Naira Notes Scarcity having Negative Economic Impact

The Current Scarcity of New Naira notes and the Old Notes is having a negative impact on the Nations’ Economy and has affected Consumer Spending.

Deputy President of the Lagos Chamber of Commerce and Industry, Mr Gabriel Idahosa, disclosed this while speaking to Tolulope Ogunjobi on TVC News Business Nigeria on Tuesday Morning.

Mr Idahosa said the challenges faced by Nigerians in accessing cash has ensured that products they will normally buy with a small amount of money without recourse to Transfers are now lying idle holding down money that could be put to productive use by the Manufacturers across the Country.

He said that sales of goods are now coming down and that members are concerned about the trend and how quickly it can be ended.

He said the issue does not affect only major manufacturers but also roadside traders across the length and Breadth of the Country who sell to consumers on a daily basis but cannot make sales due to the non availability of cash to do so.

He said the Fast Consumer Moving Goods segment of the Economy is particularly badly affected.

On whether the country can afford what is essentially a Cash Crunch, Mr Idahosa said the issue is not a case of Cash Crunch but a system failure on the part of the Central Bank of Nigeria and not a reflection of the ability of the average individual to spend money on items in Nigeria.

He called on the Central Bank of Nigeria top come up with emergency measures that will help in addressing the situation.

On the reported behaviour of many Nigerians especially bankers, PoS operators and Others in the financial Sector who have access to cash which is scarce, he said it is just a reflection of what happens in any society or situation where an acute shortage happens whether it is of cash or any other commodity.

He added that it will be unusual for people who now have a power of life and death they never had before over people not to abuse it.

He said the current purchasing power of many Nigerians is Zero now with no access to cash to fund their day to day activities grounding everything to a halt.

Going Further, He said the current situation negates the concept of Economic Activities which is the exchange of goods and Services with Money exchanging hands for such activity.

On if the Digital Infrastructure in Nigeria can accommodate the cashless policy of the Central Bank of Nigeria, he said the situation is not so cut and dried or black and white like most people are making it look like.

He disclosed that in most countries where a cashless policy is in place, a significant amount of transaction are still done with cash.

According to him, their are just two countries in the World that are almost at point Zero in terms of going cashless.

He said the way the Central Bank of Nigeria handles the current crisis will make all the difference.

He also said the situation also exposes the failure of the Central Bank to plan properly for the implementation of the policy.

He added that building up of Infrastructure was not put into consideration especially with most Nigerians now experiencing challenges while trying to use Digital platforms for their transactions.

He added that the surge in the use of Digital platforms should have been envisaged by the Central Bank of Nigeria with many Nigerians including street traders now making use Digital platforms and accepting transfers to accounts for their daily activities.

He however said the extension of the deadline is not what is required but a massive expansion of the distribution of the new notes.