Lagos, Feb. 9, 2023 – Dr. Muda Yusuf, the Chief Executive of the Centre for the Promotion of Private Enterprise (CPPE) in Lagos, says Supreme Court’s order will restore normalcy to economic activities.
The apex court had on Wednesday granted an interim injunction restraining the Central Bank of Nigeria (CBN) from enforcing its Feb. 10, 2023 deadline on currency swap.
Yusuf said this in a statement in Lagos on Thursday.
He said the order would also douse current social tension and the risk of social unrest in the country.
Yusuf advised the CBN to allow the old and new currency notes to co-circulate until such a time when the old notes are gradually and completely withdrawn.
“This is global best practice. This should happen between within a space of three to six months,” he said.
Yusuf also said that all the cash that had been mopped up should also be released to their owners unless there were reasons to suspect such lodgments.
He said that citizens that had lodged their cash for purposes of the cash swap should be allowed unfettered access to their money.
“We affirm our position that N2.6 trillion currency in circulation is not too much for the Nigerian economy with a GDP of about N250 trillion.
“Any attempt to arbitrarily cut it will create a crisis. It is unacceptable that citizens are denied access to their cash deposited for purposes of cash swap.
“This could undermine the confidence of the citizens in the banking system and pose a major risk to the financial inclusion objective of the CBN.
“Onboarding citizens unto the cashless platform should not be decreed or forced on them. It should be voluntary and incentive driven.
“In Nigeria, Cash to GDP ratio is less than 1.5%; while Cash/Money supply ratio is just about 5%.
“These are some of the best currency ratios globally and mark of the remarkable progress that has been made in cash-less policy drive.
“Cash to GDP in United States is about 9%; in the Eurozone it is about 10%.
“This underlines that fact that cash is not the problem of the Nigerian economy or monetary policy effectiveness.
“CBN Ways and Means financing of over N22 trillion is a much bigger problem for liquidity management.
“It is regrettable that a purely monetary policy management issue has been profoundly politicized as witnessed in the past few weeks,” he said. (GBN)
