Naira Redesign Policy Crumbling Businesses, Stakeholders in Economy Sector Cry Out

Various stakeholders in the Nigerian economy have lamented over the debilitating impact the Naira Redesign Policy of the Central Bank of Nigeria (CBN) has been having on businesses.

These business men and women in the private sector bemoaned the shortage of the redesigned currency, saying that the economy has been grounded.

Among the affected stakeholders are the Lagos Chamber of Commerce and Industry, the Nigerian Employers Consultative Forum, the Nigerian Economy Summit Group, the Nigerian Association of Small and Medium Enterprises and the Nigerian Association of Small-Scale Industrialists.

Owing to challenges in online transactions, non-availability of new notes at banks and lack of financial institutions in most rural communities in the country, the organised private sector said most SMEs are shutting down while only a few are still surviving the harsh economic realities.

They wished that the directive for the circulation of N200 old notes would ameliorate the suffering of getting cash, stressing that all is not well with the nation’s economy.

For the Director-General of the Nigeria Employers Consultative Association, Wale Oyerinde, the naira redesign policy has created massive disruptions in the flow of transactions, adding even the electronic payment channels expected to curtail the situation failed under pressure.

The Nigerian Economic Summit Group also noted that the naira redesign policy was beginning to take a toll on Nigeria as the economy suffered from a significant decline in the volume and value of cash in circulation.

The NESG further stated that the cash crunch had had adverse effects on households, informal businesses and formal businesses, particularly the Nano, Micro, Small and Medium Enterprises, which are the backbone of the private sector-driven economy.

A report made available by the group showed that long and unending queues are now common at banks as people often try unsuccessfully to withdraw cash, adding that time spent attempting to obtain new notes disrupts economic activities; makes it significantly difficult for people to engage in daily activities, as commuting becomes difficult or even impossible when cash is not in hand and when economic agents are not receptive to e-payment/bank transfers.

The group also noted that the failure of deposit money banks to meet the growing demands for cash suggests that the banking system, given the existing technology, was unprepared for a sudden transition from the old naira notes to the new ones or a cashless economy.

Expressing worry that the Gross Domestic Product for the first quarter of the year would be significantly impacted as businesses have been unable to operate at optimal levels due to the naira scarcity that has forced down consumer spending power, the Deputy-President of the Lagos Chamber of Commerce, Idahosa, said the cash crunch is already having a short-term impact on the economy.

Also lamenting the naira crisis, the Chairman of the Nigerian Association of Small and Medium Enterprises, Lagos State Chapter, Dr Adams Adebayo, said it was worrisome that the naira chaos had grounded the economy, adding that the situation had had a serious negative impact on SMEs.

Adebayo noted that Micro, Small and Medium Enterprises are the worst hit by the CBN naira redesign policy which he described as “unpopular.” He noted that prices of goods have gone up and the ease of doing business is not close to entrepreneurs.

He advised the Federal Government to look beyond the politics of the naira redesign and focus on the damaging effects on businesses and the economy at large. For him, the value chain in the formal and informal sectors with over N5bn cash transactions daily is almost destroyed with consequences for employment, business sustainability and national development.

The SMEs guru described as very unfortunate, the much attention placed on the politics of the naira redesign while the federal government and the apex bank pretend as if all is well with the economy. On the contrary, he said businesses have been damaged by paucity of cash.

Investors King had reported how business owners have complained bitterly of low sales since the policy started.

Checks revealed that owing to the lack of cash, Nigerians no longer buy things as they used to while others restrain from making online transfer in order not to be caught up in the technical hitches that banks are battling with.

Analysts have said that most Nigerians might begin to hoard money because of any eventuality that may arise during or after the forthcoming general elections.

They argued that should any political crisis should envelope the country, the challenges of the masse would double, hence, the conservative method most citizens have been applying.