Poor People, SMEs To Suffer Due to CBN's Newly Redesigned Naira - Workd Bank Warns FG

Posted by Thandiubani on Tue 20th Dec, 2022 - tori.ng

The international financial institution said the Naira redesign might have an adverse effect on SMEs and poor Nigerians due to its timing and short transition period.

A bleak future awaits poor Nigerians as a result of the Central Bank of Nigeria's newly redesigned naira notes, this is according to World Bank.

The global bank warned that the redesigned naira will also have negative effect on SMEs and the country's economy.

In a new report titled “Nigeria Development Update”, the international financial institution said the Naira redesign might have an adverse effect on SMEs and poor Nigerians due to its timing and short transition period.

It partly read;

“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 timing of and short transition period for this demonetization may have negative impacts on economic activity, in particular for the poorest households.

“International experience suggests that rapid demonetizations can generate significant short-term costs, with small-scale businesses, and poor and vulnerable households, potentially being particularly affected due to being liquidity-constrained and heavily reliant on day-to-day cash transactions.

“At present, households and firms already face elevated financial pressures from prolonged, high inflation, recently compounded by external food and fuel price shocks, and the severe floods, and phasing out existing naira notes over a short time period may add to their challenges.”