Was the naira redesign politically motivated?

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Former acting CBN governor confirms naira redesign was politically motivated

For months, Nigeria’s apex bank, the CBN, and its past governor, Godwin Emefiele, told Nigerians that the hardship they endured during the hasty and ill-timed Naira redesign was worth it and that the redesign would “increase financial inclusion, control inflation and assist in the fight against corruption”. 

But it did the opposite. 

Nigerians were financially excluded as a cash scarcity developed and banks struggled to accommodate the surge in digital payments; inflation rose to 21.82% in January 2023 and 21.9% in February; and vote buying was rampant during the elections. 

Many Nigerians thought that the timing of the redesign—near the elections—showed that the redesign was politically motivated. Now, Folashodun Shonubi, the former acting CBN governor, has confirmed those thoughts. 

Emefiele is currently facing four charges brought against him by Nigeria’s financial crimes unit for causing injury to the public and acting illegally during the naira redesign. 

On Thursday, Shonubi testified in court that Emefiele admitted the naira redesign was politically motivated and that what the CBN produced after the redesign was different from what former President Buhari approved.

He also testified that the CBN, under Emefiele, went against its standard protocol for currency redesign by allowing the former governor to unilaterally create the document that Buhari approved for the redesign. 

Under CBN law, the Currency Management Department, not the governor, is responsible for initiating currency redesign, followed by the CBN’s board approval before presidential assent. 

Shonubi’s testimony, combined with Emefiele's failed presidential bid, complicates the former CBN governor’s defence, making a conviction seem increasingly likely.

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When we spoke to Wole Ayodele, the CEO of Fincra, a Nigerian payment infrastructure provider, in September, one thing stood out: his firm belief that the prosperity of Africa lies in the easy flow of money on the continent.

At the moment, transferring money within Africa is anything but easy. Regulatory bottlenecks and the absence of a unified payment system have made cross-border transactions costly. Startups like Ayodele's Fincra—which provides businesses with payment rails to facilitate cross-border transactions—are stepping up to solve this pressing issue.

Fincra serves a growing list of fintechs, including Raenest, LemFi, and NALA, which rely on its payment rails to facilitate cross-border payments. These companies use Fincra’s infrastructure to help individuals send money to and from Africa efficiently.

While Fincra currently operates across six countries (Ghana, Kenya, South Africa, Uganda, the United Kingdom, Europe, and North America), Ayodele believes there are more markets that are extremely sought after by Fincra’s customers. 

One of those markets is Africa’s largest economy, South Africa, where the startup has acquired a Third Party Payment Provider (TPPP) licence. The licence will allow Fincra to offer pay-in and pay-out services to registered and pre-approved South African businesses.

The TPPP licence comes after the startup acquired an International Money Transfer Operator (IMTO) licence from the Central Bank of Nigeria (CBN) in September. 

“Ultimately, we want to be in all 54 African countries,” Ayodele said during our chat. The company has Egypt and Ethiopia lined up as its next destinations.

Tanzanian President Samia Suluhu is on a warpath with independent institutions like the media and rights groups. Her administration has stepped up efforts to suppress dissenting voices, including opposition politicians. 

On Thursday, Tanzania’s communications regulator suspended Mwananchi Communications’ online publications for 30 days, citing the publication of “prohibited content.” This move comes despite President Samia Suluhu's initial stance as a progressive leader following the repressive rule of her predecessor, John Magufuli, who stifled dissent.

Suluhu also warned the opposition not to copy Kenya’s protests after angry Kenyans stormed the country’s parliaments in June following weeks of street protests. 

Mwananchi Communications operates several news outlets, including The Citizen, an English news outlet; Mwananchi, a Swahili site; and Mwanaspoti, a sports news publication. 

Mwananchi Communications is no stranger to sanctions, having previously been suspended for six months in 2020 after The Citizen posted a leaked video of former President John Magufuli at a crowded fish market during the COVID-19 pandemic.

The latest suspension is part of a broader government crackdown on dissent, with authorities recently arresting three opposition leaders and banning local news outlets from covering anti-government activities.

Chadema, a prominent opposition party, has warned that this crackdown on independent institutions could signal a return to the repressive rule seen under Magufuli.