On Friday, President Muhammadu Buhari said he would make a “major decision” on the scarcity of Naira notes in Nigeria.
His first decision was to approve the extension of the initial January 31 deadline for swapping of old notes by 10 days.
Buhari promised Nigerians that the remaining seven days of the 10-day extension will be used to crack down on the encumbrances mitigating the successful implementation of the currency redesign policy.
“I will revert to the Central Bank of Nigeria (CBN) and the Minting Company.
“There will be a decision one way or the other in the remaining seven days of the 10-day extension,” the President said on Friday.
What could Buhari possibly do? Amara Nwankpa, the Director, Public Policy Initiative at The Yar’Adua Foundation shares useful tips.
“They need to make sure there is a lot of Naira supply. There needs to be an over-supply of the Naira. They need to match the demand for physical cash across boards – ATMs, over-the-counter, etc.
“If they can’t match that, then this problem is only going to get worse. And those who are going to be affected are the underserved customers and people on the wrong end of the spectrum. The poorest people and the women,” Nwankpa told DAILY POST.
“Either they match the demand for the new Naira notes or they push back the old notes and suspend the policy for now, allowing both new and old notes to co-exist,” he added.
Buhari’s vow came following a meeting with governors of the All Progressives Congress (APC).
Asked if these could have political undertones, Nwankpa said: “I don’t know. I don’t want to speculate. Even though it coincides with the political season and we know how cash is important in this season, the Central Bank and authorities have stated that this is in pursuit of the cashless policy.
“It, however, inhibits politicians from using cash to induce voters and their supporters.
“So clearly, even if the purpose is not political, it will have significant political effect.”
“But my biggest concern would be how it is affecting the economy at large. And as you are aware, Nigeria has a huge population of unbanked people. A lot of transactions are cash-based.
“Policies can either create pressure or shocks to the system. This policy presents itself as a shock to the system currently. So there is a lot of delay. And you find out that bank apps are crashing. Transfers are not going through, or taking longer to complete. This is because the system is being burdened.
“This is why there’s a lot of anger. And people are planning to riot and all that. It is because of this shock. The systems are not designed to take this level of shock,” Nwankpa added.