• Business - Economy
  • Updated: March 19, 2023

Expert Urges CBN To Address Continued Cash Scarcity

Expert Urges CBN To Address Continued Cash Scarcity

A financial expert named Muktar Muhammed has urged the Central Bank of Nigeria (CBN) to take urgent steps to address the continued shortage of naira notes.

Muhammed, also an investment banker made the call on Sunday in Abuja when he spoke with the News Agency of Nigeria (NAN).

According to him, the inadequate circulation of the new notes is also an indication that the Nigeria Security Printing and Minting Company (NSPMC) has limited capacity to produce the required quantity of currency notes.

“The CBN was not ready to obey the Supreme Court order until the presidency made a pronouncement.

“Even after that, the circulation is inadequate and we see more of the old notes than the new ones.

“This implies that the NSPMC lacks the capacity to print the required quantity of naira notes within a specified period,’’ he said.

Muhammed added that though the naira redesign policy has enormous economic advantages, its lacklustre implementation makes it problematic.

The expert said that the fact that the policy was driven by some other factors that are not strictly economic also created problems.

“The policy had to do with fighting inflation. One of the tools to fight inflation is to mop up liquidity.

“It is a good policy but poorly implemented because we did not take into consideration the Nigerian factor.

“It was not driven entirely by economic considerations.

“We had to contend with political considerations as it relates to vote-buying and we had the security consideration,’’ he explained.

Muhammed said that the policy had done great harm to the informal sector of the economy which is the driver of the economy and which mainly does cash transactions.

“That sector suffered during this period because of the scarcity of cash, and even the digital platforms that were created did not have the capacity to handle a lot of transactions from the informal sector.

“The CBN should have collaborated with the Bankers Committee to build a strong infrastructure that can accommodate the cashless policy and the naira redesign robustly.

“They should have come together to build the Nigeria Interbank Settlement that would make digital transactions seamless for Nigerians,’’ he stressed.

Muhammed noted also that many Nigerian youths had become jobless because of the naira redesign policy and the scarcity of naira notes.

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