IMF Warns CBN, Others Of Rising Inflation
The International Monetary Fund has urged the Central Bank of Nigeria and other monetary authorities to deemphasise monetary policy as a way of tackling the resurgence of inflation.
In a new report titled “Rethinking monetary policy in a changing world,” the Washington-based lender said the ability of central banks to set monetary policy and control the economy in more fraught times hinges on its independence.
According to the report, the low-interest rates and less extreme public debt levels that prevailed after the global crisis of 2008 permitted central banks to ignore what were then relatively inconsequential interactions between monetary and fiscal policy.
However, during the COVID-19 crisis, circumstances changed dramatically, and government spending rose sharply in many economies, the report stated.
It noted that as spending was increasing, countries were hit by supply shocks of unprecedented proportion, largely the result of pandemic-related problems—such as supply chain disruptions, which added to inflation pressures.
The report read in part, “The pandemic demonstrated that monetary policy does not always control inflation on its own. Fiscal policy also plays a role. More importantly, the accompanying buildup of public debt raised the possibility of fiscal dominance—in which public deficits do not respond to monetary policy.
“Whereas low debt levels and the need for stimulus allowed monetary and fiscal authorities to act in tandem following the global financial crisis, the prospect of fiscal dominance now threatens to pit them against one another.”
Noting that the central bank’s position may come into conflict with the government’s desires, the IMF said central banks could retain independence only if they promise not to accede to any government desires to monetise excessive debt, which would then force authorities to cut spending or increase taxes, or both—so-called fiscal consolidation.
“Most important, the central bank must keep public opinion on its side, because the public is the ultimate source of its power and independence. That means the central bank should effectively communicate the rationale for its actions to retain public support, especially in the face of fiscally driven inflation.
“A central bank ultimately maintains its dominance if it is able to credibly promise that it will not bail out the government by monetising public debt if there is a default,” the report read further.
CBN Bows To Pressure, Says Old Notes Remain Legal Tender Till December 31st
Exactly 10 days after the Supreme Court judgement mandated the use of old N,1000 and N500 notes as legal tender till December 31, 2023, the Central Bank of Nigeria Governor, Godwin Emefiele, on Monday bowed to pressure and officially ordered commercial banks to comply with the court verdict.
He also announced that the old N200, N500 and N1,000 would remain legal tender till the end of the year.
Emefiele said the decision followed a meeting with the Bankers’ Committee that held on Sunday.
The development has put an end to the confusion over the legality of the old naira notes. The action is also expected to ameliorate the suffering of Nigerians who have faced severe hardships over the scarcity of new naira notes amid the controversial ban on the old notes.
The acting Director, Corporate Communications, Isa AbdulMumin, disclosed the latest development in a statement titled, ‘Old N200, N500, and N1,000 banknotes remain legal tender – CBN’.
The statement read, “In compliance with the established tradition of obedience to court orders and sustenance of the rule of law principle that characterised the government of President Major General Muhammadu Buhari (retd.), and by extension, the operations of the Central Bank of Nigeria, as a regulator, Deposit Money Banks operating in Nigeria have been directed to comply with the Supreme Court ruling of March 3, 2023.
“Accordingly, the CBN met with the Bankers’ Committee and has directed that the old N200, N500 and N1,000 banknotes remain legal tender alongside the redesigned banknotes till December 31, 2023. Consequently, all concerned are directed to conform accordingly.”
Earlier on Monday, the Nigerian Bar Association and Nigeria Labour Congress had berated the Federal Government and the CBN for failing to obey the Supreme Court judgment on the old naira notes.
On Sunday, the Arewa Consultative Forum in a statement said Buhari’s failure to obey the Supreme Court would tarnish the reputation of his regime.
The NBA came down hard on the President and the Attorney-General of the Federation, Abubakar Malami, for failing to obey the Supreme Court judgment.
The Supreme Court had in its March 3 judgment extended the legal tender status of the old N200, N500, and N1,000 notes until December 31.
