The chairman of the Chartered Institute of Bankers, Abuja Branch, Professor Uche Uwaleke has said that the naira notes swap deadline has reduced ransom settlement to hoodlums and kidnappers in the country.
Uwaleke stated this in an interview with AIT to evaluate the old notes swap deadline and monitored by Nairametrics.
Benefits of Naira Swap: He also noted that the pressure from the black market to mop up dollars and other hard currencies has also reduced following less cash in society.
- “To some extent, we have seen some benefits in the naira swap, we have seen less ransom payment, we have seen fewer people spraying in functions, pressures from black markets have also reduced, electronic transactions have also improved. The influence of money in the political arena is likely to reduce,” he said.
Negative impact on SMEs: Uwaleke noted that the development has come with negative consequences, especially for small and micro businesses that are groaning.
- “Those that are selling perishable items are forced to crash their prices, a lot of man hours are wasted on the queues at banks across the nation, a feeling of despondency among Nigerians,” he said.
Inflation: He noted that the policy was not the best way to fight inflation in a country like Nigeria. Nigeria’s inflation rate for January 2023, hit a record high of 21.82% representing a 0.47% increase when compared to the 21.34% recorded in the previous month. This was according to the recent report released yesterday by the National Bureau of Statistics (NBS).
- I don’t see this measure as a good way to fight inflation. A country with tepid growth doesn’t need such policy as a weapon for battling rising inflation, when products are produced and not sold, it can lead to loss of jobs, it can lead to recession, the economy is already contracting,” he said.
Short-term/long-term: He noted that in the immediate and short term, the impact on the economy will be negative adding that, that was what happened to India in 2016.
- In the case of India, their GDP failed, and in Nigeria, particularly in the first and second quarters’ GDP will also fail.
- “Just like what was obtained in India where the long term the country started recording revenue growth, the policy will also have a positive impact on the Nigeria economy if carefully implemented,” Uwaleke said.
Need for more notes in circulation: He called on the CBN and other relative agencies to improve the distribution of the new notes and the old ones that are still legal tender.
- “CBN and other stakeholders need to improve in the distribution of the new notes; they also need to push out more old notes that are still legal tender. The supply is low and needs to be improved,” he said