…Says it will drag economy into deeper hole
By Bimbola Oyesola, [email protected]
As the Nigeria Labour Congress (NLC) intensifies mobilization to picket the Central Bank of Nigeria (CBN) from Wednesday this week, the Nigeria Employers Consultative Association (NECA), at the weekend, cautioned that it would be detrimental to the nation’s ailing economy.
Director-general of NECA, Adewale Oyerinde, warned that the plan “could further drag the economy into a deeper hole, leading to rapid business closures, job losses and other socio-economic challenges”.
The NECA DG said without a doubt the cash crunch has affected businesses, individuals and households terribly.
According to him, the economic experts and analysts have stated that the loss in economic terms could be over N20 trillion as a result of loss of productive hours in bank halls and petrol stations, shut-down of businesses due to low patronage, inability of employees to transit to work, challenges faced by households in meeting basic needs and the general distortion in general supply chain.
He said, “While we had expressed our deep concern as regards the mismanaged and dreadful implementation of the Naira redesign policy, and in fact, some other policies of the Central Bank of Nigeria.
“While we affirm emphatically our displeasure with Government’s loud silence and seeming inactivity in resolving the self-inflicted quagmire, the planned strike, at this time, could be counter-productive.”
Rather than going ahead with the picketing and shut down of the CBN offices as scheduled by the NLC, NECA called for the maximum use of the instrumentality of Social Dialogue in resolving all issues associated with Industrial and social-economic disputes. Oyerinde said actions by government and indeed social partners that could compromise the fragile economic state of the nation should be avoided.
“We urge the Central Bank of Nigeria and indeed, the Federal Government to immediately address the genuine concern of Nigerians in view of the ongoing socio-economic difficulties,” he stated.
Recalled that NECA had earlier urged government to look beyond the politics of the Naira redesign and focus on the damaging effects on businesses and the economy at large.
Oyerinde lamenting about the situation, said too much attention has been placed on the politics of the Naira redesign with Government and in deed, the Central Bank of Nigeria (CBN) shifting attention away from the damaging effect of the cash squeeze on businesses and the already fragile economy as a whole.
“No matter how well intentioned, a good policy with poor implementation plan will ultimately fail, eroding the little gains the economy would have made,” he said.
Giving insight into the real issues with the Naira redesign Policy, the NECA Director-General expressed that it should be on record that the CBN Naira redesign policy with the objectives as stated by the CBN is laudable, but like many of the Bank’s Policy initiatives, this is also flawed by improper and shortsightedness in implementation.
He said for a definitive Monetary policy as the Naira design, it is expected that the CBN will not only take lessons from other countries like India, Myanmar, Australia, Venezuela, Zimbabwe and the European Union, who witnessed various degrees of successes and failures when they implanted their currency redesign, but will also do a thorough analysis and simulation of likely social and economic challenges that might arise and definitive response to those challenges.
He said, “Thus far, it does not seem that the CBN understands the challenges, nor have solutions to the economic issues, thereby allowing speculators and economic saboteurs to have a field day at the expense of legitimate businesses and the economy.”
Oyerinde has alerted that the value chain in the formal and informal sector with over N10 billion cash transaction daily is almost destroyed with consequences for employment, business sustainability and national development.
As an immediate action, the leading member of the organised private sector (OPS) charged the CBN to release more new naira notes into the economy or allow the use of the old ones, pending a time when it will demonstrate competence “by not always putting the cart before the horse in the implementation of monetary policies.”
