tired of their country’s zombie-like 9 to 5 work culture, and the high cost of living, sell off their properties. They then move to the suburbs or countryside to buy cheaper properties or start life afresh in countries with cheaper cost of living and saner work climate.

The United Nations estimates that $400 billion was stolen by our leaders between 1960 and 1999. From 1999 to date, they have stolen more than $300 billion. The British government appreciates the contributions of our corrupt politicians to the British economy, and mount legal obstacles to return Nigerian loots in the country. Some of the loots of the late General Sani Abacha are still in the UK. Transparency International claimed that Abacha may have stolen up to $5bn within the five years he spent in office. The Nigerian government is still recovering the funds in financial safe havens almost two decades after he died.

Emefiele’s naira assault 

While Nigerians had misgivings about the naira redesign policy, Emefiele quoted figures to convince them that it would succeed. According to Emefiele, an estimated N2.73 trillion of the N3.23 trillion currency in circulation, which represents about 85 percent of the total was outside the banking system. He also expressed worry over the country’s security situation, expecially how terrorists and kidnappers keep “large volume of money outside the banking system used as source of funds for ransom.”

Emefiele and some financial experts had concluded that the policy would force corrupt politicians to bring out their idling loots wherever they hid them. They expected the Economic and Financial Crimes Commission (EFCC) to swoop on politicians rushing their loots to the banks.

But the thieves who looted our commonwealth proved to be smarter than the CBN governor had imagined. They simply blended with the crowd of normal business people and eased past the measures put in place to nab them. They adopted ways to spend the old notes or converted them to the new ones without being apprehended.

Ever before Emefiele embarked on his naira redesign mission, some Nigerians had concluded that it was a futile effort that would suffocate life out of ordinary Nigerians. Some financial experts argued that the policy was unnecessary, expensive, badly timed and won’t make the naira stronger, or help curb inflation.

Shell Companies, Not Warrhouses

In Nigeria, an average politician is far wealthier than a successful entrepreneur or businessperson. A politician’s income  is assured once elected or appointed into office. When some of them, like governor’s leave office, they draw pension and enjoy other benefits till death. Their opulent lifestyles portray them as being outside the economic system that the majority of the people live in.

 Also consider the law to pay them pension in a country where frustrated pensioners die or slump in queues while going through endless verification exercises. The over prioritization of the welfare of a few individuasls at the expense of the people who voted them into power greatly overstate their worth.

Those who feel that corrupt politicians in this age will store away their loots in warehouses, water tanks, cemented soakaway pits and other places are merely underestimating the resourcefulness of politicians when it comes to safeguarding their assets. If Gen. Sani Abacha, the country’s late dictator, who died 24 years ago, did not hide the millions of dollars he stole in the above manner, why then would today’s politicians?

Transparency International once claimed that Abacha may have stolen up to $5bn within the five years he spent in office. The Nigerian government is still recovering the funds Abacha stashed away in financial safe havens almost two decades after he died. Shell companies are still in business with politicians with illicit funds to hide. Can anything stop our politicians and their cronies to extensively use shell companies operating anywhere in the world to keep criminally-gotten wealth? It is their government; it does not exist for the people but for them alone.

The corruption of our democracy by a bunch of politicians and the threat they pose to our economy is an indictment on the agencies that spearhead anti money laundering enforcements. The CBN is move to redesign the naira is reactionary.

Shell companies reign supreme 

To disappointed Nigerians, the naira redesign policy did not lead to the arrest and prosecution of corrupt politicians, who are richer than highly successful entrepreneurs or businesspeople. The over prioritization of their welfare at the expense of the people who voted them into power greatly overstate their importance. They wanted to hear that the EFCC has recovered stolen monies stored away in warehouses, water tanks, cemented soak away pits and other places.

But they underestimated the resourcefulness of our politicians when it comes to safeguarding their loots. Also, they refused to appreciate the reality that our politicians operate in a system that rewards corruption, rather than penalize offenders.

The government of the day decides who is investigated, while some judges are quick to grant injunctions that stop the investigations or prosecutions of politicians with cases of graft. “They enjoy an institutional cover that allows them to embrace impunity and abandon accountability,” says one police prosecutor.

Shell companies are still in business with politicians with illicit funds to hide. Can anything stop our politicians and their cronies to extensively use shell companies operating anywhere in the world to keep criminally-gotten wealth? It is their government; it does not exist for the people but for them alone.

The corruption of our democracy by a bunch of politicians and the threat they pose to our economy is an indictment on the agencies that spearhead anti money laundering enforcements. The CBN’s naira redesign policy was reactionary.

Emiefle claimed the policy would boost the economy, but it ended up pulling millions of Nigerians into poverty. Some families whose breadwinners are within the minimum wage bracket got around half of their money after buying N10, 000 with N16, 000. In some places POS operators issued N10, 000 for N20,000 to desperate Nigerians. It was a needless exercise whose real objectives remain a mystery.

The policy also reduced the number of millionaires in the country. It is surprising that bank managers and staff workers are not facing trial for hoarding the new notes, and creating artificial scarcity. Also, no single politician or treasury looters was arrested for storing away the naira. In the naira redesign policy, Nigeria recorded a massive loss.