For weeks, there has been chaos in Nigeria’s micro and macroeconomic sectors as commercial banks, business owners and Nigerians continued to count their revenue losses owing to the untamed naira crisis.
The pain of Naira scarcity has been on the lips of many Nigerians, including corporate, small-scale businesses, petty traders, transporters and the high and low in the Nigerian economy.
The hardship has no boundary. Everyone has been affected differently.
In his latest intervention, the President of Nigeria, Muhammadu Buhari, asked that the old N200 notes co-exist with the new naira notes till April 10th; however, days after, there has yet to be respite as Buhari’s remarks continue to generate different reactions.
Governors of Kaduna, Ondo, Ogun, Kano, Lagos, and five other states openly voiced their displeasure with Buhari on the naira redesign policy. They said Buhari’s directives contravened the Supreme Court’s ex parte order restraining the CBN from implementing the February 10 deadline to phase out old naira notes.
Legally, Senior Advocates of Nigeria, SANs, have described Buhari’s directive disregarding the order of the country’s apex Court as executive rascality.
Mike Ozekhome, Ebun Adegborunwa, Tayo Oyetibo, Kabir Akingbolu, and other senior lawyers described Buhari’s directive as contemptuous against the Supreme Court.
The legal luminaries made their positions known with knowledge of the CBN Act 2007, particularly section 19, which empowered it with the sole responsibility to design and issue the country’s currency.
Perhaps, Nigerians are still waiting to see the end to the naira redesign logjam till the Supreme Court hearing slated for February 22.
Banks reduce operations over fear of attack
In the corporate sector, bankers now live in perpetual fear as angry protestors have set ablaze some banks over the naira crisis in Edo, Delta and other states.
Banks have reduced banking operations in some crisis-prone branches, which would invariably affect their revenue turnover. Point of Sales agents have closed their businesses because of the non-availability of cash, and others businesses have rejigged their models to embrace the reality on the ground.
Macroeconomics, Microeconomics effect of Naira redesign crisis
Similarly, economists have stated that on the macro level, the crisis would reduce the Nation’s Gross Domestic Product, GDP, and employment figures.
Ayo Teriba, CEO of Economic Associates and Bismarck Rewane of Derivatives, advanced this position.
Teriba told DAILY POST that Nigeria should expect macroeconomic losses owing to the ongoing naira crisis.
According to him, the country’s GDP is expected to decline in the first quarter, among other effects of the needless Naira redesign controversy.
Rewane disclosed that the loss might be close to $18 million owing to the negative effect of the policy.
From a microeconomics angle, small businesses such as petty traders have lamented a drastic drop in sales and revenue.
Ismaila Bashir, a clothing shop owner in Wuse market, decried the drop in patronage since the naira crisis started weeks ago.
“We in the industry have witnessed reduced patronage for weeks now. At times, you come to shop, but no customer for a whole day. The situation is frustrating,” he said.
Also, a commercial vehicle driver in the federal capital territory, Ejike Okafor, disclosed that only a few commuters are on the road because of the cash crunch.
“For instance, when driving to Wuse market today (Monday), most passengers asked me if I would accept a transfer; I could not carry them. Three out of five passengers preferred transfers rather than cash. In the long run, the situation affected my revenue, before I made close to N6,000 daily, but today I cannot make half of it”, he stated.
Earlier, a group known as The Association of Senior Staff of Banks, Insurance and Financial Institutions disclosed that commercial banks have lost close to N5 billion to recent attacks and destruction of bank facilities over the currency crisis.
Speaking to DAILY POST on Monday, Abdul Imoyo, the Head of Media Relations Access Bank Plc, said the bank cannot quantify its losses incurred at the moment owing to the currency crisis outside the vandalization of its properties in some locations by protesters.
“We cannot calculate the revenue losses at the moment except the losses recorded from our assets that protesters destroyed. The currency crisis is regrettable, but we will soon realize normalcy.
“Reports from our branches nationwide showed that we have started dispensing the old N200 notes as directed by the Central Bank of Nigeria; also, we are now receiving the old N500 and N1000 notes from customers who have filled the CBN’s forms.
“The crowd in the banking halls is expected to surge as baking activities have increased. With time, the confusion surrounding naira availability will be a thing of the past”, he stated.
On his part, a financial expert and former bank manager, Mr Gbolade Idakolo, said the gamut of Buhari’s solutions to the currency crisis had not been far–reaching.
He stated that CBN’s determination to starve the economy of cash to prevent vote-buying by politicians during the forthcoming election has led to rather intense starvation and hardship for the ordinary people.
He said, “The president’s response to the crisis is not far-reaching because the release of the old N200 notes alongside the new notes has kept the situation the same. The resultant reactions to these are the riots last week in most of the southern states, with most Governors in the northern states assuring and mandating their citizens to use the old notes alongside the new ones and threatening businesses that refuse to collect the old naira notes for transactions.
“The prevalence of cash scarcity has affected all sectors of the economy, and we can only hope things will improve after the elections. The CBN is determined to starve the economy of cash to prevent politicians from distributing money during the election, but the crushing effect has led to deaths and starvation.
“I want to appeal to the Government to think about the people whose behalf the policy is implemented”.
Also, a Professor of Management and Accounting at Lead City University, Ibadan, Godwin Oyedokun, said problems with implementing the naira redesign showed that the country needs more capacity and focus.
“We certainly lack capacity in Nigeria; most policies attempt to affect certain classes. If the policy had been of good faith, we wouldn’t have found ourselves where we are today. We have realized that the Naira redesign is laced with sentiments, lack of focus, capacity and political gymnastics. If you look at this Government, they are grossly known for abusing court orders.
“The president’s statement is so glaring that he is hell-bent on implementing the policy.
“The mistake in the lack of the new naira note is not because CBN could not print the new naira notes but because of the so-called people being able to be smarter than CBN. They have been able to exchange the old naira notes for the new notes for election purposes.
“Because of the accumulated anger by Nigerians, even those who do not have money join in the protest to vandalize commercial banks”, he disclosed.
Meanwhile, whether the currency hardship would count in the election remains a sole decision of Nigerian electorates.