However, the AGF and the CBN Governor, Godwin Emefiele refused to comply with the order despite pressure from Nigerians. Their actions also encouraged commercial banks to reject the old notes as legal tender.
Worried by the development, state governments involved in the suit threatened to file contempt charges against the two officials on Tuesday (today) should they fail to obey the apex court order.
In the judgment delivered by Justice Emmanuel Agim, the Supreme Court held that Buhari breached the constitution in the manner he issued directives for the naira notes.
The seven-man panel also slammed the President over his February 16 broadcast in which he said only the N200 note should remain legal tender in flagrant violation of the restraining order made by the apex court.
Justice Agim 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.”
Speaking on the continued disobedience of the Supreme Court, the NBA President, Yakubu Maikyau, SAN, on Monday warned that the bar would resist any action undermining the rule of law, constitution and democracy in the country.
The seven-page statement was titled, ‘’Statement of the NBA President, Yakubu Maikyau, SAN, on the naira redesign policy: Demand for compliance with the judgment of the Supreme Court in suit no.: SC/CV/162/2023 Between Attorney-General of Kaduna State and nine others vs Attorney-General of the Federation and two others delivered on March 3, 2023.
Citing several paragraphs of the Supreme Court verdict which berated the President for disregarding the orders, the NBA said it was sad and disheartening that the Federal Government and its agency, the CBN remained adamant about the plight of Nigerians which was a direct consequence of the implementation of the naira redesign policy in spite of several interventions for its review.
The body of lawyers noted, “Regrettably, not even the clear findings by the Supreme Court as to the unfair and deceptive nature of the policy could make the Federal Government retrace its steps.
’The Supreme Court went to the extent of not only condemning the actions of the President as contemptuous of the court but also held that the actions constitute a threat to the rule of law and the existence of our democracy.
“We cannot under any guise or pretence accept or tolerate any appearance of autocracy or dictatorship. Our system of democratic governance has come to stay, it must not only be respected by all and sundry but must also be jealously guarded and protected.’’
The NBA president described the situation as the greatest test or challenge to the nation’s constitutional democracy, stressing that the executive could not afford to disregard the orders of the Supreme Court made for the benefit of the people that elected it to power.
“I therefore, on behalf of all Nigerians, call on the President to immediately direct compliance with the terms of the orders made by the Supreme Court in its judgment delivered on 3 March 2023,’’ he said.
Insisting on obedience to the orders of the court, Maikyau declared, “The Supreme Court has issued directives to the Federal Government for the benefit of the people and there is no option other than to comply. The President is under constitutional obligation to comply and enforce the decision of the Supreme Court.’’
Maikyau said the NBA remained committed to the promotion, entrenchment and respect for the rule of law, the integrity of the court and the independence of the judiciary, adding, “The NBA shall stand up against any action that seeks to undermine the rule of law, the integrity of the court and the independence of the judiciary.’’
He commended the judgment of the apex court, saying it not only spoke to the responsibility of the court to the people but also its bounden duty to protect the rule of law and the integrity of the court
“The Supreme Court has by this judgment proven to be the Supreme Court of the people of Nigeria,’’ the bar association further noted, stating that whenever public confidence in the other arms of government begins to wane, the legal profession, in particular the judiciary, must rise to the occasion by delivering justice with such courage and precision to provide succour to the people.
‘’This is what the Supreme Court has done so boldly and courageously in this instance,’’ Maikyau further noted.
Quoting section 287 (1) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) to buttress its stand, the NBA stated, “The decisions of the Supreme Court shall be enforced in any part of the Federation by all authorities and persons, and by the court with subordinate jurisdiction to that of the Supreme Court.”
The statement explained further that Nigerians may not be too enchanted with the judiciary, arising from unsubstantiated and spurious allegations of judicial misconduct.
The fact, it argued, remains that the citizens still must look to the judiciary as the only and final resort, to protect their rights as a people and secure probity in public life.
‘’The Supreme Court has spoken for the people of this nation and has appropriately issued orders to the executive and the orders of the court must be complied with,’’ Maikyau held.
