The cost of the naira, caused by the Central Bank of Nigeria’s (CBN) naira redesign policy, has increased Nigerians’ misery, with food prices rising sharply.
Furthermore, the private sector has lamented that the policy has paralyzed the country’s businesses.
According to a survey conducted by EntreprenuerNG, the prices of palm oil, groundnut oil, rice, garri, and beans, among other commodities, have risen dramatically in less than a month.
According to investigations, most bulk suppliers of these products, some of whom were located in remote areas of the country, refused payment by transfer.
The middle traders have the option of purchasing scarce naira from the black market before purchasing from primary sources.
Investigations also revealed that money transfers from bank applications became erratic, sometimes hanging for days and then be reversed.
As a result, primary suppliers are wary of transfers.
By the end of the day, wage earners will have lost 20% to 30% of the value of their money in order to buy food that has already been inflated by the same margin, adding to the misery of workers whose wages are constant and, in some cases, not paid on a regular basis.
Muda Yusuf, a former Director-General of the Lagos Chamber of Commerce and Industry (LCCI), lamented that over N2 trillion had been retrieved from the economy since the policy’s implementation on December 15, 2022.
He added that the retrieval has left businesses unable to access cash to run their operations smoothly.
Since the redesigned N200, N500, and N1,000 notes entered circulation on December 15, 2022, and the CBN retired the old notes as legal tender initially on January 31, 2023, but extended to February 10, Nigerians have been subjected to harrowing experiences.
President Muhammadu Buhari extended the circulation life of the N200 note until April 10, while maintaining the February 10 expiration date of the old N500 and N1,000 notes.
Till date, the CBN had mopped up about N2 trillion cash from the economy thereby paralyzing the retail sector, crippling the informal economy, stifling the agricultural value chain, immobilising the transportation sector, and disrupting the payment system in the economy, Yusuf said.
While admitting that the CBN had the authority to redesign the country’s currency, he argued that the apex bank did not have the authority to deprive citizens of their cash.
Yusuf stated that citizens’ right to choose their mode of value storage is a fundamental right and that the CBN has no right to impose that choice on citizens.
It is a flagrant violation of the rights of citizens for the CBN to withhold the cash of citizens under the guise of currency redesign.
The CBN cannot request the citizens to bring their cash for a swap, only to deprive them access to it. A swap presupposes that whatever old notes were received by the banks must be replaced with new ones instantly.
The entire exercise was a needless disruption of economic growth activities, especially among the most vulnerable segments of the economy, he said.
Giving further clarification, Yusuf said the CBN claim that the economy had too much cash outside the banking system had no basis in economic theory, neither can it be supported by empirical evidence.
As at December 2022, the total money supply was N52 trillion and the cash component of money supply was N2.6 trillion, which was just five per cent . Similarly, the country’s gross domestic product (GDP) was N202 trillion, which gives a cash-to- GDP ratio of 1.3 per cent.
These ratios are some of the lowest around the world, which shows that the Nigerian economy is not really a cash-dominant economy, he said.
Yusuf applauded the March 3 Supreme Court ruling on the validity of the old N200, N500 and N1000 as legal tender till December 31, 2023.
