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· Apex bank quiet since Supreme Court ruling
· Private businesses suffer in Q1 – Report
As the federal government-induced cash crunch continues to bite, residents of the Federal Capital Territory, FCT, are anxiously waiting on the Central Bank of Nigeria, CBN, to carry out the ruling of the Supreme Court which ordered the recirculation of the old Naira notes till December 31, 2023.
On Friday, after the apex court ruled on the matter, bank premises were still crowded with customers in desperate search for cash to meet household needs, while automated teller machines, ATMs, looked deserted, signaling non-availability of cash.
Some residents who spoke with The Abuja Inquirer wondered why the chief banker, Mr. Godwin Emefiele, was yet to direct the banks on the next step.
“It is worrying that the CBN was yet to abide by the directive of the highest court in the land. This is Friday, yet the CBN governor, Mr. Emefiele, is yet to issue a directive. He should know that there is no way out of this,” an Abuja resident, Ushie Edem, stated.
Also, a housewife, Mary Okon, expressed regrets at the suffering of most Nigerians including her family and advised the CBN to without delay direct the banks to begin the immediate implementation of the apex court’s ruling.
Okon said, “We have suffered, Nigerians have had a very tough few weeks and we deserve some respite. We thought that not more than two days after the Supreme Court ruled, the CBN should have acted on it. Maybe Mr. Emefiele and his people do not want to obey the Supreme Court that is why he is not acting yet.”
Recall that Supreme Court had faulted CBN’s implementation of the naira redesign policy, describing it as an affront on the 1999 constitution of the country.
The ruling followed a suit filed by Kogi, Kaduna, and Zamfara state governors along with 10 other states, challenging federal government’s deadline to phase out old notes.
According to the states, the CBN policy is imposing a lot of hardship on Nigerians and insisted that the ten-day extension by the federal government was still insufficient to address the challenges of Nigerians swapping their old Naira notes for new ones.
The court, therefore, extended the validity of the old naira notes till December 31, 2023, putting an end to the debate and economic crisis that greeted the policy.
Justice Emmanuel Agim, who read the lead judgment, held that the preliminary objections by the defendants, the Attorney General of the Federation, Bayelsa and Edo states, are dismissed as the court has the jurisdiction to entertain the suit.
Citing Section 23(2)1 of the constitution, the court held that the dispute between the Federal Government and states must involve law or facts.
The ruling therefore ordered that the old N200, N500 and N1000 notes remain in circulation till December 31, 2023.
It also restrained President Muhammadu Buhari and the CBN, from a full implementation of the naira redesign policy.
However, over 48 hours after the ruling, the situation remains unchanged as the apex bank maintains graveyard silence over the decision of the apex court.
Also recall that an earlier order issued by the Supreme Court, on the same issue, to maintain the status quo, was flagrantly violated as banks further tightened the noose on disbursements to customers.
In a related development, Stanbic IBTC Bank’ February Purchasing Managers’ Index data indicated that the shortage of cash across the country in the month of February might have a negative influence on the private sector halfway through the first quarter of the year.
Part of the report reads, “The headline PMI dropped below the 50.0 no-change mark in February, posting 44.7 from 53.5 in January. Business conditions deteriorated markedly, ending a 31-month sequence of expansion.
“The decline in operating conditions was the sharpest since the survey began in January 2014, excluding the opening wave of the COVID-19 pandemic in the second quarter of 2020.
“The most severe impacts of cash shortages were seen with regards to output and new orders, which both fell substantially as customers were often unable to secure the funds to commit to spending.
It added that “The decline in new orders was the first since June 2020, while the fall in output ended a seven-month sequence of growth. In both cases, the reductions were the most pronounced in the survey’s history, apart from during the opening wave of the COVID-19 pandemic.
“With new orders and output falling, companies reduced their input buying and staffing levels accordingly. The declines were the first in 32 and 25 months respectively. The decrease in purchasing reflected not only a drop in customer demand but also difficulties for companies to find the funds to pay for items.”
The report also showed that scarcity of cash also led to an increase in the cost of fuel, and operational costs of businesses and organisations.
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