Naira scarcity: N20trn lost to reduction in economic activities, says CPPE

The Centre for the Promotion of Private Enterprise (CPPE) says the Nigerian economy has lost an estimated N20 trillion to the current naira scarcity.

Mada Yusuf, chief executive officer (CEO) of CPPE, spoke on the impact of the naira redesign policy in a statement on Sunday.

Two weeks ago, the supreme court had invalidated the naira redesign policy introduced by the Central Bank of Nigeria (CBN), over a defective timing and implementation.

A seven-member panel of the apex court held that the old N200, N500 and N1000 notes remain legal tender until December 31, 2023.

TheCable had reported that some banks have started dispensing old notes to customers (over the counter and automated teller machines) following the court order.

However, some Nigerians are rejecting the old notes for transactions as they await an official announcement from the federal government and CBN to determine the next course of action.

There are reports that banks are also refusing to accept deposits of old notes despite the court order.

Speaking on the development, Yusuf said the protracted acute cash scarcity has not only crippled economic activities in the country, but has also become a major risk to the livelihoods of most Nigerians. 

“Millions of citizens have slipped into penury and destitution as a result of the disruptions and tribulations perpetrated by the currency redesign policy, especially the mopping up of over 70 percent of cash in the economy. Nigerians have not been this traumatised in recent history,” the statement reads.

“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 judgement has not materialised.  The citizens are consequently left in a quandary.

“The banks claimed that the CBN has not officially communicated the supreme court judgement to them for any actions; the President has maintained a worrying muteness on the judgement; the market women and men are waiting to hear from the President Buhari or the CBN governor on the legal tender status of old currency notes.”

‘UNWILLINGNESS BY CBN, FG TO COMPLY WITH SUPREME COURT JUDGEMENT DISTURBING’

Yusuf said there is an apparent reluctance by the federal government and the CBN to comply with the supreme court judgement, saying it is “very disturbing and inexplicable”.

“Meanwhile, Nigerians continue to groan in the adversity inflicted by the acute cash shortage amid rejection of old currency notes by market operators, refusal by banks to accept the old notes, silence by the presidency on the supreme court judgement; and absence of official pronouncement by the CBN on the issue,” he said.

“Retail transactions across sectors have become nerve-wracking and distressing as payment system challenges persist. Since the onset of the cash crisis, the Nigerian economy has lost an estimated N20 trillion.”

The CPPE CEO said these losses arose from the deceleration of economic activities, the crippling of trading activities, the stifling of the informal economy, contraction in the agricultural sector and the paralysis of the rural economy.

“There are also corresponding job losses in hundreds of thousands,” he added.

“Evidently, president Buhari did not seem to appreciate the gravity and enormity of the suffering and pain that Nigerians have been experiencing since the onset of the currency redesign policy.

“We again plead with the president to immediately intervene to put an end to the devastating and traumatic outcomes of a repressive, poorly conceptualised and badly implemented currency redesign policy.”

Yusuf also asked that the CBN should be directed to immediately inform the public that the old currency notes (alongside the new notes) remain legal tender until December 31, 2023, in line with the supreme court judgement.