Following the Naira Scarcity in Nigeria, GoldenNewsNg has compiled Latest CBN News On Naira Notes Today 7th April 2023.
The scarcity of naira, the official currency of Nigeria, can have a significant impact on the country’s economy and its citizens. Some of the effects of naira scarcity in Nigeria include:
- Inflation: The scarcity of naira can lead to an increase in prices of goods and services, leading to inflation. This can result in a decrease in purchasing power and a decrease in the standard of living for the citizens.
- Unemployment: Naira scarcity can lead to a decrease in economic activity and investment, which can result in job losses and increased unemployment.
- Currency devaluation: When there is a scarcity of naira, the value of the currency can decrease, making it less valuable in international markets. This can lead to a decrease in foreign investment and an increase in the cost of imported goods.
- Black market activities: When the official exchange rate is not favorable, people may turn to the black market to exchange their money. This can lead to an increase in illegal activities and corruption.
Overall, naira scarcity can have a negative impact on the economy and the citizens of Nigeria, leading to inflation, unemployment, currency devaluation, and illegal activities.
Naira Scarcity: NLC Renews Pledge To Roll Back Anti-People Policies As Queues At Banks Persist
Despite the Nigeria Labour Congress (NLC) granting a two-week grace period to the Central Bank of Nigeria (CBN) and commercial banks to ensure cash availability, there still seems to be a problem with accessing cash. During a recent visit to some bank premises in Abuja, long queues were observed as customers struggled to gain access to banking halls for withdrawals since most Automated Teller Machines (ATMs) were not dispensing cash. This problem persisted even after the NLC suspended its earlier proposed picketing of the CBN offices nationwide to allow the apex bank to restore total normalcy of cash availability.
An Abuja resident, Lawrence Audu, who spoke with me at one of the bank premises in Utako, said he has been trying to withdraw cash for two days without success. He explained that he went to several ATMs, but they were not dispensing cash, and even when he joined the queue, he still had to wait for over an hour. Other areas such as Mararaba, Nyanya, and Karu also had pockets of long queues.
The NLC has warned that it will embark on a nationwide strike without warning if the cash situation does not improve. The Congress National President, Comrade Joseph Ajaero, explained that NLC has set up a Joint Committee at the national and state levels to monitor and ensure sustainable compliance by the CBN towards ending the cash crunch and removing the siege on Nigerians. He also called for the continued support of all Nigerians to ensure that the government rolls back all anti-workers and peoples policies.
Naira Scarcity: Zenith Bank installing a “brand new IT architecture
To keep up with the rising demand for online banking transactions, Zenith Bank is currently implementing a new IT infrastructure. This move was prompted by the central bank’s push for cashless transactions, which revealed the limitations of some traditional commercial banks’ infrastructure.
Despite being Nigeria’s most profitable bank and a Tier 1 Bank (FUGAZ) member, Zenith reported a decline in profits, from N244.5 billion to N223.9 billion, due to various economic challenges, including the Ghanaian sovereign bond default and a shortage of naira, which placed significant strain on its infrastructure.
To address these challenges, Zenith Bank is installing a new IT architecture, at a cost of N30.9 billion, the highest operating expense apart from the AMCON levy, to accommodate the growing need for online banking.
Zenith Bank Adapts to Cashless Transactions
As the Central Bank of Nigeria pushes for more cashless transactions, traditional commercial banks are facing limitations in their infrastructure. Zenith Bank, one of the country’s most profitable banks and a Tier 1 Bank member, has reported a decline in profits due to various economic challenges. In response, the bank is implementing a new IT infrastructure to keep up with the growing demand for online banking transactions.
Challenges Faced by Zenith Bank
In recent years, Zenith Bank has faced a number of challenges that have impacted its profits. One major issue has been a shortage of naira, which has placed significant strain on the bank’s infrastructure. Additionally, the Ghanaian sovereign bond default has had a negative impact on Zenith Bank’s profits.
