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The central bank's plan to replace naira currency notes weeks before national elections has drawn anger on all sides
Godwin Emefiele, the self-styled development central banker, has been courting national controversy this year for the second time in this presidential election season.
On the first occasion, he emerged as a contender for the presidential nomination of the ruling All Progressives Congress as pick-up trucks emblazoned with his image and bearing campaign paraphernalia criss-crossed the capital Abuja a year ago.
Few were aware that Emefiele was a card-carrying member of the ruling party; they were even more surprised when he appeared to think that he could stay in post as governor of the central bank, guardian of the nation's monetary policy, while he campaigned for the presidency of the federal republic.
The phenomenon was short-lived. President Muhammadu Buhari then ruled that all public servants seeking to stand for elected office would have to resign their posts.
That persuaded Emefiele to drop his ambition, stay in post and continue his controversial foreign exchange and agriculture funding policies (AC Vol 63 No 23, Spend, spend, spend).
His next move proved as controversial as his foray into electoral politics. He announced in October that the 200, 500 and 1,000 naira currency notes would be redesigned, to 'mop up excess liquidity' and rein in the money supply (AC Vol 63 No 25, It takes more than new banknotes…).
Central bank officials expected about N2 trillion ($4.3 billion) in notes to be exchanged with the new design notes which would come into circulation in mid-December. Initially, the old design notes would cease to be legal tender on 31 January.
But that timetable intersected with presidential elections on 25 February (AC Vol 64 No 1, Election noise louder but signals weaker). Candidates, political entrepreneurs and traders protested.
Most vociferous was Bola Ahmed Tinubu, whose aides have lambasted Emefiele's monetary policies and criticised him for overreach. Last week Tinubu suggested that the currency swap and subsequent shortage of new notes, along with a chronic fuel shortage, was orchestrated to derail his campaign. He stopped short of referring to Emefiele by name.
As the richest candidate, whose campaigning style has included the offer of generous voter inducements, the lack of local currency in the system was reckoned to hurt Tinubu more than the other candidates.
Tinubu's supporters in the National Assembly took up the cause and summoned Emefiele to explain his policies. He declined to appear but public frustration with the shortage of currency notes, especially among traders in rural areas, escalated. Atiku Abubakar, one of Tinubu's main rivals joined calls to give people more time.
On 29 January, Emefiele uncharacteristically climbed down and extended the deadline to surrender the old notes to 10 February.
The operation has become a massive, if temporary, job creation scheme: some 1.4 million agents have been hired to work with citizens in more remote areas to swap their old naira notes and open bank accounts.
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