utha Gupah, Maiduguri
The World Bank has said that the Central Bank of Nigeria (CBN) redesign of naira notes; will hit the Small and Medium scale Entrepreneurs (SMEs) and the vulnerable poor in the North.
According to the apex bank, the redesigns of the 100, 200 and 500 naira notes could have negative effects on the rural areas local economy.
The World Bank raised the alarm, yesterday (Tuesday), in its 2022 new report titled: “The Nigeria Development Update,” released in Maiduguri, the Borno state capital.
“The Naira redesign might harm SMEs and the vulnerable poor; due to its timing and short transition period, slated for January 31, 2023,”
“While periodic currency redesigns are normal internationally and the naira does appear to be due for it since naira notes have been redesigned for two decades.”
The report warned that the timing of and short transition period for the demonetization may have negative impacts on economic activities.
It explained that the most hit of the naira redesigns are the poorest households living in rural and urban centres.
While citing international experience, the report, disclosed: “The rapid demonetizations can generate high short-term costs,” stating that small-scale business operators and the vulnerable poor households will be most affected with liquidity squeezes.
“The SMEs and vulnerable poor heavily rely on the day-to-day transactions with cash,” said the Report.
“At present, households and firms already face increased financial pressures from the lingering high costs of food and fuel,” it noted.
The report added that inflation has also hit 24 per cent in six months.
