Financial experts have urged Nigerians to prepare for more challenging times as they cope with the multifaceted misery brought on by the ongoing Naira scarcity as the crises may not soon end, Entrepreneurng report.
Despite claims that the Central Bank of Nigeria (CBN) will reduce the country’s cash shortage, data, financial analysts, market intelligence, and expert opinions indicate that Nigerians will continue to experience restricted cash circulation for weeks or even months unless the apex bank drastically changes its management strategy.
The Nigeria Labour Congress (NLC), which threatened to ground the economy if cash circulation did not significantly improve, recently pushed the CBN to come off its high horse.
The decision was made following several weeks of only partially implementing the Supreme Court’s order extending the use of the previously phased-out old notes into December.
The amount of money the banks have accessed, though, is a far cry from what the economy needs to be completely lubricated.
No bank would be able to satisfy 50% of its customers’ cash needs “without running into major problems,” according to a prominent banker.
Also, it was revealed that the lack of consumer deposits makes the shortage worse. Tellers no longer receive money from depositors and provide it to customers who are withdrawing it; as a result, most branches are now forced to rely on supply from their regional offices.
The CBN has been the only source of funding for regional or head offices of banks over the past two weeks as they have used up all of the cash that was left in their vaults after the January/February mop-up.
“The method is not viable, and until that process improves, I don’t see what anyone will do to end the supply situation. How much will CBN print to meet the industry’s cash needs if customers withdraw cash only to keep a sizable portion of it and nobody returns the money that has been given out to banks as deposits? asked another banker.”
The CIC to gross domestic product (GPD) ratio in output relations has decreased from 1.63 percent in December to 0.49 percent now. The current CIC also equals N4,546 per person (per Nigerian).
Conclusion
The official statistic includes the quantity of brand-new notes that Nigerians are hoarding. The new N200, N500, and N1000 notes which had previously been assumed to have been scooped up by politicians and other extremely important people (VIPs) have been replaced by the old ones. Even though the notes cannot yet be withdrawn over the counter, no ATMs currently dispense them.
Source: The Gaudian
