An outstanding 84.5% of Nigerians were negatively affected by the Central Bank of Nigeria’s Naira redesign policy. This was according to the report of a survey conducted by Africa-focused geopolitical research and strategic communications consulting firm, SB Morgen.
The report also revealed that the Nigerian youths were the worst-hit with 90.9% of respondents aged between 18 and 29 attesting to have been adversely affected by the cash squeeze. Overall, respondents between the ages of 18-49, representing the most-productive demography in the country were more devastated by the ruinous policy.
The CBN’s Naira redesign policy
It was not long ago that Nigeria and Nigerians were almost thrown into a state of anarchy by the Naira redesign policy of the federal government through the central bank of Nigeria (CBN). According to the government, the policy was to curb rising inflation, and prevent vote buying which was the major fear in the buildup to the 2023 general elections.
Other reasons were to reduce terrorism, reduce counterfeiting, and increase financial inclusion, which is laughable given that broadband penetration, which is a notable tool and index for enhancing financial inclusion is just about 48%, according to the NCC.
Nigerians were exchanging fists at every bank premises where queues were never-ending. Businesses were experiencing decline in sales and customers, banking halls and bankers were scaling fences to avoid lynching, and the country was on fire for a decision many termed as the obvious picture of a totalitarian and inefficient government, one which does not care about the masses.
The aftermath of that timeline has left the economy bleeding as the masses try to recoup all that was lost which included both material and financial gains. According to a report released by SB Morgen, based on a survey, a whopping 84.51% of Nigerians claimed that they were negatively affected by the Naira redesign policy of the CBN one way or the other.
Most notably, business owners and entrepreneurs claim that the policy not only hampered their business and distorted their growth, it also resulted in either layoffs or reduced productivity which were strategies employed to riggle out of the hardship laid on them by the FG.
Specifically, the percentage of those who said their enterprise was significantly impacted totalled 76.09%. A further 17.39% said their businesses were somewhat affected. Just about 6.52% said their ventures were not affected at all.
One very troubling reveal was that a staggering 91.67% and 100% of income earners earning monthly incomes of between ₦250,000 and ₦500,000, as well as those grossing below ₦100,000, were the most affected by the cash shortage.
The fact that all 6 geopolitical zones (apart from the Northeast) recorded a significant percentage of the policy’s negative effects was a clear sign of its failure as a financial inclusion policy. In the North Central, all respondents (100%) insisted that both they and their businesses had been significantly impacted.
Others are the North West (81.82%), South East (90%) and South West (94%), as well as the South-South which the study claims to be the lowest in the regions where the survey was performed but did not include the statistic.
Read also: All you need to know about the Naira redesign policy and CBN’s promise to sanction PoS operators
A government’s failure in numbers
Perhaps, Nigerians have the bold governors to thank for the redemption at last, but for them, the country was clearly headed towards increased poverty and an institutional failure born from the neglect of the recognisable loopholes that came with the policy implementation.
Apart from the obvious lack of infrastructure to spearhead a cashless economy supposing the curbing of excess naira in circulation was the argument for the policy, a lack of monitoring and assessment, non-consideration of public opinion and inefficient time span for policy introduction, which naturally ought to be the due process of policy implementation, were some of the many glaring lapses.
In the report released by SBM, which is an intelligence organisation that addresses the critical need for political, social, economic and market data, and big data analytics, households were also at the receiving end of the policy.
This is followed by the five-person household, which comprises 21.13% of the respondents, closely following the six-person household representing 19.72% of persons interviewed. After this is the household of three, comprising 18.31% of respondents; next is the two-person household, which adds up to 11.27% of interviewees.
According to KPMG, “although the National Bureau of Statistics recorded an increase in the national unemployment rate from 23.1per cent in 2018 to 33.3per cent in 2020. they estimate that this rate has increased to 37.7per cent in 2022 and will rise further to 40.6 per cent in 2023.”
In an economy where the unemployment rate is steadily rising, imagine the effect of also having no cash at hand. The report by SBM shows that of the respondents interviewed by employment status, 52.11% are employed, while those who are entrepreneurs, traders or self-employed are 36.62%. Just one respondent, representing 1.41% of those surveyed, is retired. The student population of the survey is 5.63%, while 4.23% are unemployed.
For a total breakdown of the naira redesign policy on Nigerians by location, the statistics showed that the southeast location of Anambra and one of the south-south locations of Cross River recorded surprising outcomes in the access-to-cash question. 80% of Anambra respondents said they did not have access to cash during the scarcity.
In South South, 42.86% of respondents could not access naira notes during the scarcity, as opposed to 57.14% who did. In North Central, 80% of them could access naira notes, even though it came at increased costs. Just as it happened across the country, PoS operators were selling naira to willing buyers as high as a quarter of the value they needed.
Did the Naira redesign policy fail?
If this writer was asked this question repeatedly, the answer would definitely not change. It is obvious that the policy was rushed into by the federal government to checkmate political cronies and assumptions, and did not consider the economic impact.
It is even sadder that Nigerians were the pawn in a game of political chess. In the end, both the intended but not stated purpose of the policy was not achieved and the stated was also not achieved.
In answering this question, the reports mention that the 84.51% of Nigerians who responded that the policy affected them negatively, noted that it didn’t improve financial inclusion. When asked if the delayed naira swap was done to improve financial inclusion and help Nigerians, 72.86% said it made life difficult for them.
About 27.14% of the respondents said they believe the policy was designed for a positive outcome, while 78.95% said there was no infrastructure to execute it properly. The other 21.05% said more time is needed for the implementation.
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