Assessing the Effect of Naira Redesign Policy on Rural Dwellers in Nigeria PDF
CHAPTER ONE
Objective of the study
The objectives of the study are;
- To assess how rural dwellers in Nigeria are accepting and adopting the redesigned Naira in their daily financial transactions
- To examine the impact of the Naira redesign policy on the financial literacy of rural dwellers
- To analyze the economic disruptions, if any, caused by the introduction of the redesigned Naira in rural areas
CHAPTER TWO
REVIEWED OF RELATED LITERATURE
INTRODUCTION
Cashless policy is a macroeconomic policy targeted at reducing the total amount of physical currency in an economy thereby creating room for electronic-based payments (Ejiobih et al., 2019). It is a strategy that is usually deployed by the Apex Banks of many nations to reduce the use of currency for carrying out transactions. To Meseigha and Ogbodo, (2013), it is a system that makes payment for goods and services possible and offered through the Internet or any type of electronic fund transfer system. These opinions stress the fact that a cashless economy/policy is intended to ease transaction processes without the hassle of getting to hold money physically. However, this does not necessarily mean that physical cash would completely be out of reach. In this vein, Akhalume and Ohiokha, (2012) are of the view that contrary to what is suggestive of the term, the cashless economy does not refer to an outright absence of cash transactions in the economy in question, but when the amount of cash-related transactions are reduced to a very large extent as possible. In such economies, transactions of any nature are predominantly carried out through electronic means: Automated Teller Machines (ATM) transfers, online banking and mobile applications, and other means like the use of cheques, direct bank transfers, mobile money transfer operations etc. In more advanced nations, the practice of cashless system is not new. The policy has been in existence for more than two (2) decades and it’s still gaining attention in both less developed and in emerging economies where there is strong advocacy for reduction in the use of cash in carrying out transactions. This is considered very imperative giving the implication of cost of printing notes on one hand, and on the other, the risks of various kinds and associated corruption. In countries where cashless policies are in place, the key drivers who serve as the regulators and implementers of the policy are usually the Central Banks, Deposit Money Banks (DMBs), Micro Finance Banks (MFBs) etc.
These are establishments that are charged with the responsibilities of carrying out regulatory activities including monitoring and evaluation of the policy on behalf of the government. In cashless economies, there are macroeconomic tools/strategies that are deployed from time to time, to implement the policies. Such tools by the Apex Banks could take the form of monetary policy, or fiscal policies. Monetary policy according to Jhingan, M.L (2016) refers to credit control measures adopted by the central bank of a country. It can also be referred to as the specific actions taken by the central bank to regulate the value, supply and cost of money in the economy with a view to achieving government’s macroeconomic objectives (Central Bank of Nigeria {CBN}, 2006). Fiscal policy on the other hand, is the use of government expenditure through taxation and other means to regulate inflow and outflow of monies in an economy. Above tools are generally carried out through any or more of the following depending on the policy direction of the government: Reserve Requirement (requires DMBs to hold a fraction of their deposit liabilities also known as reserves as vault cash and or deposits with it), Fractional Reserve (limits the amount of loans banks can make to the domestic economy and thus limit the supply of money), Open Market Operations usually otherwise known as OMO is another tool that is used. OMO is the buying and selling of securities on behalf of the Fiscal Authorities by the central bank.
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
3.2 RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
3.3 POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine assessing the effect of naira redesign policy on rural dwellers in Nigeria. Selected residents in Abak Local Government area of Akwa Ibom state form the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Introduction
It is important to ascertain that the objective of this study was to ascertain assessing the effect of naira redesign policy on rural dwellers in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the effect of naira redesign policy on rural dwellers in Nigeria.
Summary
This study was on the effect of naira redesign policy on rural dwellers in Nigeria. Three objectives were raised which included: To assess how rural dwellers in Nigeria are accepting and adopting the redesigned Naira in their daily financial transactions, to examine the impact of the Naira redesign policy on the financial literacy of rural dwellers and to analyze the economic disruptions, if any, caused by the introduction of the redesigned Naira in rural areas. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from selected residents in Abak local government area. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
In essence, the Naira redesign policy holds the potential to positively influence rural dwellers’ financial behaviors, economic activities, and perceptions. However, its success hinges on addressing challenges, strengthening financial literacy, and fostering trust in the new currency. By taking these lessons into account, policy-makers, financial institutions, and stakeholders can work collaboratively to ensure that rural communities reap the benefits of the redesigned Naira, contributing to their economic empowerment and overall well-being.
Recommendation
Based on the findings of the study assessing the impact of the Naira redesign policy on rural dwellers in Nigeria, several recommendations are proposed to address challenges and optimize the positive outcomes of the currency redesign within rural communities:
- Develop and implement comprehensive financial education campaigns tailored to rural dwellers. These campaigns should focus on explaining the reasons behind the currency redesign, highlighting the security features, and promoting a deeper understanding of the new Naira.
- Organize workshops, seminars, and community outreach programs in rural areas to ensure that information about the redesigned Naira reaches a wider audience. Engaging directly with communities can help dispel misconceptions and build trust in the new currency.
- Improve access to banking facilities, ATMs, and digital payment methods in rural areas. This will facilitate the adoption of the redesigned Naira and encourage rural dwellers to participate more actively in the formal financial system.
REFERECES
- Ailemien, A., (2022, November 23). Explainer: What to know about new naira notes. Business Day. Retrieved from https://businessday.ng/news/article/explainer-what-toknow-about-new-naira-notes/
- Akhalumeh, P.B., & Ohiokha, F., (2012). Nigeria’s Cashless Economy; The Imperatives. International Journal of Management & Business Studies 2, (2) 31-36.
- Ameh. (2023, March 2). Timeline: Naira redesign policy from inception to Supreme Court judgement. Premium Times. Retrieved from https://www.premiumtimesng.com/news/top-news/585737-timeline-naira-redesignpolicy-from-inception-to-supreme-court-judgement.html
- Bella & Oguntuase. (2023, March 6). Naira Redesign and Cashless Policy: Wither The Role Of Bank Neutral Cash Hubs? Mondaq.
- Central Bank of Nigeria. (2006). What is monetary Policy? CBN Monetary Policy Department Series 01
- Central Bank of Nigeria. (2022, October). Issuance of New Naira Banknotes. Press Remarks by the Governor of Central Bank of Nigeria. Retrieved from
- Central Bank of Nigeria. (2023, March). History of Nigerian Currency. Retrieved from https://www.cbn.gov.ng/currency/historycur.asp
- Ejiobih, C., Oni, A.A., Ayo, C.K., Bishung, J., Ajibade, A., Koyejo, O., & Olushola, A. (2019). Empirical Review of the Challenges of the Cashless Policy Implementation in Nigeria: A Cross-Sectional Research. Journal of Physics.: Conference Series, (1), 1299 012056.