…Buhari appeals for further patience
…NESG wants old currency notes circulate side-by-side with new notes for now
In the midst of the current crisis in respect of Naira redesign notes, the Chartered Institute of Bankers of Nigeria is liaising with the Body of Banks CEOs to address the current challenges. As such, the banks would continue to remain open to serve the public as long as it is safe to do so.
Ken Opara, President/Chairman of Council, CIBN in press statement signed by him, stated that the safety and security of staff of banks is of paramount importance. Hence, where there is security challenge, the management of banks have been empowered to take proactive measures to close operations in such location and inform the Central Bank of Nigeria. Therefore, the safety concerns being expressed in various quarters are already being addressed.
“Banks will continue to ensure that adequate security are in place to protect staff and customers whilst safeguarding the assets of the banks in contending with the current challenge.
Consequently, we appeal to the general public to remain calm and eschew any act of violence as the banking industry remain resolute and committed to finding ways to address all the related issues.”
“We indeed appreciate you for your continued patience and understanding as we work together towards restoring normalcy,” he stated.
The Nigeria Economic Summit Group (NESG) has advised the Central Bank of Nigeria (CBN) to adapt a gradual phasing out of the old naira currencies by prolonging their legal tender usage side-by-side with the new notes.
Meanwhile, President Muhammadu Buhari has appealed to Nigerians to remain patient as his administration takes appropriate action to mitigate the hardships occasioned by the controversial naira swap policy.
The policy described by some as hasty was designed by the Central Bank of Nigeria (CBN) to limit cash hoarding and vote-buying ahead of the general elections but has since given rise to naira scarcity and violent protests across the country.
According to a statement by the President’s Senior Special Assistant on Media and Publicity, Garba Shehu, Buhari made the plea on Sunday in a video recording to shore up support for the presidential candidate of the All Progressives Congress (APC), Bola Tinubu.
The President thanked Nigerians for electing him to be President for two terms, and urged them to vote for the APC standard bearer, describing his desired successor as “reliable” and sure to “build on our achievements.”
“I want to once again assure you that I am fully aware of the current hardship you are facing as a result of some policies of the government which are meant to bring overall improvement to the country.
“I am appealing to you to exercise further patience as we take appropriate measures to ease these hardships. God willing, there will be light at the end of the tunnel.”
In related development, the Nigeria Economic Summit Group (NESG) has said that the CBN should allow the old notes should be allowed to circulate side-by-side with new notes for now.
NESG which gave the advice in a report titled, “Naira Redesign Policy: Caught in the Web,” noted that this would stave off further adverse socio-economic effects the implementation of the current naira redesign policy was having on the economy and to restore confidence in the country’s financial system.
It, however, warned that prolonging the cash scarcity associated with the currency redesign policy would likely motivate a slowdown in Nigeria’s economic growth as many productive activities might have been halted due to the inability to access cash, especially the informal sector that runs primarily on cash and controlled about 65 percent of Nigeria’s GDP.
The report stated: “As laudable as the aims of the CBN were in its decision to redesign the currency, the evidence is that there has been a myriad of unintended challenges, which have been significantly disruptive to economic activity and negatively affected the welfare of citizens. Urgent redress is, therefore, required to stave off further adverse socio-economic effects and to restore confidence in the financial system.”
The NESG recommended that due to the hardship households and businesses were facing, especially in the informal sector, “the CBN needs to reconsider prolonging the legal tender usage of the old notes side-by-side with the new notes. This is important to give the CBN the opportunity and time to devise effective ways of getting the new note to the unbanked populace and rural dwellers that constitute a large portion of the informal economy. As such, a gradual phasing out of the old note is advised.”
It added that the CBN should, “expedite the printing of new notes and streamline their distribution channels to ensure efficient delivery of the new notes to commercial banks and other financial institutions. This will help ensure an adequate supply of cash to meet the public’s demand and reduce long queues and other inconveniences.”
The NESG also urged the CBN to, “launch a public sensitisation campaign to educate the public on the need for new notes and the reasons behind the delayed printing process or scarcity of cash. This will help prevent negative vested interest narratives and misinformation resulting from an inadequate supply of cash. The campaign should emphasise the objectives and benefits of currency redesign.”
It also emphasised the, “urgent need to expand the capacity of the digital financial system to accommodate the mass migration to digital channels. This is important to ensure a seamless transition to digital channels as alternatives to cash. The difficulty experienced by people attempting to use digital channels for transactions suggests that payment platforms are not adequately mature to adjust quickly to a cashless economy.”
The NESG noted that the naira redesign policy, alongside other policies that have had unintended consequences, would continue to dampen investors’ confidence in Nigeria.
“Policies such as this further compound the level of uncertainty in the economy, which disincentivises investors from committing their funds to the Nigerian economy.
“With nearly 40 per cent of the adult population being excluded from the financial system, the challenges emanating from the cash crunch following the redesign will amplify the trust deficit in the financial system.
“Hence, many more people will resort to stacking up cash. This will be against the cashless policy agenda of the CBN and will defeat the essence of the Naira redesign policy,” the group warned.
