Following the report released by the Manufacturers Association of Nigeria (MAN), which indicates that the recent naira redesign policy of the Central Bank of Nigeria (CBN) resulting in currency scarcity, will create a drop in employment rate in the production sector in the first quarter of 2023, experts have expressed concern that the policy will deepen Nigeria’s unemployment crisis.
The policy announced late last year unleashed cash scarcity that has impacted businesses across Nigeria, with the informal sector bearing much of the brunt. With businesses still struggling to find a way around the chaos, MAN’s Confidence Index Report says the employment rate would dip below benchmark points to 48.8 points in the first quarter of 2023.
In a bid to curtail money laundering, vote-buying, illicit fund and terrorism financing, the central bank, backed the federal government, had set February 10 deadline to phase out the old N200, N500 and N1,000 notes. The implementation of the deadline has limited economic activities due to insufficient circulation of the redesign naira notes.
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Gbolade Idakolo, a financial expert who spoke with Daily Post, said the situation will build on other unfavorable economic issues to compound Nigeria’s unemployment crisis.
“The unemployment rate presently is on the rise due to several factors including but not limited to foreign exchange scarcity and rate, energy crises, the rising cost of goods and services, poverty induced low purchasing power, high-interest rates and insecurity, etc.
“These factors have limited business productivity and profitability, leading to job losses in 2022,” he said.
“There is every likelihood that the addition of the Naira crises will further lead to economic losses directly affecting labour, which will further increase the percentage of unemployed Nigerians,” he added.
“These signs are prevalent, and it is evident in the present Naira crisis that, if not properly handled, could lead to further job losses.”
President Muhammadu Buhari, has on Sunday, appealed to Nigerians once again to be patient as the policy implementation unfolds. Earlier in his national broadcast on Thursday, Buhari had said that the policy, if fully implemented, will bring a lot of economic benefits to Nigeria.
“I am fully aware of the current hardship being faced as a result of some policies meant to bring overall improvement to the country. I’m appealing to you to exercise further patience as we take measures to ease these hardships. God willing, there is light at the end of the tunnel,” he said on Sunday.
The president said part of the reasons for the introduction of the policy is to minimize huge sums of cash in circulation as a result of illicit funds stockpiled by corrupt individuals outside banks’ vaults.
But Dr Ayo Teriba, the CEO of Economic Associates, EA, told Daily Post that the reasons don’t justify the amount of hardship the policy has brought upon Nigerians.
“Needless Naira Redesign policy, it leads to nowhere. Needless because who needs you to change the color of the naira? What benefit is the policy? It is cosmetics.
“People cannot access their money; the people protesting in banks are kidnappers, insurgents, bandits or vote buyers. You cannot say because you want to catch a thousand bandits or politicians and you will now expose 200 million Nigerians to hardship”, he stated.
As the old notes ceased to be legal tender following the expiration of the February 10 deadline, Buhari directed the CBN to allow N200 notes to co-circulate with the redesign notes in a bid ameliorate the hardship the currency scarcity caused. However, experts believe the adjustment is insignificant to the damage the policy has brought upon Nigerian labor market.