..apex bank likely to pump more cash into circulation today
As the cash crunch occasioned by the Central Bank of Nigeria’s naira redesign policy bites harder, the Nigeria Employers’ Consultative Association (NECA) has asked the apex bank to quickly release more new naira notes into the economy or allow the use of the old ones.
NECA said this could be a way out in the immediate pending a time when the CBN would “demonstrate competence by not always putting the cart before the horse in the implementation of monetary policies”.
News Agency of Nigeria (NAN) reports that NECA’s position is in alignment with the position of the Council of State which had last week made a similar suggestion to the CBN.
In a statement in Lagos on Sunday, NECA’s Director-General, Adewale-Smatt Oyerinde, pointed to the damaging effects of the cash crunch on businesses and the economy at large.
‘’In the last few weeks, with the cash squeeze and the purchasing ability of Nigerians greatly impaired by the poor implementation of the policy, the economy has witnessed a significant bashing,” Oyerinde said.
He cited a report stating that the real sector had witnessed about 40 per cent drop in productive activities.
‘’As the cash crush continues, thousands of productive hours are lost daily on queues by employees and many cannot even get to work,” he said.
The NECA DG said the value chain in the formal and informal sector with over N10 billion cash transaction daily was almost destroyed with consequences for employment, business sustainability and national development.
He called for critical and immediate effort to be made to improve or upgrade alternative routes to cash, thereby ensuring seamless transactions before going digital.
He said the series of actions being taken by the CBN now in the form of having Agent Naira Swap, among others, were afterthoughts following the reality of resistance by Nigerians.
‘’It is callous to deprive citizens of the new naira notes after cajoling them to deposit the old ones in the banks,” Oyerinde said, urging the CBN to sanction the commercial banks found complicit “in the whole show of shame, even as the CBN cannot extricate itself from being complicit”.
‘’As an immediate action, we align with the position of the Council of State that the CBN should release more new naira notes into the economy or allow the use of the old ones, pending a time when it will demonstrate competence by not always putting the cart before the horse in the implementation of monetary policies,” Oyerinde said.
The NECA boss said while the CBN naira redesign policy was laudable given its stated objectives, it was flawed by improper implementation and shortsightedness, much like many of the bank’s policy initiatives.
He said for a definitive monetary policy as the naira design, the CBN was expected not only to take lessons from other countries like India, Myanmar, Australia, Venezuela, Zimbabwe and the European Union, which witnessed various degrees of successes and failures in the implementation of their currency redesign, but also do a thorough analysis and simulation of social and economic challenges that would likely arise as well as definitive response to those challenges.
‘’Thus far, it does not seem that the CBN understands the challenges, nor have solutions to the economic issues, thereby allowing speculators and economic saboteurs to have a field day at the expense of legitimate businesses and the economy,” he said.
Meanwhile, The Nation is reporting that the CBN may pump in more new naira notes into circulation today (Monday) through the banks to ease the pressure on Nigerians.
“The CBN will do the needful to ensure that innocent Nigerians’ pains are eliminated. To this end, more new naira notes will be allocated to the banks from Monday for disbursing to the public,” The Nation quoted a CBN board member as saying.
The source, according to The Nation, said the CBN’s plan to pump in more new notes would bring about N1 trillion of the new notes into circulation, adding that the apex bank was being careful “not to flood the system with naira notes, thus creating another currency control problems for it with attendant inflationary pressures”.
The person also confirmed that the apex bank would abide by the Supreme Court’s decision to suspend enforcement of a deadline on the deposit of old naira notes until February 15 when the court would hear the suit instituted by three governors.