Making cash freely available

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ON Friday, March 3, long after Nigerians had been thrown into economic strangulation, social dislocation, mental torture and emotional turmoil with the naira redesign policy of President Muhammadu Buhari badly executed by the Central Bank of Nigeria (CBN), Nigeria’s Supreme Court, in a unanimous decision, legally halted the policy. It invalidated President Buhari’s order outlawing the use of the old N1000 and N500 notes and restoring only the use of the old N200 notes along with the new notes until April 10 this year, declaring the president’s action as an affront on the 1999 Constitution (as amended). Delivering its verdict in the case brought by 16 states of the Federation against the Federal Government, the court, taking note of the terrible consequences of the policy on the vast majority of the long-suffering Nigerians, flayed the president’s violation of its February 22 ruling directing that the old notes be allowed to circulate with the newly redesigned notes until the final determination of the suit filed by some states on the matter. Consequently, it ordered that the old naira notes must circulate together with the new notes until December 31.

In the lead judgment read by Justice Emmanuel Agim, the apex court held that Buhari breached the constitution in the manner he issued directives for the redesigning of the naira. It decried the president’s February 16 national broadcast, saying that “the rule of law upon which our democratic governance is founded becomes illusory if the president of the country or any authority or person refuses to obey the orders of courts.” It added that the president’s disobedience of court orders in a constitutional democracy indicated that democratic governance had become replaced by dictatorship. According to the court, the president usurped the powers of the CBN when he issued the directive banning the old naira notes from February 10, breaching the fundamental rights of citizens with the unlawful use of executive powers that inflicted unprecedented economic hardship on them. It said that “no reasonable notice was given to the public in line with Section 20 of the CBN Act, 2007 before the president gave the directive of the redesign of new naira and the withdrawal of old notes.”

In the wake of the judgment, some Deposit Money Banks (DMBs) began paying out the old naira notes on Monday. However, it has been impossible spending the money as Nigerians await a pronouncement by either President Buhari or the CBN Governor. Strangely, even the banks paying out the old notes to customers have been rejecting them as deposits. Right now, the old notes cannot be spent anywhere. This is double tragedy for Nigerians who suffered untold economic loss as they tried to dispose of the old notes following the February 10 deadline, ripped off by crafty traders making stupendous profit. It is unsettling that nearly a week after the apex court’s judgment, neither the presidency nor the CBN has issued a statement of compliance with the order. It is a national embarrassment that right at this moment, the cash crunch that started in January still persists with dire consequences. It has caused significant impairment of the ability of citizens and small businesses to manage their daily affairs seamlessly. In plain language, Nigerians have no cash with which to transact daily business; even the hitherto pedestrian daily upkeep of individuals and families has become a mirage. Worse still, there is no glimmer of hope on the horizon as the situation worsens daily. Although the Supreme Court’s judgment has restored the legal status of old naira notes as an end to citizens’ anguish, that is yet to happen in real terms.

It is a fact that owing to the sudden deluge of requests that the extant Information and Communication Technology (ICT) infrastructure cannot cope with, the electronic transfer network is literally down. Besides, most of the competent technical staff in the Deposit Money Banks (DMBs) have reportedly migrated to other countries where their expertise is better appreciated, and so the pain that Nigerians are experiencing on a daily basis is simply unbearable. Going by the shoddy implementation of the redesign policy, the persistent cash scarcity it has occasioned and, more significantly, the lethargic and patently lacklustre approach to addressing the crisis, it would seem as if governments exist in Nigeria merely to inflict pains and hardship on citizens. For instance, what reasonable explanations can anyone possibly offer that for months now, it has been impossible for Nigerians to cash their deposits in the banks because of insufficient supply of new notes by the CBN? It is commonsensical to allow the circulation of both the new and old notes until the supply of the latter is sufficient to meet the needs of the banking public.

Asking citizens to continue enduring existential challenges in the hope of reaping uncertain benefits of cash crunch is insensitive and wicked. The torment of cash scarcity is huge and no responsible government should subject its citizen to such torture. Besides, it will be pleasantly surprising if the country does not suffer Gross Domestic Product (GDP) contraction at the end of quarter 1 of 2023 because of the impact of cash scarcity on economic activities and actors. Virtually all that has been achieved in the area of inclusive banking may have been eroded as many customers are unlikely to deposit their money in the banks once they are able to retrieve what is currently trapped in them. With the suboptimal implementation of the redesign policy, it is no wonder that the country is in the current dire straits on all fronts, unable to optimally resolve its multi-faceted challenges.

Nigeria has been the butt of jokes around the world since this spectacle of bank customers being unable to withdraw cash from their deposits started. On this score, President Buhari’s recent apology over the hardship foisted on Nigerians by the policy is of no consequence so long as citizens’ pains persist, especially since he was in a position to stop the adversity but did not. We urge Buhari to direct the CBN to immediately flood the DMBs with cash as directed by the apex court. Delay is dangerous!

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