The Senior advocate disclosed that in the wake of the naira redesign policy, the NBA engaged in wide consultations with critical stakeholders to assess the possible impact of the policy on the economy and the people.
The body of lawyers said, incidentally, the CBN’s cash swap programme has not addressed the concerns of Nigerians post-January.
He lambasted the CBN governor’s shoddy handling of the controversial policy.
In a new development, the leadership of the NLC has issued a seven-day ultimatum to the Federal Government to end the cash crunch in the country.
The president of the NLC, Joe Ajaero issued the ultimatum on Monday in Abuja, at the opening session of the Central Working Committee meeting of the labour union.
Ajaero frowned on the difficult situation foisted on Nigerians as a result of the cash swap policy of the Federal Government and warned that on the expiration of the seven days, workers would be directed to stay away from work if nothing was done to ameliorate the situation.
The NLC president criticised the current fuel scarcity, lamenting that workers and Nigerians are being pushed to the wall.
‘’On this issue of fuel scarcity and cash crunch, Congress wishes to inform the Federal Government that we will no longer keep quiet.
“NLC is giving the CBN and the FG seven working days, if they fail to do the needful at the expiration of the seven days, all workers in Nigeria should stay at home,” Ajaero stated before the meeting went into a closed-door session.
But breaking his silence on the non-compliance with the Supreme Court order, the Presidency has said at no time did the President instruct the AGF and CBN governor to disobey any court orders involving the government and other parties.
The Senior Special Assistant to the President, (Media & Publicity), Garba Shehu stated this in a statement on Monday titled, ‘President Buhari never told AG and CBN gov to defy Supreme Court order.’
It said, “The Presidency wishes to react to some public concerns that President Muhammadu Buhari did not react to the Supreme Court judgment on the issue of the N500 and N1,000 old currency notes, and states here plainly and clearly that at no time did he instruct the Attorney General and the CBN governor to disobey any court orders involving the government and other parties.
“Since the President was sworn into office in 2015, he has never directed anybody to defy court orders, in the strong belief that we can’t practise democracy without the rule of law and the commitment of his administration to this principle has not changed.
‘’Following the ongoing intense debate about the compliance concerning the legality of the old currency notes, the Presidency, therefore, wishes to state clearly that President Buhari has not done anything knowingly and deliberately to interfere with or obstruct the administration of justice.
“The President is not a micromanager and will not, therefore, stop the Attorney General and the CBN governor from performing the details of their duties in accordance with the law. In any case, it is debatable at this time if there is proof of wilful denial by the two of them on the orders of the apex court.’’
According to Shehu, the directive of the President, following the meeting of the Council of State is that the apex bank must make available for circulation all the money that is needed and nothing has happened to change the position.
He added, ‘’It is an established fact that the President is an absolute respecter of the judicial process and the authority of the courts. He has done nothing in the last eight or so years to act in any way to obstruct the administration of justice, cause a lack of confidence in the administration of justice, or otherwise interfere or corrupt the courts and there is no reason whatsoever that he should do so now when he is getting ready to leave office.
“The negative campaign and personalised attacks against the President by the opposition and all manner of commentators is unfair and unjust, as no court order at any level has been issued or directed at him.’’
As for the cashless system the CBN was determined to put in place, the Presidency claimed it is a known fact that many of the citizens who bear the brunt of the sufferings ‘’surprisingly support the policy as they believe that the action would cut corruption, fight terrorism, build an environment of honesty and reinforce the incorruptible leadership of the President.’’
“It is therefore wide off the mark to blame the President for the current controversy over the cash scarcity despite the Supreme Court judgment. The CBN has no reason not to comply with court orders on the excuse of waiting for directives from the President.
“President Buhari has also rejected the impression that he lacks compassion, saying that “no government in our recent history has introduced policies to help economically marginalized and vulnerable groups like the present administration,’’ the statement said.
