During the first quarter of 2023, Nigerians experienced cash circulation shortages due to the naira redesign policy. This policy negatively impacted several informal sector businesses, such as local retail shops, artisans, and commercial bus drivers.
Trading activities for small-scale manufacturers were also affected. The impacts of the naira redesign policy show a need to revive the cashless policy for small businesses to address cash scarcity. Promoting strategic monetary approaches that complement the naira redesign policy will boost free trade in Nigeria.
During the first quarter of 2023, Nigerians experienced cash circulation shortages due to the naira redesign policy. This policy negatively impacted several informal sector businesses, such as local retail shops, artisans, and commercial bus drivers.
Trading activities for small-scale manufacturers were also affected. The impacts of the naira redesign policy show a need to revive the cashless policy for small businesses to address cash scarcity. Promoting strategic monetary approaches that complement the naira redesign policy will boost free trade in Nigeria.
The cash crunch caused reduced trading activities in the informal economy. The Nigerian government must prioritize implementing the African Continental Free Trade Area (AfCFTA) strategy to enhance these trading activities.
The strategy includes improving trade infrastructure, such as transport costs for goods and services. Helping small and medium-sized enterprises improve their payment and delivery systems is another AfCFTA strategy. The strategy also promotes value addition and boosts agricultural productivity. Enforcing these strategies can help put the economy back on track.
Effective implementation of Nigeria’s AfCFTA strategy requires collaboration between the CBN, the federal ministries of finance, and industry, trade and investment. Collaboration is necessary to develop policies and programs that complement local trade and banking policies. The CBN and Ministry of Trade and Investment should prioritize policies such as reducing licensing fees for PSBs.
They must also cooperate to create a regular cash availability strategy for the informal economy. With these complementary policies and a well-implemented AfCFTA strategy, trading activities will increase, assure economic growth, and open up more job opportunities.
The currency redesign policy resulted in unintended consequences and hardship for citizens. However, the naira redesign policy can be a massive leverage for promoting free trade when the appropriate stakeholders enforce complementary policies that align with Nigeria’s current realities.
Source : Bussinesday
