The Supreme Court’s restraining order on the timeline for the naira exchange has been welcomed by the Center for the Promotion of Private Enterprise (CPPE), which claims that the move will reduce social tension and the risk of social unrest in the nation while also bringing economic activity back to normal.
The Supreme Court of Nigeria has ordered the federal government to postpone the deadline for the old N200, N500, and N1,000 notes to cease being legal money until February 10.
The founder of CPPE, Dr. Muda Yusuf, stated that the CBN’s currency swap deadline has caused terrible chaos and hardship, with small enterprises and common people suffering the worst effects.
He reiterated that the CBN naira swap model and timeline were flawed given the country’s huge population of over 200 million, large informal sector and rural economy and over 30 million unbanked citizens.
“It is inappropriate to arbitrarily cut down on currency in circulation without due regard to data, empirical studies and global best practices.
“In Nigeria, cash to Gross Domestic Product (GDP) ratio is less than 1.5 per cent; while cash/money supply ratio is just about 5 per cent.
“This underlines the fact that cash is not the problem of the Nigerian economy or monetary policy effectiveness.
“We affirm our position that N2.6 trillion currency in circulation is not too much for the Nigerian economy with a GDP of about N250 trillion.
“Any attempt to arbitrarily cut it will create a crisis,” he said.
Yusuf said it is unacceptable that citizens are denied access to their cash deposited for purposes of naira swap.
This, he stressed, could undermine the confidence of the citizens in the banking system and pose a major risk to the financial inclusion objective of the CBN.
He further stated that onboarding citizens into the cashless platform should not be decreed or forced on them but should be voluntary and incentive driven.
“Meanwhile, in compliance with the supreme court order, we urge the CBN to immediately allow the old and new currency notes to co-circulate until such a time when the old notes are gradually and completely withdrawn.
“This is global best practice and this should happen within a space of three to six months.
“Meanwhile, all the cash that has been mopped up should be released to their owners, unless there are reasons to suspect such lodgments and this should be escalated to the antigraft agencies.
“Citizens that have lodged their cash for purposes of the cash swap should be allowed unfettered access to their money,” he said.