A recent report by research firm SBM Intelligence revealed that 84.51% of Nigerians were affected by the Central Bank’s naira redesign policy which led to a cash crunch in the country.
The report which was titled “Strapped: Impact of the Cash Scarcity on Individuals and Businesses”, highlighted the impacts of the naira redesign policy and how it affected Nigerian citizens.
The report revealed that 38.03% of people interviewed fell between the age bracket of 40-49, followed by the 30-39 age range, which comprised 36.62% of those interviewed. The age category represented in the survey was those who were 50 and older, at 9.86%, while the youngest age bracket is 18-29, comprising 15.49% of people surveyed.
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From the total number of people interviewed, 84.51% revealed that the CBN’s naira redesign policy impacted them, while 15.49% of people said they were indifferent or not affected.
Following the scarcity of cash, Nigeria’s agricultural sector suffered from depressed spending, which affected farmers’ ability to pay for labor and resulted in reduced production. Also, trade volumes were negatively impacted as most transactions in rural areas and the country’s informal sector are cash-based.
To deal with the scarcity, traders resorted to reducing the value of their produce. Some sellers offered discounts to customers paying with cash, whilst increasing the price for those paying with transfers. Livestock sellers, including those who use CFA francs, preferred naira notes to bank transfers. In some states like Benue, traders bartered their goods to meet their needs. Some sellers had to swap their products for reduced value to get much-desired produce in return.
In the area of transportation and feeding, the impact of cash shortage was heavily felt, as most transportation workers had to resort to the use of PoS machines to ease payment for their passengers. Food vendors slashed prices and battered their goods to obtain other essentials.
SBM report revealed that employed Nigerians affected by the cash shortage were 78.38%. Those who were entrepreneurs, traders, or self-employed overwhelmingly reported being affected by the cash crunch were 96.15%. Meanwhile, 13.51% of the employed class said they were unperturbed by the cash squeeze.
The 18-29 age bracket were the least who were able to access cash, with 45.5% of them unable to get the naira, during the federal government botched currency swap, followed by those aged 30-39 with 34.62% of them failing to access the naira.
With one-quarter of the activities contributing to the size of the economy in rural areas, much of the Nigerian trade volume, largely cash-based also takes place in these places. Following the shortage of cash to fuel transactions, electricity, transportation, and logistical costs, Nigerian manufacturers were forced to produce less and hold a high stock of unsold goods.
The CBN’s flawed attempt to introduce new banknotes within a short time devastated businesses and individuals, meanwhile, the policy failed to achieve its stated goals of curbing money laundering, accelerating electronic payments adoption, and abating inflation. This was reflective not only of the institutional shortcomings of the regulator and the government printing company but also of the fundamental
the flaw in the design and implementation of the policy.
Few experts in the country have disclosed that whatever may have been the benefits of the naira redesign policy have been canceled out by the economic and social waste and gridlock it has created, noting that Nigerians are still suffering from it, after the presidential election has come and gone.