I think, this is the worst time to be in Nigeria, and most Nigerians won't agree less. It is funny how difficult and almost impossible it currently is to access your stored money here in Nigeria. We are now living the curse of a centralized economy, and the beauty of decentralization is now more evident that ever.
Nigeria, the most populous country in Africa and the largest economy on the continent, is currently undergoing a difficult currency redesign that has led to widespread hardships, unrest and destruction across the nation. The new naira notes were introduced to combat corruption and crime and help stabilize the country's falling economy (so we were told). However, the currency redesign has backfired, as there is a shortage of new notes and currently chaos in the land.
The Nigerian government central bank's decision to introduce a new currency was a response to the high level of corruption and crime in the country, which was fuelled by the large amount of cash in circulation. The new currency was meant to be more difficult to counterfeit and easier to track, which would make it more difficult for criminals to use cash for illegal activities. Additionally, the redesign was intended to combat inflation, which had been a significant problem in Nigeria for many years.
However, the introduction of the new currency has not gone as smoothly as the government had hoped. The new notes have been phased in gradually (as very few have been printed), while the old notes are being phased out rapidly creating enormous imbalance. With very little new notes available to replace the old ones, people are suffering as a result. The shortage of new notes has led to long queues at banks, as people try to exchange their old notes for the new ones. Some banks are refusing to accept old notes as the timeline provided for this has passed, and this has led to frustration and anger among the population.
The shortage of new notes has also led to a rise in the black market, where new notes are being sold at a premium. This has further fueled inflation, making life more difficult for the already struggling population. As a result, people have resorted to protest and destruction of banks and mobile money operators' offices. Some banks have been burnt down, and even some central bank facilities have been affected.
Just this afternoon, I escaped with my life as the armed forces turned their guns against a group suspected to be gearing up for a protest. What's more, just close to my home, two money deposit banks have been destroyed with one burnt to the ground. I can't show pictures as I can't go out as at the time of writing.
The unrest is increasing, and there is a potential for a nationwide declaration of a state of emergency. This would have serious consequences for the Nigerian economy and could lead to a collapse in the country's financial system.
In light of the current situation, it is clear that the currency redesign has not been well-planned and executed. What's more, it has also been greatly politicized as we are few days to the national election.
The shortage of new notes is a significant problem, and the government needs to take urgent action to address it (and I just hope people act more rationally). One solution would be to print more new notes and distribute them quickly across the country. This would help to ease the shortage and reduce the frustration and anger among the population. The fact is that the country's attempt to transition to a cashless economy has failed as a majority of the people live in rural areas with very little or no access to electricity and the internet, cash remains the only legal exchange.
Furthermore, the government needs to engage with the population and listen to their concerns. The current unrest is a clear sign that people are frustrated and angry with the government's handling of the currency redesign. The government needs to show that it is taking their concerns seriously and taking action to address them.
I just wish something is done as soon as possible, because when Nigerians grow impatient, all manner of rational reasoning is lost. At this stage, this feels more than a humanitarian crisis, and we the weak and innocent are feeling the pain the most.
Posted Using LeoFinance Beta