ONGOING CURRENCY EXCHANGE

Fuel shortages, problems getting permanent voter cards, and a lack of cash from banks and other financial institutions have caused immense suffering for many Nigerians over the past several days. Nigerians from all walks of life have continued to respond to this circumstance with suggestions for how to overcome the difficulty. No doubt, the debut of the redesigned Naira notes last year brought about great expectations for the easy transition to the use of the new notes for business transactions across the country.

However, the comments from the people imply that there may have been disappointment, obstruction of business deals, and time and money lost.

As this remains the minimal expectation in the face of the current currency crisis, it has been stated that the Central Bank of Nigeria (CBN) must increase its capacity to implement policies while also educating the public about the murky regions around the scarcity of the new Naira notes.

The new Naira redesign has continued to elicit a range of responses, and these responses tend to imply that related issues—such as the phase-out of older currency notes, the withdrawal restriction, and the paucity of new notes—may now be having an unintended impact on companies and social livelihood. Banks have made an effort to satisfy their customers' currency needs through automated teller machines and electronic transfers, but the Naira's dearth has rendered such efforts futile.

Businesses are suffering as a result of the CBN's currency management policy, according to Dr. Chinyere Almona, Director-General of the Lagos Chamber of Commerce and Industry.

If the shortage of the new Naira notes continues, it is thought that the deadline extension for phase-out of the old notes does not appear to deliver much value. The group is in favor of the transition to a cashless economy, the redesign of the Naira, and the phase-out of old banknotes, but claims that it might have been done more efficiently and without causing difficulty for both businesses and people. Similar to this, the Central Bank of Nigeria (CBN) recently boosted the MPR from 16.5% to 17.5% through the Monetary Policy Committee (MPC), among other things, by maintaining the asymmetrical corridor of +100/-700 basis points around the MPR, the CRR at 32.5%, and the liquidity ratio at 30.0%.

We concur with the monetary authorities that now may not be the best time to lower interest rates given that the decision to raise rates further is intended to reduce inflation, which has remained above 21% as we approach a general election and the fact that the issues driving food inflation are still largely unresolved. The redesign of the Naira notes, the introduction of Nigeria's first domestic card program to expand the paperless economy, and the withdrawal caps are new efforts. While the public is interested in how these efforts perform, there will undoubtedly be some effect on expenditure, which could then have an impact on how business is conducted and the changes made to the economy.

The LCCI had maintained that it can forecast that there will be some easing of inflation in the first quarter, noting that the monetary rates in some economies and the easing or acceleration of inflation rates around the world have made it possible to contain food inflation and its impact on overall inflation. In Nigeria, there is a need to address the core causes of food inflation by focusing on issues like targeted support for the industrial sector, more export infrastructure for companies, and increased agricultural exports.

Because rate increases are known to weaken growth, it is expected that the monetary and fiscal authorities will intervene with strategies and tools that promote growth. The CBN is therefore urged to dig deeper into the peculiar circumstances driving inflationary pressures within the Nigerian economy. Additionally, it urges the government to start taking precautions now in case flooding occurs in 2023. Additionally, the rise in the policy rate would put more pressure on companies, with the subsequent effect of higher operational costs that may result in job losses and low productivity. This was a significant concern over the adoption of additional taxes, as outlined in the 2022 Finance Bill, while urging the government to take these concerns into consideration and streamline them so that they do not swamp

In addition to requesting the government to consider streamlining these concerns so that they do not overwhelm businesses and make them unproductive and uncompetitive, this was a major concern over the adoption of additional taxes as stated in the 2022 Finance Bill.

In addition to raising interest rates, officials should examine other measures to boost and stabilize oil production levels in order to generate more foreign exchange. The CBN's use of monetary instruments can be complemented by better coordination of fiscal policy. We have constantly pushed for a more welcoming political and corporate climate that will draw in both local and foreign investment and increase productivity, especially in the domestic food industry.

While we applaud recent progress in addressing insecurity, we advocate for increased technology and surveillance apparatus deployment, especially as the general elections approach in a few weeks. Weak power supplies, currency shortages, and costly logistics caused by fuel shortages are serious problems that need to be continuously monitored and addressed with strong fiscal and policy measures, according to the chamber.