Instead of phasing out, a new denomination of N5,000 should be issued out — NACCIMA

By Omolola Dede Adeyanju

The Director General, Nigerian Association of Chambers of Commerce, Industry, Mine and Agriculture (NACCIMA), Sola Obadimu has enumerated the chamber’s view of the country’s current situation.

In his words, “The issues of naira scarcity is for CBN Governor to rectify, he can’t be getting the reward of office and not do the responsibilities of the office. The three go together; when you get the recognition and rewards of office you should take charge of the responsibilities. You can’t be enjoying the rewards of office and not take up your responsibilities. The Governor is highly rewarded but he can’t do a simple job he is expected to do.

“Honestly, this money-changing exercise has been largely disruptive to the economy, needlessly. The management of the currency exchange exercise could certainly be better. The past few weeks have been quite traumatic for a lot of Nigerian citizens and small businesses particularly – coupled with the fuel issue. This week, for instance, a lot of ATM Machines in both Lagos and Abuja had no cash – including at the Airports. This is not decent enough. And, given this development, whatever is happening in the rural areas is better imagined

“Though we appreciate and commend CBN for the 10 days extension but, in going forward, CBN should try to be more proactive than reactive. Secondly, they are advised to consult more widely with stakeholders before taking crucial decisions that are likely to affect people’s lives and businesses, particularly the private sector.

“Personally, I wish the CBN Governor would pay more attention to basic CBN management issues and monetary policy guidelines. The INEC Chairman should worry more about electoral matters. There are more important CBN/monetary policy related issues begging for urgent attention – widening gap in interest rates (between lending and savings) unhealthy gap in forex rates (between official & parallel), soaring inflation rates, etc. When we are responsible for discharging the elements of our assignment as a public official, we should be careful of losing focus.

“I don’t think we should shut down the economy because of pending elections. Imagine a visitor coming into Nigeria for the first time and, on arrival at the Airport, couldn’t withdraw any money from any ATM Machine in either Lagos or Abuja, what kind of investment-friendly rating would he give us? I understand some rating agencies have recently downgraded us, including Moody given recent developments. We should be concerned about investment related ratings.

“Again, we must be careful lest we lose focus in discharging our various duties as public officials. The common man on the streets and busineses must be put into consideration at all times. Businesses keep people in employment and also pay taxes. We mustn’t forget that! Rather than punish everyone because you want to discourage vote-trading, why can’t we seek to deal with issues that have kept the masses perpetually impoverished over the years? If people are adequately economically empowered, why would monies distributed on election days be attractive to them.

“Unfortunately, bad government economic policies over the years have impoverished people and disabled them economically thereby turning the masses into beggars. Let’s deal with the basic issues include massive concentration in improvement of infrastructure, particularly power supply. If people are constructively engaged, they wouldn’t be waiting for 4 years to collect N5,000 only (or even less) from politicians at election times!

“The facts are that the Nigerian economy remains significantly cash transactions-based and most small businesses depend almost entirely on cash-based transactions. It is therefore necessary to advise that enough notes are issued to effectively go around to adquately and sufficiently replace the old notes by the new deadline date of 10th February 2023. In other words, by now, we would have expected all Banking halls and ATMs to effectively issue out only the notes exclusively, while mopping up the old notes

“Also, while creating and maintaning a cashless economy is highly desirable and progressive – particularly with the advantageous ability to track transactions (with particular reference to criminal and money laundering activities, etc), all over the world, cash-based transactions remain an option – but never the only option. This applies even in advanced countries where the infrastructure is more robust and reliable.

“The CBN should not be rationing cash. In fact, it behoves on the CBN to ensure that there is enough cash in circulation for people’s needs. Cash in circulation is not equal to available money and it remains, at most, just about 6 per cent of available money in circulation as most monies are stored up in banks and other electronic systems.

“We have seen that rationing cash can neither control inflation nor make the currency stronger. The US dollar currency notes are available globally. That has never weakened the dollar, neither has it contributed to inflation in the United States. Same goes for other convertible currencies (including the GB Pounds Sterling, Euro, etc) that are available all over the world.

“Our infrastructure remains weak and electronic transaction systems are still largely unreliable. Whenever the system malfunctions (daily, people’s accounts get debited despite recording declined or failed transactions), it takes the banking system between 2 to 3 weeks at times to reverse and refund these accounts. Most ordinary people on the streets cannot bear this sort of delay.

“Therefore, there is a need to ensure that the infrastructure is strengthened and the electronic banking system is more reliable. Currently, we have an environmental of mistrust and delayed transactions which is hugely frustrating, unreliable and unacceptable.

“Besides, due to the inadequacies of cash service of the banking system, a lot of PoS transaction points/outlets have sprung up, creating jobs directly or indirectly for millions of people. Whatever policies that are issued should not have any negative effects on these people’s source of livelihood.

“As a matter of fact, as I have always maintained, I believe, rather than issuing new N1,000, N500 and N200 notes, just a new denomination of N5,000 should have been issued out. This would have helped to achieve the same set of objectives that CBN craves for as: those who have stored up old N1,000, N500 and N200 notes would definitely have brought them out to change for the new N5,000 notes as, being a higher denomination, it would be less burdensome and more convenient to carry.

“It is not nice for our sovereignty and our economy that our highest currency denomination is just $2 or less in equivalent value. This is unacceptable and greatly inconvenient as credible store of value.

“Less number of currency notes would have been required to be printed, again, being a higher denomination and store of value. Thereby, less funds would have been required to be spent.

“Therefore, there’s no doubt at all that this is to be considered sometime in the bear future.”

The DG added, “Going forward, it is necessary to urge the CBN, government and all policy makers to always engage in adequate consultations with the private sectors as well as ordinary Nigerians before announcing and/or implementing any policy that are likely to significantly impact on businesses as well as the lives of the general public. This will help government and all policy makers feel the pulse of the nation first and make policies that will further enhance improved welfare of the citizenry.”