Expert Lists 5 Things CBN Missed When Introducing New Naira Notes and Cashless Policy
- CBN's naira redesign and cashless policies have received quite a number of backlash in the last few weeks.
- The policies have attracted protests across many cities in Nigeria as customers are unable to have access to cash.
- As a result of the ongoing chaos, an economic analyst has given his two cents on what the CBN ought to have done before initiating the policies.
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The CBN's move to redesign some denominations of Nigeria's currency and to fully go cashless has generated mixed reactions amongst Nigerians. For the most part, the reactions have been more negative than positive following the terrible experiences of the last few weeks which arose out of a scarcity of new naira notes.
The new naira notes have been very scarce as customers besiege banks and ATM points daily in efforts to withdraw cash. Most have been unsuccessful as banks claim they have run out of cash despite the CBN claiming to distribute cash in millions of nairas to the banks on a daily.
Source: UGC
Taiwo Oyedele, a Fiscal Policy Partner and Africa Tax Leader at PriceWaterCooper (PwC), highlights some of the things the CBN should have considered at the point of initiating the policies.
Sharing his thoughts in a Twitter thread on Saturday, February 11, 2022, Oyedele said even the best of policies will fail without critical thinking in the design and robust planning for implementation no matter how well-intentioned.
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He added that the CBN should have thought about what could go wrong under different scenarios and plan its responses ahead.
What CBN should have considered ahead of currency redesign and cashless policy
1. Impact on the economy: Monetary authorities should consider the potential impact on the economy of introducing a currency redesign or cashless policy. This includes assessing the potential effects on inflation, economic growth, employment, and consumer spending.
2. Security: Monetary authorities should consider the security implications of a currency redesign or cashless policy. This includes assessing the potential for counterfeiting, money laundering, and other financial crimes.
3. Accessibility: Consider potential impact on access to financial services of a currency redesign or cashless policy. This includes assessing the potential effects on vulnerable & low-income population, as well as those who lack access to bank accounts or digital payment systems
4. Cost: Monetary authorities should consider the potential cost implications of a currency redesign or cashless policy. This includes assessing the costs of printing new currency, implementing new payment systems, and educating the public about the changes.
5. Public opinion: Monetary authorities should consider the public's opinion on a currency redesign or cashless policy. This includes assessing the potential for public backlash or confusion due to the changes.
Nigerians frustrated as CBN's naira policies cause scarcity across Nigeria
CBN's move to recall old naira notes in exchange for the newly redesigned naira notes and enforcement of a cashless policy has brought extreme hardship on Nigerians due to the scarcity of the currency.
Everyday, thousands of customers besiege various banks and ATM points to make withdrawals only to be confronted with the fact that naira has become scarce and the banks do not have enough to dispense to all customers.
The scarcity has caused a lot of frustration amongst Nigerians, resulting in protests and vandalisation of bank properties in cities like Ibadan, Abeokuta and Benin.
While the protests were ongoing, videos emerged of customers stripping inside banking halls demanding for their money. Customers are fighting each other and also fighting bank staff. Many ATM points have been converted to temporary sleeping camps by some customers.
Unfortunately, bank app transactions in recent times have become more strenuous and unreliable, probably because of an increase in the volume of transactions since cash became scarce.
PoS operators who could have served as alternatives are also dealing with a shortage of cash. Most do not even have cash to give out, and the few who manage to get a hold of a little cash have turned 'overnight celebrities' and are charging as much as N1000 extra for a N5000 withdrawal.
Source: Legit.ng
