The Director-General, NECA, Mr Wale Oyerinde, has said with the rising inflation and reduction in purchasing power of consumers, the nation could witness the collapse of many small and medium-scale businesses as well as the shutdown of many large businesses.
In a letter on released on Sunday titled, ‘Save the economy from inherent economic contradictions: NECA urges government,’ the DG said rising energy cost, inadequate foreign exchange, high operating cost amongst others had begun to impact businesses negatively.
He lamented that Nigerians were grappling with limited availability of cash and scarcity of petrol.
He said, “As Nigerians grapple with limited availability of cash, they are at the same time confronted with scarcity of petrol, a poduct for which trillions of naira is being expended as subsidy, while businesses also continue to face increasing energy cost, inadequate forex, high operating cost amongst others.
‘With the rising inflation and real reduction in purchasing power of the citizens, the nation could be witnessing the death of many small and medium scale businesses and also shutting down of many otherwise large businesses.”
Oyerinde said the current situation is a great danger for the economy, adding that Nigerians were not able to access the new notes.
“It is apt to conclude that it could be counter-productive to seek to implement a cashless economy abruptly, when at the same time the new Naira notes are being rolled out in limited quantities within an impracticably short timeframe.”
Oyerinde encouraged the government to swiftly ensure the availability of the new naira notes and, if necessary, bring criminal charges against saboteurs in order to allay Nigerians’ irritation and prevent the oncoming breakdown of law and order.
The head of NECA claimed that making money scarce simply serves to encourage counterfeiting.
“And making our currency scarce only increases the incentive for counterfeiting. Also, immediate and drastic action should be taken to ensure adequate supply of petroleum products to cushion the harsh effects of current scarcity. Making Nigerians to spend hours on queue for a product that the nation is naturally blessed with, which is also subsidized is not only contradictory but also shameful.”
He added, “Contrary to the touted narrative and according to financial experts, Nigeria does not have excess cash in circulation (it is less than 2percent of Gross Domestic Product). The latest report by the Central Bank of Nigeria actually shows that the currency in circulation is only N3trn out of N52trn aggregate money supply. If the monetary policy is not working as we have seen overtime, it is not because of the N3trn out of N52trn (which is less than 6percent).”
However, he emphasized once more that the government must protect the country’s economy from additional harm, noting that Nigerians face a variety of issues.
