Naira Redesign Policy and Socio-Economic Development in Benue State

Abstract

The study examined the impact of naira redesign policy on the economy of Benue State. The study adopted a survey design with a sample size of 400 respondents selected for the study. Questionnaire and Key Informant Interview (KII) was used as instruments of data collection. Decisionmaking theory was adopted as the theoretical framework for the study. The findings of the study showed that the naira redesign policy fell short of its goals due to a lack of public confidence in digital financial products, which is mainly due to perceptions of high levels of fraud associated with them and coupled with poor sensitization particularly of the CBN's directives and deadlines. Additionally,the digital financial infrastructure 
was insufficient to handle the increased digital transaction volume caused by the cash shortage. The study also found that the policy negatively impacted several livelihoods in Benue State resulting into negative impacts on the financial welfare as Point of Sale (POS) operators charged exorbitant fees for cash withdrawal as they became a vital alternative to banks. There were also cases of cash trading whereby the new naira notes were purchased at high prices, a testament to the desperate situation created by the policy. The study also discovered that small businesses were worse hit by the cash crunch due to the naira redesign policy because they rely heavily on cash to carry out their activities.The study recommends that there is the need to intensify the public enlightenment programme about the cashless system so that everybody will be acquainted with the system, since there is a high rate of illiteracy. The Central Bank of Nigeria should also give a long time for the retrieving of the old currency designed to the new currency redesigned so that small businesses would not astronomically lose their customers base.