Adjournment on cash swap: Economists urge CBN to address bottlenecks

Some economists have urged the CBN to identify and address the bottlenecks associated with the cash swap policy, causing uncertainty and currently pervading the economic environment, following the old Naira notes that cease to be legal tender since Feb. 10.

The experts, who made the appeal in separate interviews with our reporter in Lagos, said that it was necessary to ease tension emanated from the cash swap policy

They were reacting to the Supreme Court’s adjournment of the suit filed by some state governments, challenging the Feb.10 deadline set by CBN to end the use of old Naira notes.

Mr Johnson Chukwu, Managing Director of Cowry Asset Management, said that the situation at hand was no longer a case of judicial directive or order, but about what should be done to relieve the pressure on citizens.

“I have argued repeatedly that CBN can order the commercial banks to pay as much as N100, 000 over the counter, and if they do that and people are able to withdraw at least N100, 000 per week, I believe the pressure will come down and people will get some relieve,’’ he said.

According to him, the apex bank has made its position clear that the old currency notes are no longer legal tender after Feb.10.

He said also that the apex bank did not flout any order of the Supreme Court as it (CBN) was not joined in the suit.

In the same vein, Ndubisi Nwokoma, Professor of Financial Economics and Director, Centre for Economic Policy Analysis and Research, University of Lagos, Akoka, urged the apex bank to identify where there were bottlenecks and address it.

“I think CBN should make an effort to identify where the bottlenecks are and address them. They need to enhance printing of the redesigned Naira notes and its effective distribution through the deposit money banks.

“The battle over the old notes and the Supreme Court case, in my view, is largely about the 2023 elections and the incidence of vote buying.

“The battle is less about the current sufferings of the ordinary person and more about the interests of some politicians who have stashed away huge sums of the old notes for use in mobilising for the elections.

He urged Nigerians to support the apex bank’s policy, saying that CBN’s position on old notes ceasing to be legal tender after Feb. 10, appears reasonable enough for public support, at least to protect the integrity of the 2023 elections.

Also, Prof. Akpan Ekpo of Economics and Public Policy at the University of Uyo, Akwa Ibom, who described the postponement as “unfortunate’’, wished the court had delivered judgment on the matter.

“But I think the Supreme Court is the highest court in the land, the Central Bank is not bigger than the Nigerian Constitution and by this all government agencies, organs and so on, are supposed to enforce Supreme Court’s order and everybody has to obey it.

“My concern is that until February 22, the old notes have to be accepted in line with the new ones, that’s my understanding. So, everybody should be patient and wait until February 22,’’ he said.

In his view, Prof. Sherifdeen Tella, Economics Department at the Olabisi Onabanjo University, Ago-Iwoye, Ogun, believed that the Supreme Court’s failure to punish CBN for flouting its order was what was fueling the confusion in the economy.

“The postponement of hearing on the CBN policy may be in order, if the court feels it needs time.

“But failure to punish those flouting its orders, including the CBN, that the old Naira remains acceptable for transactions is fueling the confusion in the economy.

“Or, does anyone need to go to court separately to sue for violation of court order by CBN, banks and even a court in Lagos? Tella said.

Uche Uwaleke, Professor of Capital Market at the Nasarawa State University , Keffi, said, “ the postponement would only heighten the anxiety and uncertainty currently pervading the economic environment, especially against the backdrop of the fact that the CBN has maintained Feb. 10, as the date the old notes cease to be legal tender.”

The Supreme Court of Nigeria has adjourned the suit on Naira Swap policy to Feb. 22, to allow it consolidate all cases on the matter emanating from nine more states of the Federation seeking to be joined in the suit.

Nine more states have been joined as parties in the suit initially filed by Kaduna, Kogi and Zamfara State governments challenging the legality of the Naira swap policy of the federal government.

In a ruling on Wednesday, a seven-member panel, led by Justice John Okoro, the apex court joined the attorneys-general of Katsina, Lagos, Ondo, Ogun, Ekiti, Cross River and Sokoto States as co-plaintiffs, while the attorneys-general of Edo and Bayelsa states were joined as co-respondents.

The court has, however, fixed hearing of the case to Feb. 22.

Consequently, the court ordered the original plaintiffs and the respondents, the attorney-general of the federation and minister of justice to amend the processes already filed to reflect the new parties.