ADVERTISEMENT

World Bank faults CBN’s transition period for naira redesign

The World Bank says the scarcity of the new notes does not automatically translate to an increase in digital payments.

 Supreme Court recently suspended Godwin Emefiele's deadline on naira notes swap. (Channels TV)

The global financial institution said it is normal for countries to have a periodic currency redesign but the transition process should take about a year.

The World Bank’s Senior External Affairs Officer for Nigeria, Mansir Nasir stated this in an email response to The Punch on Wednesday, February 8, 2023.

The World Bank’s position is in line with Supreme Court’s judgement that asked the Federal Government and the CBN to discontinue the February 20, 2023 deadline for the cash swap policy.

ADVERTISEMENT

The bank said, “Periodic currency redesigns and demonetization of older notes are normal internationally. However, they usually involve transition periods of one year or longer so as to minimize economic disruption.

“After the Central Bank of Nigeria announced the naira redesign on October 26, 2022, with a short implementation timeframe through January 31, 2023, the World Bank expressed concern about the timing and short transition period”.

The bank also said the CBN’s rapid demonetisation could be costly to small businesses and poor and vulnerable households, adding that the scarcity of the new notes does not automatically translate to an increase in digital payments.

“This concern is based on international experience which suggests that rapid demonetizations can generate significant short-term costs, with small-scale businesses, and poor and vulnerable households, including in rural areas, being particularly affected as they are liquidity-constrained and rely heavily on day-to-day cash transactions”

“It is highly unlikely that digital payments can increase quickly enough to compensate for the shortage of new notes; according to the latest available data (from before this policy), only 45 percent of Nigerian adults had a bank account, 34 percent reported paying or receiving money digitally over the past year, and only 9 percent made an in-store payment by digital means, the bank said.

ADVERTISEMENT

The bank submitted that digitisation is a structural challenge that will take time and require a systematic approach.

“In view of the apparent ongoing scarcity of new notes and the potential adverse economic and social impacts should the shortage of cash persist, the World Bank remains concerned about the short timeframe and would encourage the authorities to consider allowing a longer period for the redesign,” the bank said.

Meanwhile, following the Supreme Court judgement on Wednesday, President Muhammadu Buhari and the Governor of the Central Bank, Godwin Emefiele met at the State House, Abuja.

But the details of the meeting are yet to be revealed as Emefiele refused to speak with journalists after the meeting.

JOIN OUR PULSE COMMUNITY!

Unblock notifications in browser settings.
ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.ng

Recommended articles

Renowned Canada-based Nigerian playwright, Oguntokun is dead

Renowned Canada-based Nigerian playwright, Oguntokun is dead

Kaduna Gov grants scholarship to 137 rescued schoolchildren, son of late teacher

Kaduna Gov grants scholarship to 137 rescued schoolchildren, son of late teacher

Siamese twin gets married while still conjoined with her sister

Siamese twin gets married while still conjoined with her sister

LP BoT kicks out Abure despite convention victory, takes over party affairs

LP BoT kicks out Abure despite convention victory, takes over party affairs

6 Labour Party lawmakers defect to PDP in Enugu State

6 Labour Party lawmakers defect to PDP in Enugu State

Tinubu's special assistant donates food items to 1,700 residents in FCT

Tinubu's special assistant donates food items to 1,700 residents in FCT

Anambra PASAN begins strike over Soludo's failure to grant financial autonomy

Anambra PASAN begins strike over Soludo's failure to grant financial autonomy

Governor Sanwo-Olu pays ₦4.48 billion to 1,455 retirees in accrued pensions

Governor Sanwo-Olu pays ₦4.48 billion to 1,455 retirees in accrued pensions

Court discharges ex-AGF Adoke, 6 others in Malabu oil scam case

Court discharges ex-AGF Adoke, 6 others in Malabu oil scam case

Pulse Sports

Nigeria vs Mali: Has Finidi George done enough to land Super Eagles job permanently?

Nigeria vs Mali: Has Finidi George done enough to land Super Eagles job permanently?

I want to emulate Keshi and win the AFCON - Finidi George shares ambitious Super Eagles dream

I want to emulate Keshi and win the AFCON - Finidi George shares ambitious Super Eagles dream

Michelle Alozie: I had to do it because of African referees

Michelle Alozie: I had to do it because of African referees

AC Milan star reveals he was named after Super Eagles legend Tijani Babangida

AC Milan star reveals he was named after Super Eagles legend Tijani Babangida

Give him the job! Super Eagles fans beg NFF to make Finidi George permanent coach after Nigeria's win over Ghana

Give him the job! Super Eagles fans beg NFF to make Finidi George permanent coach after Nigeria's win over Ghana

Super Eagles 2-1 Black Stars: Nigerians praise Iwobi, Lookman, Finidi George after friendly victory against Ghana

Super Eagles 2-1 Black Stars: Nigerians praise Iwobi, Lookman, Finidi George after friendly victory against Ghana

ADVERTISEMENT
ADVERTISEMENT