THE IMPACT OF SCARCITY OF THE NAIRA NOTES ON SMEs IN NIGERIA
Introduction
The Small and Medium Scale Enterprises
(SMEs) in Nigeria have continued to suffer and count their losses following the
recent policy made by the CBN governor, Godwin Emefiele. The latest CBN policy
on the change of the face of the Nigerian Naira can be safe to say, has caused
more harm than good in the small and medium scale enterprises in Nigeria. Some
business operators deposited thousands of Naira in banks out of fear, and are
now at the mercy of commercial banks to withdraw and put back into their
businesses. This has stifled their economies.
As directed by the CBN governor,
Emefiele, all old notes must be deposited at banks latest January 31st, 2023,
which was later extended to the 10th of February. It suffices, therefore, to
say that this was the foundation or the root-cause of the old naira note
scarcity, as many Nigerians rushed to the commercial banks to deposit their old
notes with the intent of getting new notes as soon as possible. However, it
turned out not to be the case in the long run, as there is no proper
circulation of the new Naira till date.
Nigerians leave their homes and the
comfort of their beds as early as 5:00am to queue at the banks with the hope of
withdrawing cash, and at least have money to run daily activities, but are met
with the sad reality of no cash in circulation, and the point of sale(POS)
operators who could have been of little help complains of no cash, while the
few ones that have the cash to dispense charge as high as 20- 30 % of the total
amount of money to be withdrawn. The current situation has adversely affected
the SMEs because it makes it impossible for them to run their day-to-day
transactions since there is not enough cash in circulation, and coincidentally,
many mobile bank apps are having problems with mobile transfer. This has
greatly affected businesses as SMEs continue to record low patronage.
There are many arguments for and
against the new notes, but the one that stands out is the argument that
although the new note may be a good idea, the time of implementation is wrong
as Nigeria is not ready to go cashless. Also, the time limit stipulated for the
exchange is inadequate, as could be seen in the current strife of Nigerians
trying to join the bank queue from morning to night, fighting to withdraw their
hard-earned money. This has equally affected SMEs in the payment of daily
casual workers. This in turn affects the daily purchase of essentials such
workers since it not every one of them who has bank accounts .Also, some
commodities cannot be purchased via mobile banking, especially because of where
they are sold as well as those who sell them.
Conclusion
The Naira saga in has caused more harm
to SMEs, and this has adversely affected the Nigerian economy. The cashless
policy is not smooth in Nigeria because of poor network signal, especially in
the rural areas. Also, most banks in Nigeria do not have
efficient and effective mobile banking system. This has added to the suffering
of the Nigerian populace, and the poor business operation in the current from
January 31, 2023.
It will be a relief if the Federal government extends the deadline for the use of the old Naira notes as legal tenders in Nigeria. Again, special enforcement agents like ICPC should be on the ground to monitor the dispersion of the Naira notes in order to ensure that there is no hoarding, theft, or even sale of the new Naira notes by commercial banks.
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