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By Chima Nwokoji | Lagos
In its latest report titled, “Naira redesign policy: Caught in the web,” the Nigeria Economic Summit Group (NESG) has recommended a number of action points in the implementation of the naira redesign policy of the Central Bank of Nigeria (CBN).
The report noted that as laudable as the aims of the CBN were in its decision to redesign the currency, there were evidences indicating that there has been a myriad of unintended challenges which have been significantly disruptive to economic activities and negatively affected the welfare of citizens.
NESG therefore, believes that urgent redress is required to stave off further adverse socio-economic effects and to restore confidence in the financial system.
It recommends adoption of gradual phase-out of old notes. According to the group, due to the hardship households and businesses face, especially in the informal sector, the CBN needs to reconsider prolonging the legal tender usage of the old notes side-by-side the new notes.
It said this is important to give the CBN the opportunity and time to devise effective ways of getting the new note to the unbanked populace and rural dwellers that constitute a large portion of the informal economy.
Additionally, the apex bank should streamline distribution channels to ensure efficient delivery of the new notes to commercial banks and other financial institutions.
This will help ensure an adequate supply of cash to meet the public’s demand and reduce long queues and other inconveniences. NESG further suggests that CBN should intensify public sensitisation by launching a public campaign to educate the public on the need for new notes and the reasons behind the delayed printing process or scarcity of cash.
This, it said, will help prevent negative vested interest narratives and misinformation resulting from an inadequate supply of cash.
“The campaign should emphasise the objectives and benefits of currency redesign. Also, there should be incentives to promote the use of digital channels, such as a reduction of charges on transactions associated with digital channels.”
“There is an urgent need to expand the capacity of the digital financial system to accommodate the mass migration to digital channels. This is important to ensure a seamless transition to digital channels as alternatives to cash.
The difficulty experienced by people attempting to use digital channels for transactions suggests that payment platforms are not adequately mature to adjust quickly to a cashless economy,” the NESG noted.
It should be recalled that the CBN had on Friday denied directing banks to collect old N500 and N1,000 notes from members of the public.
Nigerian Tribune earlier reported that banks issued notice to their customers informing them to commence deposit of old naira notes up to a maximum of N500,000.
In compliance with a directive from the apex bank, the commercial banks said customers are to come with a code/reference number pre-generated from the CBN portal designated for the purpose.
A number of CBN staff reached out to on Friday, confirmed that banks were indeed given the directive.
The NESG is an independent, non-partisan, non-sectarian organisation, committed to fostering open and continuous dialogue on Nigeria’s economic development.
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