Naira Policy Twists and Turns
THE last three months in Nigeria have been stressful for Nigerians, no thanks for the change from the old naira notes. Even with the excruciating pains they were/are still being experienced, the country still had successful elections whereby winners are being accused of conniving with the officials of the electoral empire, Independent National Electoral Commission, INEC to steal votes. The election have also brought to the fore the primordial sentiments between two major ethnic groups in the country, Yorubas and Ibos.
THERE are rising anxiety and tension across the country as to the availability of naira notes. What many Nigerians considered a very simple endeavour has turned sour and generated serious controversies. Naira notes have joined the lists of scarce commodities in the country with many people customers spending hours in the bank before they could be given N3,000. Many Points of Sales, PoS, agents engage in sharp practices by charging customers up to 30 percent before giving them money, while traders have resorted to selling naira notes.
THE Supreme Court judgement on Federal Government ban on the use of the old naira notes from February 10, 2023 has not been really felt. The suit was filed by three states – Kaduna, Kogi and Zamfara States, all in the northern part of Nigeria and controlled by the ruling All Progressives Congress (APC).
IN a twist, the Federal Government asked the apex Court to dismiss states’ suit challenging the 10 February deadline set by the CBN to end the legal tender status of the old versions of some newly designed currency notes. It argued that the Supreme Court lacked jurisdiction to hear the suit .
WE therefore believe that the time is ripe for both the Federal Government and the CBN to find solutions to the economic quagmire. Some businesses are dying owing to the cash crunch in the country. A quick solution to this challenge would do much good to our already postrate economy.
THE countries with cashless economies did not get there by executive fiat but by providing the necessary infrastructures and enabling environment, with the system operating side by side with the old. When the economy has sufficient buffer to absorb any shocks it makes the cashless more attractive and safe.
NATURALLY people will gradually migrate to it over time with all the attendant benefits. Here in Nigeria, our mighty CBN wants to do it in few months. Over one trillion naira was deposited, only a little over N300 billion was issued by the CBN and insisting people should use electronic channels, with over 60 percent of the population without bank accounts . And under 55 percent communication network coverage (according to national communication commission). This we insist cannot be successful.
NIGERIANS are becoming restless as banks are being invaded, others are closing and the government is pretending that all is well. When a branch manager of a bank was ferried through a barb-wired fence in order to escape mob attack, showed that there was tension in town.
NIGERIANS are going through hardships in getting their hands on the naira notes thus making the banking industry as the undeserving beneficiary of this incompetent roll-out .
NOW that the Supreme Court has ordered that both the new and old notes be spent simultaneously, we enjoin the CBN to release the old notes in its vault in order to fill the shortfall of naira in circulation and reduce people’s suffering over accessing cash. Our economy is fragile and any move to worsen it should be avoided . This policy is causing untold hardships in the country and something urgent needs to be done.
PRESIDENT Muhammadu Buhari administration has a duty to not only apologise to Nigerians for the failure in implementing the redesign policy of the naira and swapping old currencies with the new N200, N500 and N1000 notes
THE government has a duty to apologise for the unprecedented, horrendous hardship it has needlessly brought on the citizenry. It must also accept full blame for standing governance on its head and spearheading deep conflict within the federation, as manifested in the dissonance in the president’s directive to Nigerians to spend only the new notes , except the old N200; vis-à-vis the directives of many states governors asking their citizens to spend and accept both old and new notes, in accordance with the rulling of the Supreme Court delivered on February 8 and reiterated on February 15, 2023. The ensuing confusion has left no one in any doubt of President Buhari’s lack of grip on governance.
NOW that elections are over, advising President Buhari not to release notes should no longer hold water. After all, nobody can buy votes that have already being decided. The current monetary policy failure is the latest indication of Buhari’s refusal to learn from past errors. While currency redesigning may be well-intentioned, especially against vote-buying ahead of the general elections, handlers miscalculated the overarching effect on the masses and ran afoul of the common good of the country.
GRANTED that the huge volume of banknotes outside the banking system was hurting the economy, coupled with the imperative of checking inflation, banditry, ransom-taking and the political class (to justify immediate mop up of N2.1 trillion, being 80 per cent of funds outside the banks), at what cost are all these to the average Nigerians who are heavily dependent on cash-transactions daily? The informal sector accounts for more than 84 per cent of employment and close to a third of domestic output. Without cash, the economy is grounded and typical of the hell the average Nigerians have witnessed in the last couple of months.
SOMETHING urgent needs to be done to put an end to this quagmire.