Implementing a New IT Infrastructure
To address these challenges, Zenith Bank is investing N30.9 billion to install a brand new IT architecture. This will enable the bank to accommodate the growing need for online banking, ensuring that it can keep up with the Central Bank’s push for cashless transactions.
The Importance of Online Banking
Online banking has become increasingly important in recent years, and the COVID-19 pandemic has only accelerated this trend. With more people staying at home and avoiding physical contact, online banking has become the go-to option for many customers. As a result, banks like Zenith are investing in new IT infrastructure to ensure that they can meet the growing demand for digital banking services.
By investing in a new IT infrastructure, Zenith Bank is taking steps to address the challenges it has faced in recent years. With this new infrastructure in place, the bank will be well-positioned to accommodate the growing demand for online banking services and continue to serve its customers effectively.
Naira Scarcity Forces 25m MSMEs To Shut Down – ASBON
Naira Scarcity and MSMEs in Nigeria
The ongoing scarcity of the Naira has had a devastating effect on MSMEs in Nigeria, with an estimated 25 million businesses being forced to shut down or significantly reduce their operations. This has had a major impact on the country’s ease of doing business ranking, particularly for unbanked SMEs in the informal sector.
Effects on the Nigerian Economy
The closure of so many MSMEs has had a ripple effect on the Nigerian economy, leading to job losses and a reduction in economic activity. The country’s informal sector, which accounts for a significant portion of its GDP, has been hit particularly hard, as many of these businesses rely on cash transactions and are not able to access digital financial services.
The Importance of MSMEs
MSMEs play a vital role in the Nigerian economy, providing employment opportunities and contributing to economic growth. However, the prolonged scarcity of the Naira has made it difficult for these businesses to survive. Many of them have struggled to access the foreign exchange they need to import goods, while others have been unable to secure loans from banks due to the high interest rates and stringent lending criteria.
Addressing the Issue
To address the issue of Naira scarcity and its impact on MSMEs, the Nigerian government and financial institutions are taking steps to increase access to digital financial services and reduce the reliance on cash transactions. Initiatives such as the Cashless Policy and the National Financial Inclusion Strategy are aimed at promoting financial inclusion and expanding access to digital financial services for MSMEs.
The scarcity of the Naira has had a significant impact on MSMEs in Nigeria, leading to the closure of many businesses and a reduction in economic activity. To address this issue, it is important for the government and financial institutions to work together to increase access to digital financial services and reduce the reliance on cash transactions, which will help to promote financial inclusion and support the growth of MSMEs in the country.
Financial Literacy and Digital Banking Crucial for Financial Inclusion
Importance of Financial Literacy and Digital Banking for Financial Inclusion
Dr. Femi Egbesola, the national president of the Association of Small Business Owners of Nigeria (ASBON), has highlighted the importance of financial literacy and access to digital banking platforms in reducing the financial exclusion gap in Nigeria’s informal sector.
Many MSMEs in Nigeria are run by entrepreneurs who lack formal financial education, making it difficult for them to navigate the financial system and make informed decisions. Financial literacy programs can help to address this issue by providing these entrepreneurs with the knowledge and skills they need to manage their finances effectively.
Digital banking platforms can also play a crucial role in promoting financial inclusion by providing MSMEs with access to financial services that were previously unavailable to them. These platforms enable MSMEs to access loans, make payments, and conduct other financial transactions quickly and easily, without the need for a physical presence.
Reducing Redundancy and Labor Loss
By providing MSMEs with access to financial education and digital banking platforms, it is possible to reduce the redundancy and labor loss that has been seen in the sector as a result of the scarcity of the Naira. MSMEs will be better equipped to manage their finances and access the financial services they need to grow their businesses and create employment opportunities.
In conclusion, financial literacy and access to digital banking platforms are crucial to promoting financial inclusion and supporting the growth of MSMEs in Nigeria’s informal sector. By investing in these areas, the country can reduce redundancy and labor loss, while also promoting economic growth and creating employment opportunities for its citizens.