The suspicion that politicians will resort to moving election money into state coffers for easy accessibility when the currency redesign project goes into effect has reportedly got security agencies focusing on accounts of state governments.

Apart from the federal elections, presidential and parliamentary polls, state elections for governors will hold in 31 of the 36 states and all the 36 states will be electing their lawmakers. Governors across political stables are party leaders in their respective states and largely determine election funding.

Vote-buying has become a feature of Nigeria’s political culture despite international and local battle-cry against it.

During elections, since the return of democratic governance in 1999, money is regularly shared to the electorate, at times in the open, with politicians in recent time preferring to induce high net worth voters with dollars, as naira, the country’s currency, continues to nosedive.

Authorities also believe that money for vote buying is always kept outside of the banking system, making it difficult for monitoring agencies to trace and establish whether such fund is proceeds of crime or not. In announcing the new measure that has now thrown the political arena into a spin, governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, alluded to huge portion of the nation’s financial liquidity being kept outside of financial institutions.

His claim suggested the nation’s currency has been largely mopped up from circulation, though he wasn’t definite about who did and for what purposes.

It was learnt that apart from state governors, frontline presidential candidates may also resort to keeping their campaign cash out of security agencies’ sight by lodging it with friendly and supportive state governors for easy access when the current higher denominations of naira would no longer be legal tender.

The listed notes for redesign, currently in circulation, will cease being legal tender on January 31, 2023, mere 25 days to the presidential and parliamentary polls.

Of the three frontrunners in the presidential race, only Peter Obi of the Labour Party is having his home state ruled by another political party. Chukwuma Soludo, incidentally a former apex bank chief, who also tried to redenominate the naira during his headship of the apex bank, is of the All Progressives Grand Alliance (APGA) that appears to caucus more with the Peoples Democratic Party (PDP) on national projects.

Bola Tinubu is a former Lagos State governor and he has remained the godfather to all his successors, including the incumbent, Babajide Sanwo-Olu, who is of the All Progressives Congress (APC) like Tinubu.

Adamawa, the home state of Atiku Abubakar, the presidential candidate of the PDP, is ruled by Ahmadu Fintiri, also of the PDP.

It was learnt that money coming into states’ coffers as Internally Generated Revenue (IGR) will be receiving greater attention than other deposits in months before the general election, both in high and low revenue-generating states.

Monitoring the deposits is to ensure that election money isn’t brought in to be exchanged with the redesigned notes in their large quantities, using the instrumentality of states’ accounting system.

Deposits considered suspicious are likely to be flagged by the apex bank for questioning.

Withdrawals by designated government functionaries from the accounts of states will also be monitored, according to findings.

Although the apex bank is yet to announce a cap on withdrawals by individuals, corporate bodies and governments, analysts believe withdrawal limits would still come into the process, especially if the policy is actually targeted at vote-buying as widely assumed.

The country’s financial intelligence agency, Nigerian Financial Intelligence Unit (NFIU), already in possession of every bank account in Nigeria, is likely to be doing more of flagging of accounts in the days ahead once the deadline for old currency usage comes into effect.

The unit, which used to be under the Economic and Financial Crimes Commission (EFCC), is now domiciled within the apex bank, making it a major enforcement component of the exercise.

The unit says it is “the central national agency responsible for the receipt of disclosures from reporting organisations, the analysis of these disclosures and the production of intelligence for dissemination to competent authorities.”

The implication is that the autonomous agency is empowered to share intelligence on financial engagements of Nigerians, with other security units.

On its website, the unit says it is “the central coordinating body for the country’s AntiMoney Laundering, CounterTerrorist Financing and Counter-Proliferation Financing (AML/CFT/CPF) framework.”

The CBN governor, Emefiele, listed some of the crimes which the unit said it was created to prevent as the primary reason the redesigning of the notes is taking place.

Apart from politicians, banks’ chief executive officers are also said to be on the radar of the security agencies.

Already, the EFCC, while applauding the CBN move, spoke of ensuring compliance in order not to have the policy derailed.

The director of Corporate Communications, Mr Osita Nwanisiobi, could not be reached on his mobile telephone lines but a top executive in the system who spoke on condition of anonymity because he was not authorised to speak for the CBN said the NFIU is an independent body from both the CBN and the EFCC.

According to him, the functions of NFIU remain what they have been, which include: receipt of suspicious transaction reports from financial institutions and designate non-financial businesses and professionals as well as receipt of threshold-based transaction reports from reporting entities among others.

Speaking on the highest amount of transactions allowed per individual, the source disclosed that there is no limit to the amount that members of the public can take to the bank and that bank charges on such deposits have been suspended, adding that there is no stated amount of money (deposit) that banks are mandated to report to law enforcement agencies except when considered suspicious.

He said: “The CBN will no longer print large quantities of bank notes. No bank customer shall bear any charges for cash returned/paid into their accounts. CBN and EFCC will be tracking all deposits. Banks must only accept cash from customers with full KYC and bank accounts, as cash must only be paid into existing accounts not ledgers or suspense accounts.”

Meanwhile, reactions have been diverse over the redesigning policy. Renowned economist and the Chief Executive Officer (CEO), Financial Derivatives Company (FDC), Mr Bismark Rewane, noted in an electronic mail that since forex markets are usually a subject of panic and speculation, the first reaction to the new regulation is likely to be a flight to safety by investors. This entails people buying dollars hoping that the value will increase in future, so that they can resell.

“So, we expect some initial speculation against the Naira but this should be short-lived. The Naira traded at N770/$ on Wednesday but should settle at its true market value in the days ahead. In times of uncertainty, investors, speculators and manufacturers will prefer to be long in dollars and short in domestic currencies,” he said.

Similarly, analysts at Proshare believed that the move was motivated by the government’s efforts at disrupting the activities of bandits, kidnappers, drug peddlers and other unscrupulous individuals who operate on the fringe of society since they would usually demand cash as payment.

According to them, the decision of the CBN would help prevent vote-buying during the 2023 general elections since politicians who have stashed large volumes of cash would be forced to convert same to new notes.

“If banks play their role of reporting transactions of certain volume to the Economic and Financial Crimes Commission (EFCC), the withdrawal and transfer limits would act as an effective control valve on the amount of money available for vote buying,” the analysts stated.

According to Proshare’s emailed intelligence analysis, the ultra-rich, who hold large amounts of existing currency, may consider the dollar and other liquid securities as alternatives to lodging their monies in the bank, thus sending asset prices higher in the short term.

“The large amounts of money that would be released into the economy may spur a short-term inflationary rush. It has also been argued that many Nigerians who operate in the large informal sector may get stuck with the existing notes as the six-week window provided for the conversion of notes may prove inadequate given also the fact that many communities lack the presence of commercial banks,” the release stated in part.

Many Nigerians on social media also argued that the super-rich may resort to distribution of money to layer their sources, causing money laundering.

Some also believed that the new regulation may spell trouble for banks as there would be pressure on their cash collection and deposit channels, a reason for which the apex bank asked them to keep open, their currency processing centres from Monday to Saturday, to accommodate all cash be returned by their customers.

There are also fears that merchants and retailers may begin to reject old currencies earlier than necessary, since they have to take them to deposit at banks.

Some industry stakeholders are of the view that some kidnappers allegedly collected ransom in hard currencies and if they could have supplies of fuel, medicine, food items, airtime, and even medicals in the bush, the redesigning of naira may be of no effect on them and their trade. (Nigerian Tribune)

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