Nigeria’s economy is still writhing from the pains inflicted on it by the decision of the Central Bank of Nigeria (CBN) to redesign the naira. It will take several months for the economy to recover fully from the excruciating pains of the naira redesign scheme.
The World Bank, International Monetary Fund (IMF) and even the United Nations have blamed the cash crunch engineered by the failed naira redesign project as one of the reasons Nigeria’s economic growth rate for 2023 would plunge precipitously.
The cash crunch and the unprecedented chaos that the utter lack of planing and managerial acumen for executing the ill-fated currency change foisted on banks still bedevils the economy. Thousands of micro, small and medium enterprises (MSMEs) collapsed due to dearth of patronage as the failed currency change metamorphosed into a calamitous liquidity crisis. Nigerian Breweries lost N10.7 billion while poultry farmers lost N50 billion. Many died of ailments that could have been healed if they were able to access their deposits in banks.
Unpatriotic bank managers and point of sales (PoS) terminal operators suddenly became emergency millionaires through the exploitation of frustrated bank depositors.
At last it was the Supreme Court that saved the economy from total collapse. The Supreme Court in a landmark ruling nullified Godwin Emefiele’s deadline for the old notes.
The court argued that President Muhammadu Buhari breached Nigeria’s constitution by ordering a currency change without approval of the council of state and even his executive council. For that reason the court extended the legal tender duration of the outlawed old currencies to December 31, 2023.
That historic decision of Nigeria’s apex court saved the economy. It can now be concluded without an iota of doubt that Emefiele was not prepared for the utopian task he cut out for himself.
Four months after CBN outlawed the old N200, N500 and N1, 000 notes, the new ones have become even scarcer than when he ushered them in on December 15, 2022.
While banks have managed to reload their automated teller machines (ATMs), no one can find any of the new notes in the resurrected ATMs. They only dispense old notes.
Speculation making the rounds is that ordinary Nigerians are the ones now hoarding the new notes for fear of getting their money trapped in December 2023. The claim is that they are not circulating the new notes.
I dismiss such speculations as arrant nonsense. Nigeria’s inconsequential majority have no access to the new notes. No one hoards what he does not have.
The new notes are just not there to be hoarded. There is a yawning supply deficit of the new notes. CBN is helpless over the calamity. The disastrous failure of the currency change is more of ineptitude than sabotage.
There are fears that CBN has not supplied the new notes since the Supreme Court extended the legal tender duration of the old notes.
Emefiele has gone to sleep leaving the banks to stew in their own juice as they pacify their hostile depositors with bundles of dilapidated old notes which are not supposed to leave the apex bank vault.
The media has been eventually vindicated. The story in the media was that the German firm that supplies the Nigerian Security Printing and Minting Company (NSPMC) with papers for printing currency notes had warned that it has a long list of confirmed bookings for currency printing papers and that Nigeria was at the bottom of the long list. No one knows how long it would take the German firm to attain to Nigeria’s request. The CBN had denied the story but we now know who is telling the truth.
We are just fortunate that the justices of the Supreme Court took a bold step to rescue the economy from the merciless grip of CBN’s catastrophic currency change.
If the Supreme Court had allowed Emefiele to coast along without a plan for ending the chaos in the banking system, by now PoS operators would have taken over the economy and be selling the naira to willing buyers at N9, 000 per N10, 000.
Nigeria would have set a new record in the global scene by inadvertently returning to trade by barter as it runs out of money as a modern medium of transaction.
The bold justices have saved Nigeria’s economy. Emefiele should reward them with truckloads of the new notes for saving his job.
If the justices of the Supreme Court did not inadvertently protect Emefiele’s job by extending the legal tender duration of the old notes, even Buhari as patient as he is with his subordinates, would have been sufficiently stampeded into dropping the CBN governor.
Despite the untold suffering and avoidable deaths engendered by the mismanaged and bungled currency change, one thing remains indisputable. Even Emefiele’s enemies grudgingly admit that the currency change was absolutely necessary.
No Central Bank can control liquidity and tame inflation in an economy where 85 per cent of the currency in circulation is in treasury looters’ homes.
No economy survives the level of treasury looting induced by a banking system that ignores currency deposit and withdrawal laws and allows corrupt government officials to withdraw billions of naira from government accounts.
The naira redesign scheme was meant to render the looted funds useless to the looters and at the same time give the CBN absolute control of liquidity with a view to enabling the apex bank to tame inflation and in the process stabilise the exchange rate of the naira.
Some of the noble goals of the currency redesign have been achieved even though at the cost of the crushing pains borne by Nigeria’s inconsequential majority.
Emefiele’s perceived crime today is that he mismanaged the scheme and turned it into a horrendous burden that brought the economy to its knees.
Someone should file fresh suits asking the Supreme Court to extend the legal tender duration of the old notes beyond December 2023. CBN may not be able to meet that deadline.
