The recent supreme court judgment in Nigeria mandating the Central Bank of Nigeria (CBN) to postpone the timeline for the ban on old naira notes has sparked debates and discussions about the immediate impact of the decision on the Nigerian economy and the policy itself.
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Nigeria’s Supreme Court temporarily halted any plans to ban the use of the old naira notes across the country. The ruling was issued on Wednesday, February 8th by a seven-member panel led by Justice John Okoro, based on an exparte application brought by three northern states of Kaduna, Kogi, and Zamfara.
The ban on old naira notes was aimed at promoting a cashless policy and reducing the amount of physical currency in circulation. But. the supreme court’s decision has now put a halt to the ban, and its impact is being felt across the economy.
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Creates Confusion – Firstly, the decision has created confusion in the banking sector and among the public. The initial deadline for the ban was February 10, but with the supreme court’s ruling, the CBN has been restrained from implementing the ban, leaving many banks and individuals uncertain about the status of the old notes.
- Banks are now unsure of whether they should continue accepting old naira notes, or whether they should prepare for a new deadline.
- This confusion could lead to a reduction in economic activity as people are reluctant to transact due to the uncertainty surrounding the old notes.
New notes distribution: Moreover, the postponement of the ban could also impact the inflow of new naira notes into the economy.
- While the CBN has been working (rather poorly) to distribute the new naira notes to banks, with the postponement, the inflow of new notes into the economy could slow.
- This could result in an acute shortage of new naira notes, particularly in rural areas where access to banks is limited and people are still skeptical about keeping the older notes beyond the Supreme court order.
- An increased shortage of new notes will make it even more difficult for people to transact, and this could have a ripple effect on the economy as businesses struggle to operate without adequate cash in circulation.
Financial Inclusion: Furthermore, the decision has impacted the efforts of the CBN to promote financial inclusion.
- One of the key reasons for promoting a cashless policy was to encourage more people to open bank accounts and transact digitally.
- This would increase the number of people with access to financial services and help to boost the economy.
- However, the postponement of the ban could create further setbacks to these efforts, as people will still hold onto their old notes, making it less likely that they will open bank accounts and transact digitally.
Monetary Policy could be impacted: Another impact of the supreme court’s decision is the delay in achieving the goals of the CBN’s monetary policy.
- The CBN has been working hard to reduce the amount of physical currency in circulation and promote a cashless policy for monetary policy reasons, particularly targeting inflation reduction.
- The postponement of the ban will slow down the achievement of these goals, and this could have a long-term impact on the economy.
- December inflation rate rose to 21.34% the first drop in over two years.
Increased Counterfeiting: Additionally, the postponement of the ban could lead to a rise in counterfeiting.
- The old naira notes are more susceptible to counterfeiting, and with the postponement of the ban, it is likely that there will be an increase in the circulation of counterfeit notes.
- This could have a negative impact on the economy as people are less likely to transact with old notes if they suspect that they may be counterfeit.
CBN’s independence: Finally, the supreme court’s decision has cast doubt on the independence of the CBN, even though most critics will suggest it never had been independent.
- However, the CBN is an independent body by an act of the National Assembly, and its policies are meant to be free from political interference.
- The supreme court’s decision to postpone the ban, based on an ex-parte injunction, could be seen as political interference and could undermine the credibility of the CBN and the policies it implements.
In conclusion, the introduction of new naira notes and the subsequent ban on old naira notes has had a significant impact on the Nigerian economy and the CBN’s policy.
- While the Supreme court decision helps to douse the controversy surrounding the ban it could exacerbate things if politics is allowed to get in the way.
You didn’t put into consideration the suffering of the commoners over this good policy but poorly executed.
You are condemning supreme court order but failed to see those already rioting and destroying banks because of cash scarcity. What is the essence of a policy that brings pains on the commoners. Policies should better the lives of the common People; and in a democracy government can’t be autocratic.
The independence of the CBN does not mean it’s above checks and balances.
Please try to be holistic in your analysis.
The CBN policy on naira redesign is good but poorly implemented.
CBN has good ideas but can’t implement it properly. The central bank governor is not good enough. Poor Nigerians are suffering. They’ve money in bank but have no access to the account. The governor should be fired.
Emefiele is a greedy unjust demonic possessive devil incarnate that has vowed to ruin the nation’s economy, devalue the naira. We need to probe him and I bet he would have stored billions somewhere.
If you’re to implement any policy, then you must make sure everything necessary to avoid any form of crisis is provided before hand.
People are in pain…!
Slow transactions, no network and at same time we’re now buying our own money because of your so called policy that is implemented poorly.
