Cash Crunch: CPPE calls on Buhari to intervene

The Centre for the Promotion of Private Enterprise [CPPE] on Sunday called on President Muhammadu Buhari to immediately intervene to put an end to the hardship caused by the currency redesign policy of the Central Bank of Nigeria (CBN).

In a statement signed by Muda Yusuf, director of CPPE, the think tank said the cash scarcity has not only crippled economic activities in the country but has now become a major risk to the livelihoods of Nigerians.

He explained that millions of citizens have slipped into penury and destitution as a result of the disruptions caused by the currency redesign policy, especially the mopping up of over 70 per cent of cash in the economy.

“Nigerians have not been this traumatized in recent history. The economy is gradually grinding to a halt because of the collapse of payment systems across all platforms.

“Digital platforms are performing sub-optimally because of congestion; physical cash is unavailable because the CBN has sucked away over 70 per cent of cash in the economy and the expected relief from the supreme court judgement has not materialized,” the CPPE said.

Mr Yusuf added that citizens are consequently left in a quandary amid silence from constituted authorities.

“The banks claimed that the CBN has not officially communicated the supreme court judgement to them for any actions.

“The President has maintained a worrying muteness on the judgement; the market women and men are waiting to hear from President Buhari or the CBN governor on the legal tender status of old currency notes,” the statement said.

Curiously, the CPPE argued, there is an apparent reluctance or unwillingness by the federal government and the CBN to comply with the supreme court judgement.

The statement added that the development is very “disturbing and inexplicable”.

“Meanwhile, Nigerians continue to groan in the adversity inflicted by the acute cash shortage amid the rejection of old currency notes by market operators, refusal by banks to accept the old notes, silence by the presidency on the supreme court judgement; and absence of official pronouncement by the CBN on the issue.

“Retail transactions across sectors have become nerve-wracking and distressing as payment system challenges persist. Since the onset of the cash crisis, the Nigerian economy has lost an estimated N20 trillion.

“These losses arose from the deceleration of economic activities, the crippling of trading activities, the stifling of the informal economy, the contraction in the agricultural sector and the paralysis of the rural economy. There are also corresponding job losses in the hundreds of thousands,” the think tank said.

Mr Yusuf said Mr Buhari did not seem to appreciate the gravity and enormity of the suffering and pain that Nigerians have been experiencing since the currency redesign policy was introduced.

“We again plead with the President to immediately intervene to put an end to the devastating and traumatic outcomes of a repressive, poorly conceptualized and badly implemented currency redesign policy.

“We request the following immediate actions.

“The CBN should be directed to immediately inform the Nigerian public that the old currency notes [alongside the new notes] remain legal tender until the 31st December 2023, in line with the supreme court judgement.

“The CBN should be directed to officially communicate the outcome of the Supreme court judgement to the banks and affirm compliance with the judgement.

“The president should publicly empathize with Nigerians on the unwarranted and inexcusable pain and suffering that the currency redesign policy has wreaked on them,” he said.

Background

The Central Bank of Nigeria (CBN) had last December introduced new N200, N500, and N1000 notes, which led to the withdrawal of the old notes from circulation. This policy resulted in widespread chaos across the country, with protests erupting in various regions as Nigerians faced difficulties doing business and making cash payments in daily transactions.

Earlier in March, the Supreme Court ruled that the CBN must extend the use of old banknotes until 31 December due to the negative impact of the policy.

A seven-member panel of the court, led by John Okoro, unanimously ordered the CBN to continue receiving the old notes from Nigerian citizens.

The court also found that President Muhammadu Buhari’s directive to the CBN on the withdrawal of old notes and redesign of new banknotes without proper consultation was invalid.

Last Monday, after the Supreme Court judgement on the naira policy, some commercial banks in parts of the country resumed the issuance of the old N500 and N1000 notes to their customers.

But since the Supreme Court gave its verdict on the case, neither the Central Bank of Nigeria (CBN) nor the Nigerian government has reacted to the new development.

PREMIUM TIMES also reported how many traders across the country refused to accept the old naira notes from their customers.