The apex bank should make the local currency available to Nigerians
There’s no papering over the fact that most Nigerians are literally going through the valley of the shadow of death in the aftermath of the Central Bank of Nigeria’s (CBN) Naira Redesign policy. Since its introduction, many lives have been lost in avoidable circumstances, businesses have been ruined while many have been socially dislocated. Now that the Nigeria Labour Congress (NLC) has directed public sector workers in the country to embark on strike next week Wednesday, we hope that relevant authorities will do everything to avert the looming crisis.
When in the last quarter of 2022 the apex bank announced its plan to redesign the 200, 500 and 1000 Naira notes, and end the use of the old notes by 31stJanuary 2023, it explained that the policy would enable it take control of the Naira in circulation, manage inflation, while combatting counterfeiting and ransom payment. Whether the policy has achieved the set objectives is yet to be determined. But since the commencement of implementation, the policy has inflicted hardship on millions of Nigerians. Besides, it has also created some perverse incentives for racketeering in an environment where unscrupulous people game every process.
First, the acute scarcity of the new notes made the initial deadline unrealistic, and prompted the apex bank, with the approval of President Muhammadu Buhari, to extend the legal tender status of the old notes till February 10. Since then, even with twists and turns, litigations and expectations, Nigerians have had to bear the brunt of Naira scarcity. Perhaps, never in the history of the country have the people been made to face the current level of currency-induced hardship and socio-economic dislocation in peace time.
The local currency has become so scarce that Nigerians keep vigil at banks, and many more buy the elusive currency from emergency cash merchants at scandalous prices. As a result, sundry economic and social malaise are now associated with the new currency redesign policy. Buying and selling have become a nightmare without the local currency, and the electronic platforms now come with their own challenges. Even the CBN has admitted to the glitches arising from online banking and Point of Sales (PoS) transactions.
Since the introduction of the policy, the Nigerian economy has reportedly lost an estimated N20 trillion from the cash crunch arising from decelerating economic activities. It has crippled trading activities and the informal economy with lives made difficult for inhabitants of rural communities. According to the Centre for the Promotion of Private Enterprise (CPPE), this is a huge cost for an exercise that is still ongoing and is of doubtful benefit to the people. What is of serious concern is why the cash crunch does not seem to be yielding any respite almost two weeks after the Supreme Court judgement reinstated the initially phased out old currency till the end of 2023.
While the CBN has ordered commercial banks to begin issuing the old banknotes alongside the redesigned ones, reprieve appears to be far from the beleaguered populace and businesses. There are still long queues in the banks and the lull in markets persists. There are questions as to whether the old notes which the apex bank mopped up from the economy before the intervention of the apex court are still within the banking system or already crushed.
Meanwhile, it is regrettable that President Buhari, who repeatedly owned up to authorising the naira redesign, has offered little or no empathy while Nigerians groan under the hardship inflicted by a policy that has his full imprimatur. While we do not want to indulge in any blame-game, we urge the apex bank to quickly make the local currency available to Nigerians.