Thursday, 5th October 2023

Naira redesign: Urgent need for a post-mortem

By Editorial Board
04 April 2023   |   4:10 am
At last, the leadership of the Central Bank of Nigeria (CBN) has eaten its words on the disastrous implementation of the naira redesign policy. Besides the sluggish return of the old currencies into circulation, average Nigerians ...

New Naira

At last, the leadership of the Central Bank of Nigeria (CBN) has eaten its words on the disastrous implementation of the naira redesign policy. Besides the sluggish return of the old currencies into circulation, average Nigerians and other victims deserve a post-mortem disclosure on the unfortunate policy, and why it was foisted with defiance – despite entreaties, and glaring hardship that made civil disobedience most tempting for all. 

Importantly, given that Nigerians are still languishing in the cash crunch and related issues, President Muhammadu Buhari and CBN Governor, Godwin Emefiele must know that the soft landing provided for them by the Supreme Court’s order will not ease the problem permanently, unless it is backed by proactive efforts to make new currencies available to the masses in the right quantum, and within the period stipulated by the court. It is clear that achieving a cashless economy in Nigeria requires more time and deeper thinking than are presently envisaged in the government naira redesign and swap policy.  
In a treatise titled, “Letter from Birmingham Jail,” Martin Luther King Jr., with some posers, partly captures the Nigerian currency debacle scenario thus: “One may well ask: ‘How can you advocate breaking some laws and obeying others?’ The answer lies in the fact that there are two types of laws: just and unjust. I would be the first to advocate obeying just laws. One has not only a legal but a moral responsibility to obey just laws. Conversely, one has a moral responsibility to disobey unjust laws. I would agree with St. Augustine that, ‘an unjust law is no law at all.’

“Now, what is the difference between the two? How does one determine whether a law is just or unjust? A just law is a man-made code that squares with the moral law or the law of God. An unjust law is a code that is out of harmony with the moral law. To put it in the terms of St. Thomas Aquinas: An unjust law is a human law that is not rooted in eternal law and natural law. Any law that uplifts human personality is just. Any law that degrades human personality is unjust.”
The excerpts above are relevant and valid in the scheme of things, especially as it relates to the issue of the Central Bank of Nigeria’s (CBN) naira redesign policy within the last three months. Nigerians have had to question whether the rule of law remains sacrosanct as seen in the actions of critical stakeholders, including the president, in the period that the imbroglio lasted.
While the government failed to heed the rulings of its courts, civil disobedience became the order of the day as Nigerians defied the CBN’s order banning the use of old N1, 000 and N500 notes as legal tender in the country, even though they were handicapped, as many Nigerians, unsure of what could become of the worth of the old naira notes, were reluctant or unwilling to accept them in transactions. As the negative impacts of the naira policy lingered, Nigerians had to weigh their options between breaking the laws or obeying an unjust law.

Expressing concerns about the lawlessness witnessed with respect to obeying the rule of law, Justice Emmanuel Agim of the Supreme Court, on Friday, March 3, 2023, stated: “The rule of law upon which our democratic governance is founded becomes illusory if the President of the country or any authority or person refuses to obey the orders of courts. The disobedience of orders of courts by the President in a constitutional democracy as ours is a sign of the failure of the constitution and that democratic governance has become a mere pretension and is now replaced by autocracy or dictatorship.”
Justice Agim held that the President failed to consult the National Council of States, the Federal Executive Council and the National Economic Council before directing the CBN to introduce new naira notes. The apex court maintained that Buhari usurped the powers of the CBN when he issued the directive banning the old naira notes from February 10, 2023 and by doing so made the action ultra vires. It held that the unconstitutional use of powers by Buhari on the naira re-designing breached the fundamental rights of the citizens in various ways, adding that such use of powers by the President was not permitted under democracy and was an affront to the constitution. Among others, the Supreme Court held that unlawful use of executive powers by the President inflicted unprecedented economic hardship on the citizens. The court also ruled CBN out of order for placing withdrawal limits on money deposit bank customers.

What Nigeria is currently witnessing is not what they bargained for, despite being forewarned about the hasty implementation of the policy. Ordinarily, before the CBN will embark on the slapdash implementation of the new naira notes and the cashless policy, it ought to learn about possible outcomes of such exercises from the economies that had towed the same path. There are overwhelming pointers now that government, through its agency the Central Bank of Nigeria, was not sufficiently diligent or painstaking in its contemplation. In 2016, India embarked on a demonetisation policy, and the outcomes had been abysmally destructive to the MSMEs in the country. Years after, many micro and small enterprises are yet to recover from the damaging effects of India’s 2016 demonetisation exercise.
To be continued tomorrow