So I think the supreme court is right for the commoners sake.
I agree with you. I wonder what the CBN and its backers think of people literally buying access to their money. Doesn’t that increase the poverty of our people?
People are being charged up to 20% to get their money, and yet they still think the policy is a good one? The second and third order effects of the policy are certainly negating any perceived gains from it.
Good policy, poorly implemented. Please find a better option. Masses are suffering, buy our own money with exuberant price, this is bad in our own land.
The CBN hoisted the implementation issues on itself.and it has.admitted. Research shows that the three denominations being rebranded accounted for N2.7trillion of the N3trillion cash in the economy. Why would a CBN print N300 billion new notes.
The supreme court gave CBN an opportunity to remedy itself and cover it’s shame, so the economy can bounce back, it is unwillingly to do so preferring instead to spend forex to print additional currency, which would take say perhaps another 90 days import cycle. In international currency printing, it is done by order. In such instance, we would have to place an order and wait for our turn before production is done
The CBN should allow the economy to function by taking the CBN position and gradually withdraw the old notes say by September and sustain it’s cashless policy
All economic activities in the private and public sectors have grinded to a halt as there is no cash. People are not eating well any longer since they do not have cash to transact business
CBN is not sincere with the country. It was agreed that the minimum withdrawal by an individual be N500,000 monthly. The CBN did not implement this. The minimum is still N20,000. The implication of this economic slowdown is that the rate of inflation growth in February might significantly slow down. Of course, prices are still rising. CBN need to be understand the importance of cash to economic activities in Nigeria, the deficiency in bank locations, digital understanding, spatial distribution, network underdevelopment etc in fashioning out policy. The fear now are the influx of counterfeit, unrealised 2023 plans, public outcry and riots, decline in GDP, health challenges rise in hypertension etc,
I respectfully disagree witht the commentator. I believe the FGN and CBN should thank the Supreme Court for helping it prevent anarchy and chaos. The shear anger and frustration of people could have turned in to another Endsars situation.
It’ll be interesting to know what the ONSA’s guidance to the Presidency was last week about the likely scenarios resulting from continuing with the policy.
Those of us in Lagos and other Urban areas, especially in the South, need to understand that the reality of Nigeria is more complex than what our “analysts” pontificate on TV, Radio & Social Media.
We are suffering to get our own money
Infant we now buy money 💰 even the new and the old we didn’t see any everything just hang.
Let’s the CBN governor try to think it through, rethink and as well unthink the needful by jettisoning the idea(deadline). By so doing, amendment should rather be made to its implementation to the extent that it doesn’t affect the masses at large. Also note that where two elephants fights, the grass suffered a lot i.e.the majority people are suffering. Thanks a bunch in anticipation as we hope to seeing positive changes.
Many People are talking about the law, who make the law and who break the law is human being,, the law was made for human being, human being wasn’t made for the law, the law was designed to help each and individual,, if the law is bringing death penalty,rioting and causing commotion in the country then the law need to be abated and implement another law that is helpful. Is just like telling us to live in the law of Moses, the law of Moses was bring death and suffering of humanities , that’s why God send Christ to delivered the whole world, because he can’t destroyed the people He created just the so called law of Moses. I rest my case here for now,,,
You have spoken well..Ur reasons are well addressed..but what is the essence of implementing a policy without considering the plit of masses.. the ifs and ifs not should be properly considered before implementing any policy …as for CBN..the idea is Good but the policy implementation poor
The policy is poorly implemented. It should have been done in phases i.e N200 for a period of one year, N500 for a period of one year, and N1,000 for a period of one year making a period of three years. Simple
A good policy that is poorly implemented, I think the CBN should thank the Supreme court for coming in to help
Cbn monetary policy is nonsense so far ….u can implement a monetary policy without changing the notes or stopping one for the other
I think your caption: “The Dark Side of Supreme Court’s Decision to Keep Old Naira Notes in Circulation” is rather mischievous.
The supreme court saved the Nation from terrible backlash resulting from the poor policy formulation and implementation of the CBN.
Every patriotic Nigerian (though hard to find this days) should unanimously condemn and berate the overbearing incompetence of the CBN governor. Note that our exchange rate problem started with his I’ll thought out I’ll implementated policy of 2016.
The CBN governor seems to be so quick at rolling out these bad policies but incapable of providing an remedial action.
The Supreme Court is the solution. The CBN is the problem here.
You are trying to justify the unjustifiable and excuse the unexcusable by shifting the blame away from the culprit CBN to the Supreme Court, your analysis is professionally off in my opinion.