Naira Redesign, Fuel Scarcity Could Escalate Tension Ahead of Polls - World Bank PremiumTimesng: Nigeria
The World Bank Country Office in Nigeria's capital city, Abuja, has said that the hardship being faced by Nigerians due to fuel scarcity and the naira redesign policy could escalate tension in Africa's largest economy ahead of the general elections., the bank said that the deadline of 10 February for the phasing out of old naira notes will cause a cash crunch which could be economically and socially damaging to vulnerable people in Nigeria.
According to the bank, Nigeria is highly unlikely to achieve digital payments increase quickly enough to complement the lingering shortages of new notes across the country within the stipulated deadline.The Central Bank of Nigeria on 26 October, 2022, announced the introduction of redesigned 200, 500 and 1,000 naira notes into the financial system. But since the notes were unveiled, Nigerians across different parts of the country have had a hard time accessing it from banks and ATM points.
Deposit Money Banks have equally been accused of hoarding the new notes, while some mobile cash point vendors are said to be exploiting the situation by dispensing the new notes to customers at skyrocketed prices. Consequently, the bank noted that if existing notes are indeed demonetised on February 10, there will be a major shortage of physical currency.
At a minimum, the bank said that the new policy imposes a transaction cost on people by forcing them to deposit their existing notes or exchange them for new ones, potentially at a large premium to traders, which again may be most significant for the poorest and most isolated households.As of 2021, the world bank explained that the formal bank account ownership for Nigerian adults was below the average in the Sub-Saharan Africa region, as well as the global average.
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