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By Merit Ibe
The Organised Private Sector has cried out over the pervading, prolonged cash scarcity which has put pressure on the business and household sectors, saying businesses are facing critical existential challenges. In his view yesterday, President of the Lagos Chamber of Commerce and Industry (LCCI), Dr Michael Olawale-Cole, lamented the state of the economy, which he said can no longer withstand further stress and may lead to complete breakdown.
Olawale-Cole explained over 80% of transactions in volume terms are conducted via physical exchange of the Naira, therefore, limiting physical access to the legal tender impacts its velocity and capacity for wealth creation and productivity of the real and other sectors of the economy.
Pointing out that the most challenged at this time are the micro small and medium enterprises (MSMEs) – a key driver of our economy, he said some of them were not just strained but were folding up.
He listed some of the challenges to include continuous rising inventory stockpiles; cautious production due to weakening demands; extensive supply chain issues; rising interest rates and lay-offs; devastating hyperinflation and
weak Naira purchasing power, amongst others.
“Generally, much productive time, energy and man-hours are wasted in unneeded long queues for cash.”
It is unfortunately, a productivity downtime for Nigeria and Nigerians. This cannot be the desired position for any economy as it often leads to crippling effects on the economy – a fall in the GDP numbers, a drop in wealth creation, and a rise in the poverty measures, amongst others. “Our democracy and our economy are fragile and need protection. The way things are going is very worrisome for the Organised Private Sector and the Chamber is concerned about the state of affairs. Now is the most auspicious time for the authorities concerned to help the situation. The economy can no longer withstand further stress, which may lead to a complete breakdown of our society.”
On his part, Director, Centre for the Promotion of Private Enterprises (CPPE), Dr Muda Yusuf bemoaned the protracted acute cash scarcity, which has not only crippled economic activities in the country, but is now a major risk to the livelihoods of most Nigerians, as payment systems across all platforms have collapsed.
Yusuf decried that Nigerians have not been this traumatised in recent history, noting that millions of citizens have slipped into penury and destitution as a result of disruptions and tribulations perpetrated by the currency redesign policy, especially the mopping up of over 70% of cash in the economy.
He pleaded with President Muhammadu Buhari to immediately intervene to put an end to the devastating and traumatic outcomes of a repressive, poorly conceptualized and badly implemented currency redesign policy.
“Digital platforms are performing sub-optimally because of congestion; physical cash is unavailable because the CBN has sucked away over 70% of cash in the economy.
“Retail transactions across sectors have become nerve-wreaking and distressing as payment system challenges persist. Since the onset of the cash crisis, the Nigerian economy has lost an estimated N20 trillion. These losses arose from the deceleration of economic activities, the crippling of trading activities, the stifling of the informal economy, contraction in the agricultural sector and the paralysis of the rural economy. There are also corresponding job losses in hundreds of thousands.”
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