The World Bank has cautioned that the newly redesigned naira, which entered circulation last week, may have a detrimental impact on economic activity, particularly among Nigeria’s poor, due to its timing and brief transition period.Information Guide Nigeria
This was disclosed by the Washington-based bank in a new study titled “Nigeria Development Update.”
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Live, Study and Work in Canada. No Payment is Required! Hurry Now click here to Apply >> Immigrate to CanadaThis occurred amidst the conflicting reactions to the freshly redesigned banknotes.
The Central Bank of Nigeria revealed new N1,000, N500, and N200 banknotes last month as part of efforts to eliminate excess currency in circulation, ransom payments for kidnapping, financing of terrorism, and counterfeiting, among other crimes.
In its analysis, the World Bank stated that the new policy will significantly impact small firms, particularly those that do daily cash transactions.
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The report read in part, “While periodic currency redesigns are normal internationally and the naira does appear to be due for it since naira notes have been redesigned for two decades, the timing of and short transition period for this demonetization may have negative impacts on economic activity, in particular for the poorest households.NYSC portal
“International experience suggests that rapid demonetizations can generate significant short-term costs, with small-scale businesses, and poor and vulnerable households, potentially being particularly affected due to being liquidity-constrained and heavily reliant on day-to-day cash transactions.
“At present, households and firms already face elevated financial pressures from prolonged, high inflation, recently compounded by external food and fuel price shocks, and the severe floods, and phasing out existing naira notes over a short time period may add to their challenges.”JAMB portal
The President of the Bank Customers Association of Nigeria, Dr Uju Ogunbunka, had also said the objectives of the cashless policy was understandable but noted that the execution and timing were not right.
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Live, Study and Work in Canada. No Payment is Required! Hurry Now click here to Apply >> Immigrate to CanadaHe said, “From the cashless policy point of view, we should appreciate that, as much as possible, the government is trying to limit the use of cash for transactions, more so, now that they are redesigning the currency. “The second thing is that the government wants to drive the use of online banking, which is good for our economy. Unfortunately, there have been so many complaints about failed transactions.”
“There is hardly any week without complaints in the banking hall. You will see people shouting with regard to transfer failures. Have we put enough structure to take care of some of these things? The answer is, we are yet to, we are making progress, yes, but we should give enough room and time for some of these things to play out rather than short-circuit the system.”JAMB Result
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