Fides Media Living the Faith
On Friday March 3, 2023, the Supreme Court of Nigeria made a pronouncement which invalidated the Naira Redesign Policy by the Central Bank of Nigeria, CBN, saying its implementation and timing were defective, even as it further declared that the old 200, 500, 1000 Naira notes remained legal tender until December 31, 2023.
This was after a previously given deadline of January 31, 2023 by the apex bank which was later extended to February 10, 2023. After this, the president, Muhammadu Buhari, on February 16, addressed Nigerians who were already facing a whole lot of stress and hardship as a result of the Naira Redesign Policy which gave birth to cash crunch and in turn forced the citizens into embracing cashless policy earlier introduced by the apex bank. Buhari announced the extension of the circulation of the old 200 Naira note as legal tender till April 10.
It can be observed that Nigerians, even in the face of difficulties, were already adjusting to the new development. People went about their day to day activities with little or no cash, waiting patiently to see if the situation would normalize.
But the Supreme Court came up with their new ruling asking Nigerians to go back to the use of the old notes. While the CBN had asserted that they had not given any directive to the bank to disburse old notes, some commercial banks already dispensed old notes.
Point of Sale (POS) agents appear to be benefiting from this chaos. They now charge 200 Naira for every old 1000 Naira note and 300 Naira for the new 1000 Naira note.
However, it was previously stated that one of the reasons for the Naira redesign Policy was to fight inflation and counterfeiting where it was stipulated that one could withdraw not more than 10,000 Naira a day. But the current situation has made it impossible for Nigerians to withdraw even 2000 Naira a day.
Traders, consumers and the rest of the citizenry remain in state of confusion. While some outrightly reject the old notes, others say they will only accept it, if the CBN and the President sanction it, since the Central Bank has refused to implement the ruling of the Supreme Court and the President, Muhammadu Buhari, is also not in agreement with the ruling.
The cash crunch continues as people keep trooping in and out of banks, hunting for cash. The electronic banking which Nigerians resorted to, has proved to be more of a mayhem than a way out. There are lots of glitches which often take banks days and sometimes weeks to solve.
We think the Supreme Court Pronouncement will be a relief to Nigerians, if the CBN adopts it. The old notes should be allowed to circulate concurrently with the new notes while banks gradually withdraw the old notes when the new ones are fully circulated as has always been the case during previous Naira Redesign Exercises.
The Supreme Court, CBN and presidency, should sort out their differences and give Nigerians a clear picture of what is happening, as the situation has left the already stressed citizens in a state of confusion on whether to accept the old notes or not. They should also get the commercial banks to step up their digital infrastructure and control the charges on electronic transactions, so as to make the cashless policy easier and not hostile to Nigerians.