Nigeria’s President Muhammadu Buhari must immediately address the cash crunch already crippling the country’s economy. Buhari’s continued silence on a national issue as such is fuelling tensions and agitations from Nigerians.
The last time Buhari spoke was during a national broadcast on the 16th of February – He said the old N200 note will remain legal tender until April 10 when they will cease to be valid.
“To further ease the supply pressures, particularly to our citizens, I have approved the CBN that the old N200 bank notes be released back into circulation and that it should also be allowed to circulate as legal tender with the new N200, N500, and N1000 banknotes for 60 days from February 10, 2023, to April 10, 2023, when the old N200 note ceases to be legal tender,” he said.
On the contrary, Supreme Court said all the old notes will remain legal tender until December 31, 2023, including the N500, and N1,000 notes, nullifying the Naira redesign policy.
As a fact, the Central Bank Governor, Godwin Emefiele is yet to release an official statement ordering the deposit banks across the country to make cash available to Nigerians. The CBN cannot take any decisive action without the views or approval of the President.
As at the time of filing this report, Professor Charles Soludo, former Governor of the Central Bank and the incumbent Governor of Anambra State, wrote on his verified Facebook page that the “Commercial banks have been directed by the Central Bank of Nigeria (CBN) to dispense old currency notes and to also receive same as deposits from customers”.
Recall that due to the negative impact of the policy, the Supreme Court ruled that the Central Bank of Nigeria (CBN) must extend the use of old banknotes until 31 December. A seven-member court panel led by John Okoro unanimously ordered the CBN to continue accepting old notes from Nigerian citizens.
The cash shortage has not only hampered economic activity in the country but has also become a major risk to the economy.
Techeconomy gathered that many Nigerians who are facing the cash crunch are not able to pay for transport. ” Uchechi Mbah, a school principal at a secondary school in Lagos, said going to school every day to teach has become an arduous task due to the non-availability of cash.
” When it became so tough, the school needed to arrange a bus that takes all the teachers home. That was the only solution because many of us dont have cash for transport.
The last time Buhari spoke was during a national broadcast on the 16th of February – He said the old N200 note will, however, remain legal tender until April 10 when they will cease to be valid.
Generally, businesses have been affected especially SMEs. A forty-year-old woman who runs a restaurant business in Ojuelegba told TechEconomy on a phone call that sales have been down as many customers have resorted to digital channels.
She said the problem with the mobile transfer is poor network. “Many of the transfers have not reflected and these customers who have bought food from my restaurant.” She added, “it’s a tough one, many of us still prefer cash.”
According to the National Bureau of Statistics (NBS), full-year growth in 2022 will be 3.1%, in line with the World Bank’s forecast.
“Although the agriculture sector grew, its performance was significantly hampered by severe incidences of flooding experienced across the country,” the NBS said.
“The industry sector was … challenged, recording -0.94% growth and contributing less to the aggregate GDP relative to the third quarter of 2022 and the fourth quarter of 2021.”
Dr. Muda Yusuf, Chief Executive Officer of CPPE, stated that Nigerians continue to suffer as a result of the acute cash shortage caused by the rejection of old currency notes by market operators, the refusal of banks to accept old notes, the Presidency’s silence on the Supreme Court judgment, and the absence of an official pronouncement by the CBN on the issue.
He added that as payment system challenges persist, retail transactions across sectors have become nerve-racking and distressing. “Retail transactions across sectors have become nerve-wracking and distressing as payment system challenges persist.”
“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 percent of cash in the economy and the expected relief from the supreme court judgment has not materialized,” CPPE said.
Salvaging the Economy
Solving the economic problems of Nigeria will require some drastic measures. This includes tackling inflation by shifting from consumption to production, reducing the interest rate, providing infrastructure, and making the business environment conducive.
The current cash crunch is an addition to the already tightening economy. Stakeholders are calling on President Buhari to immediately intervene to put an end to the hardship caused by the currency redesign policy, adding that the cash shortage has not only crippled economic activities in the country but has now become a major risk to the livelihoods of Nigerians.