The scarcity of the new naira notes in Nigeria has become a matter of concern for both the general public and the country’s economic stakeholders. The situation has been exacerbated by the legal battle between the Central Bank of Nigeria (CBN) and the Supreme Court.
The CBN had planned to phase out the old naira notes and replace them with new ones. However, the Supreme Court issued an interlocutory injunction ordering the CBN to stop the planned discontinuation of the use of old naira notes pending the hearing of a suit on February 15, 2023.
The CBN has vowed that there is no going back on the plan to phase out the old naira notes on February 10 as scheduled, despite the Supreme Court’s injunction. This has caused confusion among the general public, who are left stranded and unsure about what to do. Financial analysts are also concerned about the potential implications of the legal battle on the Nigerian economy and the banking sector.
The CBN, which is the country’s central bank, is responsible for managing the supply of money in Nigeria. The discontinuation of the old naira notes is part of the CBN’s efforts to modernize and streamline the country’s monetary system.
The Supreme Court’s injunction has brought the issue of the scarcity of new naira notes to the forefront. The injunction orders the CBN to stop the planned discontinuation of the use of old naira notes pending the hearing of a suit on February 15, 2023. The potential implications of the injunction on the CBN and the Nigerian economy are significant.
The decision could lead to a clash between the CBN and the Supreme Court, which could further erode confidence in the Nigerian economy and the banking sector. And this is particularly so, considering the “independence of the CBN” as guaranteed by Section 1(3) of the CBN Act which states that “To facilitate the achievement of its mandate under this Act and the Banks and Other Financial Institutions Act, and in line with the objective of promoting stability and continuity in economic management, the Bank shall be an independent body in the discharge of its functions”.
It has been argued that if the Supreme Court does have her way by this intervention via legal means and without recourse to the above section, usurp the mandate of the Central Bank of Nigeria to initiate and implement monetary policy, the implications portend grave danger for the Nigeria economy and the future of Central Bank of Nigeria.
One of such dangers, as the argued is that moving forward, if the Supreme Court succeeds in up-turning the CBN, the Supreme Court might as well also go ahead and take over the monetary policy functions of the CBN. Indeed, a precedent would have been set such that anyone who does not feel comfortable with the lending rates as set by the Central Bank, can simply approach the court and pray the court to order the CBN to either reduce or increase the rates. This will be pure anarchy!.
Now, the confusion caused by the legal battle between the Supreme Court and the CBN has had a significant impact on the general public. Many people are left stranded and unsure about what to do with their old naira notes. The confusion could also affect the Nigerian economy and the banking sector. The uncertainty and lack of clarity could lead to a decrease in consumer spending, which could further slow down the country’s economic growth.
It is essential to resolve the confusion caused by the legal battle between the Supreme Court and the CBN. Most people waited for direction from the CBN, none came until yesterday when the CBN made clear of her decision to stick with the earlier directive that the old notes ceased to be legal tender effective February 10, 2023. A clear indication that it is disregarding the Supreme Courts’ injunction on the matter.
The public is left confused. Most businesses have started rejecting the old notes. Yet, the new notes are not in circulation. The situation may get worse if by the end of today, there is no solution to the non-availability of the new notes.
In the interest of the Nigerian masses, I want to propose that the Central Bank of Nigeria, in holding on to her position, should make available the N50 and N100 notes, push these out to the Banks and let the banks make them available either via ATM or over the counter. This will to a very large extent reduce the pains of the people and resolve the confusion in the country at the moment.
In conclusion, the scarcity of new naira notes in Nigeria has become a significant issue, and the legal battle between the CBN and the Supreme Court has only added to the confusion. As the legal battle begins today, the way forward should be one that inspires confidence in the Nigerian economy, the banking sector and the general public.
Richard Okpor
Richard may be reached via richard_okpor@yahoo.com.