March 30, 2023

Cash swap policy: Businesses won’t recover soon, NECA warns

NECA calls for urgent economic recovery effort

…Commends NLC, Ngige, Emefiele over suspension of planned strike

By Victor Ahiuma-Young

Nigeria Employers’ Consultative Association, NECA, has warned that the ripple effects of the cash swap policy would linger and would take a long time for businesses, especially the informal sector, to recover as many of them have closed due to low purchasing power of consumers.

NECA in a statement yesterday in Lagos, however,  commended the Nigeria Labour Congress, NLC, leadership, presided by Joe Ajaero and the Federal Government of Nigeria for embracing social dialogue and heeding the call of stakeholders to abort the NLC planned nationwide strike that would have commenced Wednesday, March 29, 2023.

The Director-General NECA, Mr Adewale-Smatt Oyerinde, the statement among others, said “The Central Bank of Nigeria (CBN) has shown goodwill and true support for the ailing economy by immediately disbursing cash to the Commercial Banks and directing them to open beyond their normal working hours to ease the cash crunch in the nation.  This action could have been averted in the first place.

“We commend the efforts of the Governor, Mr Godwin Emefiele and the Honourable Minister of Labour and Employment for personally getting involved and monitoring the disbursement to ensure compliance with the Bank’s directive to end the cash crunch, which the economic nerve-centre and other areas have started witnessing improvement. 

“Business activities had stagnated in the last 10 weeks of the implementation of redesigning of the currency policy nationwide leading to reduced productive output, high inventory and jobs cut and impediments to personal and business transactions.

“However, we want to warn that the ripple effects of the cash swap policy will linger as it will take a considerable time for businesses, especially the informal sector, to recover as many of them have closed due to the low purchasing power of consumers.

“It is necessary for Government to demonstrate a similar commitment to addressing other monetary and fiscal policies challenges that are currently stifling businesses such as foreign exchange dichotomy, fuel subsidies, and multiple taxations, amongst others.  The quick response by the Government to ease the cash liquidity and the corresponding immediate positive effect on the economy demonstrated that Government has the capacity to address policies once they are determined to do so.

“We, therefore, advocate for similar determination and consultative engagements with the private sector and other relevant stakeholders to proffer solutions to business challenges in order to facilitate competitiveness and productivity.”