CPPE Lauds Supreme Court Restraining Order On Cash Swap Deadline

The Centre for the Promotion of Private Enterprise (CPPE) has indicated support for the restraining order by the Supreme Court on the timeline for the currency swap.

In a release sent to CSR Reporters and signed by the CEO of CPPE, Muda Yusuf, they explained that the restraining order would restore normalcy to economic activities, especially in the distributive trade sector as well as douse current social tension and the risk of social unrest in the country.

The small businesses and the ordinary citizens, according to the release, were the biggest victims of the unspeakable disruption and hardship inflicted by the impractical deadline given by the CBN on cash swap as they were the biggest users of cash.

“The CPPE reiterates its position that given the huge population of over 200million, the large informal sector which accounts for over 4 per cent of the GDP, the large rural economy and the over 30 million unbanked Nigerians, the CBN cash swap model and timeline was greatly flawed.  It is inappropriate to arbitrarily cut down on currency in circulation without due regards to data, empirical studies and global best practices.

“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.”

CPPE revealed that onboarding citizens onto the cashless platform should not be decreed or forced on them, rather, it should be voluntary and incentive-driven. They also stated that In Nigeria, cash to GDP ratio is less than 1.5 per cent while cash/money supply ratio is just 5 per cent.

These, they said, were some of the best currency ratios globally and marked the remarkable progress that has been made in the cashless policy drive. Cash to GDP in the United States, according to them, is about nine per cent, while in the Eurozone it is about 10 per cent.

“This underlines the 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. This has obscured fundamental economic conversations.

“Meanwhile, in compliance with the Supreme Court order, we urge the CBN to immediately 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 within a space of three to six months.”

In conclusion, the release emphasised that all the cash that have been mopped up should be released to their owners, unless there were reasons to suspect such lodgments, in which case, it should be escalated to the anti graft agencies.

Furthermore, they said that citizens that have lodged their cash for purposes of cash swap should be allowed unfettered access to their money.