Nigeria's economy has suffered a significant setback as a result of the acute cash scarcity. The government must take swift action to address the situation...

Nigeria's economy loses N20tn amid acute cash scarcity

The Centre for the Promotion of Private Enterprise (CPPE) has revealed that Nigeria's economy has suffered losses amounting to N20tn ($49bn) due to the deceleration of economic activities. This was caused by the crippling of trading activities, stifling of the informal economy, contraction in the agricultural sector, and paralysis of the rural economy. The chief executive officer of CPPE, Dr. Muda Yusuf, attributed the situation to the acute cash shortage that has led to the rejection of old currency notes by market operators, refusal by banks to accept old notes, and the absence of official pronouncements by the CBN on the issue. Yusuf called on President Buhari to intervene to end the hardship, which he said has become a major risk to the livelihoods of Nigerians.

The purchasing managers index (PMI) report also showed that many businesses are experiencing difficulties in finalising transactions due to poor access to cash and downtime on payment channels. Workers' productivity has drastically nose-dived, leading to reduced output. Many workers in the civil service and some private organisations have remained at home due to lack of transport fare to get to their places of work. This has also led to many factories having to reduce their workforce, thereby affecting production capacity.

Operators in the food and beverage sub-sector have noted that many consumers are wary of spending available cash on certain items, leading to low patronage of their products. The sector has lost billions, as most factories have shut down due to low patronage. Lateef Oyelekan, the former president of the National Union of Food, Beverage and Tobacco Employees (NUFBTE), said the government was torturing Nigerians with the naira redesign policy.

The situation has also affected many organisations as workers’ productivity has nose-dived drastically, thereby affecting output. Many workers in the civil service and some private organisations have remained at home due to lack of transport fare to get to their places of work. A civil servant with a family of four revealed that he could not afford to transport himself to work and back.

Nigeria's economy has suffered a significant setback as a result of the acute cash scarcity. The government must take swift action to address the situation to prevent further harm to the economy and the livelihoods of Nigerians.