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New naira policy disrupts Nigerian economy

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By Mercy Kelani

Poor circulation of new notes has thrown Nigerians into unnecessary hardships.

Governors of the 36 Nigerian states have raised an alarm concerning a likely recession that could happen considering the economical damage done through the scarcity of Naira notes. Amidst cautioning, they appealed to President Muhammadu Buhari and the Central Bank of Nigeria (CBN) to not turn deaf ears to the sufferings of Nigerians as a result of the new Naira policy. On February 10, 2023, the Council of State asked the CBN to either print more new naira notes or recirculate the old ones to reduce the sufferings in the country.

Prior to this appeal, the governors of Kogi, Kaduna, Kano and Zamfara States sued the federal government to Supreme Court to request invalidation of the new naira policy deadline which they acclaimed to be the cause of Nigerians’ hardships. Ruling in their favor, suspension of the deadline of February 10 was approved. Chairman of the Nigeria Governors Forum (NGF) and Governor of Sokoto State, Aminu Tambuwal, expressed the forum’s sympathy for Nigerians and pledged the commitment of the forum to ease the situation through legal means.

NGF accuses the CBN of pursuing a currency confiscation programme.

The governors asserted that at this point, it is imperative to strike the difference between the CBN Naira redesign policy supported by Section 20 (3) of the CBN Act, 2007 and the ambitious cashless policy which are currently both exclusive. The governors have therefore come to the conclusion that the CBN is currently pursuing a currency confiscation programme rather than the currency exchange policy captured under Sec 20 (3) of the CBN Act, 2007. This was decided because the liquidity given to the general public is massively insufficient as a result of the restrictions placed on withdrawal notwithstanding deposited amounts.

He added that this act by the CBN awakens questions about respect for the civil liberties and rights of Nigerians in relation to their freedom to spend legally earned income as they wish. The Forum is of the belief that deployment of a cashless policy and improvement of digital transactions requires creation of incentives for attraction of customers and not a cruel approach as the citizens have experienced in the last few months. The CBN’s argument of astronomical increases in the currency in circulation is not backed by its data.

Private sectors are yet to fully key into digital banking.

Similarly, the economy of the Organized Private Sector (OPS) and economic experts raised concerns for the need to find a solution to the inadequate supply of the redesigned naira notes that has damaged the demand and supply chains in the country. National President of Association of Small Business Owners of Nigeria (ASBON), Dr. Femi Egbesola, advised the need for quick methods to address the cash hiccups challenging the economy. He asserted that those who are mostly affected by the cash swap and redesigned policy are micro, small and medium enterprises, unbanked communities, and informal sector operators that are yet to key into digital banking.

Additionally, Director of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, stated that the N100 trillion component of the national GDP is at risk of the crisis developed by currency swap. He believes that the crumbling of business transactions at the distributive trade during the crisis would lower trade and agricultural sectors and cause a negative effect on the manufacturing value chain and the services industry. He further said that any policy measure that would negatively impact sectors that ensure resilience of the Nigerian economy should be avoided.

APC hoards new notes to buy votes during election – PDP.

On another note, the national publicity secretary of the Peoples Democratic Party (PDP), Debo Ologunagba, accused APC governors of hoarding the new naira notes in facilities owned by their party supporters in Lagos, Kogi, Kano, Imo, Kaduna and other states in the country to buy votes in the forthcoming presidential election. He further asserted that it was inhumane for APC leaders to watch citizens sleep at ATM stands, fight at bank halls and ATM centers for cash as they are stranded to cater for basic daily needs.

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