Vice-President Shettima Calls for Seamless Naira Circulation

Nigeria’s Vice President, Senator Kashim Shettima, has called on deposit money banks (DMBs) to ensure the seamless availability of Naira notes for the public.

Vice President Shettima appealed on Friday in Abuja during the 2024 Bankers’ Committee Retreat.

He was represented by Tope Fasua, special adviser on economic affairs, Office of the Vice President.

He urged the committee to address some unwholesome practices by some Point of Sale (PoS) agents that impeded the availability of cash.

According to him, the scarcity of cash is constituting an impediment to financial inclusion.

“We would like to take this opportunity to appeal strongly to the committee to urgently clear up thorny issues in the sector, some of which are impeding the efforts at financial and economic inclusion.

”Nigerians complain bitterly that they are unable to access even minimal cash when most needed.

“There seems to have been some moral hazard and adverse selection problem with the involvement of street-side PoS merchants.

”Nigerians complain about high and arbitrary charges and exploitation by rogue agents, which we are sure you will be able to tackle with concerted efforts,” he said.

Shettima also said that there was a need for more initiatives towards the financing of MSMEs.

He urged them to continue to support the efforts of the Nigerian government in the area of consumer credit culture.

According to Shettima, Nigerian banks have shown dominance in the West African region and beyond.

He cited the concept of new capability development as propounded by Prof. Ricardo Haussman of the Harvard Kennedy School.

“It suggested that a country should try using technology to export capabilities that it sees as a comparative advantage.

“Banking is one sector we have excelled at over the years. It is, therefore, a valid strategy for you to consolidate upon as you continue to excel.

“The recent opening of Nigerian bank branches in France is a good testimony in this direction,” he said.

Shettima urged the committee to continue to be at the cutting edge of risk management and to develop robust responses to the changing face and pace of banking and finance.

“This has greatly transmogrified in recent times, with the incursion of different types of fintechs, neobanks, agency banks, and other arrangements directed at improving financial inclusion.

“There are also the implications of cryptocurrency and decentralised finance on banking as we know it.

”These developments have profound effects on the retail segment of the market, and so our banks must continue to be deft and nimble even in the face of higher capital requirements,” he said.

Shettima said that the unification of the Naira exchange rates had coincided with some weakening in the currency, which in turn has spurred some behavioural adjustments among our people.

He said, ”We see that today, Nigerians have cut back on some foreign travels; foreign education has slowed down to the extent that many foreign universities are feeling the pains.

“There is now more focus on local educational institutions, and many world-standard facilities have now debuted in Nigeria.

“The weakening of the Naira has also resulted in a spike in exports as the Marshall-Lerner principle in economics has kicked in for
Nigeria.

“The principle states that a nation is likely to see an increase in exports and gain from currency devaluation if exports are price elastic.”

According to Shettima, a weaker currency will discourage imports that are price-elastic and may spur local value-addition and production.

He added, ”Whereas our main export, crude oil, is not price elastic, but our non-oil exports have delivered.

“In the first quarter of 2024, Nigeria saw a trade surplus of four billion dollars, which increased to 4.5 billion dollars in the second quarter.

“The Gross Domestic Product (GDP) growth rate of 3.46 percent seen in the third quarter was driven largely by non-oil exports as well.

”This is a validation of the stated commitment of the government to diversify the economy.”

 

 

 

NAN