By Senator J Iroegbu
President Muhammadu Buhari and the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, have finally obeyed a court judgment to release the old naira notes that are set to expire by the end of this year. This shouldn’t have taken this long if the rule of law is supreme but we are talking about an administration that is notorious for cherry-picking on court orders to obey or not. While this is legally the right thing to do, it is important to question whether it will be enough to address the current challenges facing the country’s economy. To this end, I will argue that we should shift our focus from the old notes to printing more of the new money. This should not also negate the move to sustain the drive for the cashless policy of the apex bank. Nevertheless, there should be a balance.
I am not an economist but this is my layman’s understanding of the situation…
It is clear that Nigeria is facing a cash crunch and liquidity nightmare, and simply releasing the old naira notes may not be enough to resolve these issues. Instead, the CBN should prioritize printing more of the new money to increase liquidity and boost economic growth. While the apex bank has already mopped up the old money that was edited and deposited, there may still be old notes that politicians and others have been hoarding. It is alleged that these stark old naira notes were reserved by the Governors to influence the outcome of the guber polls and other clandestine acts before and after their tenure on May 29. However, even if these notes are released, it is uncertain whether they will be enough to go around and whether those who are hoarding them will be willing to release them.
Another missing link is the failure of commercial banks to meet up with the high volume of cashless transactions via their apps and Point Of Sale (POS) machines. This is the biggest letdown in this whole brouhaha. Most customers have had their money debited and transfers hanging for days and weeks without a trace or the intended recipients being credited, and some declined transactions via POS have eaten deep into the accounts of Nigerians, leaving many stranded. This is quite ridiculous because, before this controversial naira note redesign, most Nigerians embraced the cashless policy as long as it doesn’t affect their ability to get cash on demand and at any point in time.
Furthermore, the old notes will eventually expire by the end of the year, which means that any efforts to release them now will only provide temporary relief. Printing more of the new money, on the other hand, will have a long-lasting impact on the country’s economy. The CBN can also consider other measures, such as reducing interest rates and increasing government spending in cash, to stimulate economic growth and increase liquidity (even though this may go against the intended aims of the policy).
In conclusion, while it is good that the President and CBN Governor have obeyed the court judgment to release the old naira notes, this may not be enough to address Nigeria’s cash crunch and liquidity nightmare. Instead, we should focus on printing more of the new money and implementing other measures to stimulate economic growth and increase liquidity. By taking a proactive approach, we can ensure that Nigeria’s economy continues to thrive and that its people have access to the resources they need to prosper.
Iroegbu, a medi personality, writes from Abuja.
