The Nigerian Governors’ Forum was warned that the Central Bank of NigeriaThe naira redesign policy may have disastrous effects on the country and may lead to economic recession.
The governors, cutting across party lines, announced this in a communique signed by the chairman of the NGF, Governor Aminu Tambuwal of Sokoto State, at the end of their meeting on Saturday in Abuja.
NGF notes that people can not use the new notes has led to severe economic consequences, including the emergence of the black market, food inflation, variable commodity prices, long lines and crowds at ATMs.
“The country is at risk of recession caused by the CBN,” the NGF said.
The naira redesign policy was introduced as part of the apex bank’s efforts to check inflation, counterfeiting and corruption. But since the policy was introduced, Nigerians have found it difficult to get money for their daily transactions due to shortages.
With millions of Nigerians unable to access cash, economic activity has slowed to a crawl.
The NGF advises that a slowdown in economic activity could lead to a recession, a condition when a country’s economy declines to contract for two consecutive quarters.
Nigeria entered recession late in the third quarter of 2020, due to the impact of COVID-19 on travel and goods supply chains around the world. But in the fourth quarter of 2020, the country emerged from recession as GDP grew by 0.11 percent.
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Earlier, the country experienced its first recession in more than two decades in 2016, when the economy contracted by 1.6 percent due to negative oil prices.
The NGF in its statement said that to implement the cashless policy and expand digital transactions, the best practice around the world is to create incentives to attract customers, instead of the ‘draconian approach’ being deployed in Nigeria.
The governors also rejected the CBN’s argument that the astronomical increase in circulation was the basis for the policy.
He added that the CBN did not take into account the country’s nominal GDP growth during this period, the doubling of consumer prices, population growth, and the impact of Ways & Means progress in the federal government by the CBN.
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