Meanwhile, Governor Douye Diri of Bayelsa State has called on the Federal Government and the CBN to obey the Supreme Court ruling on the old naira notes in order to ameliorate the suffering occasioned by the cash crunch.
Diri said going by the March 3 judgment of the court, the old and new N200, N500 and N1,000 ought to circulate side by side till December 31 this year.
Diri made the call at the Government House, Yenagoa, on Monday, during an interactive meeting with the leadership of various unions and associations of transporters, traders and petroleum marketers in the state.
The leadership of the various unions and associations of petroleum marketers, transporters and traders at the meeting included the state chairmen of the Independent Petroleum Marketers Association of Nigeria, Mr Peter Erefamote, State Tricycle Owners Association, Mr Sani Moniru, and that of the National Road Transport Workers Union of Nigeria, Chief Erebo Oyinkuro.
Others were the former secretary of the Swali Market Traders Association, Mrs Fortune Samuel, and Mrs Christian Gwuembe of the Periwinkle Traders Association.
Abia State Government Bans Roasting Of Fish, Animals In Market
This article originally appeared
Worried by the fire incident of February 8, at line 27 off Ngwa road market, which affected two shops, the Abia State government has ordered immediate ban on roasting of fish and other animals as well as cooking within the major markets in the state.
It would be recalled that the fire was triggered as a result of a fish roaster’s stove that was left on after close of business.
A statement by the Commissioner for Trade and Investment, Chief John Okiyi Kalu, said the governor, Okezie Ikpeazu, has directed the ministry of trade and investment to evaluate the extent of damage to goods at the two affected shops with a view to supporting the concerned traders.
“While we thank God that the market authorities and other sympathizers were able to deploy available fire fighting equipment to quickly contain the fire, Governor Ikpeazu has directed the ministry of trade and investment to evaluate the extent of damage to goods at the two affected shops with a view to supporting the concerned traders.”
“We wish to encourage all market executives to fully implement the guidelines on fire protection within our markets, including ensuring that no flammable material is allowed to be stored within the market as well as effectively distribute fire extinguishers.”
BREAKING: Supreme Court Stops Old Naira Notes Deadline Implementation
The Supreme Court on Wednesday temporarily halted the move by the Federal Government through the Central Bank of Nigeria to ban the use of the old naira notes from February 10, 2023.
A seven-member panel led by Justice John Okoro halted the federal government plan in a ruling in an exparte application brought by three northern states of Kaduna, Kogi and Zamfara.
It was reported that the February 10 deadline for the currency swap announced by the Central Bank of Nigeria pitted Governors Nasir El-Rufai of Kaduna, Yahaya Bello (Kogi) and Bello Matawalle (Zamfara) against 14 political parties which threatened to boycott the February 25 election, should the CBN extend the time limit.
This is as a High Court of the Federal Capital Territory restrained the President, Major General Muhammadu Buhari (retd.), CBN, its Governor Godwin Emefiele and 27 commercial banks from suspending, stopping, extending or interfering with the currency swap terminal date.
The order was handed down on Monday by Justice E. Enenche following an application by four political parties.
That said, the three governors, who dragged the CBN and the Federal Government to the Supreme Court, were seeking a halt to the full implementation of the naira redesign policy initiated by the apex bank.
But, moving the application on Wednesday, counsel to the applicants, Mr A. I. Mustapha, SAN, urged the court to grant the application in the interest of justice and Nigerians.
He argued that the policy had led to an “excruciating situation that is almost leading to anarchy in the land”.
After careful consideration of the motion exparte in the application, Justice Okoro granted the prayer.
Ruling on the motion, Justice Okoro held that “An order of Interim Injunction restraining the federal government through the Central Bank of Nigeria (CBN) or the commercial banks from suspending or determining or ending on February 10, 2023, the time frame with which the now older version of the 200, 500 and 1,000 denomination of the naira may no longer be legal tender pending the hearing and determination of their motion on notice for an interlocutory injunction”.
He, however, adjourned to February 15, 2023, for a hearing of the main suit.