THE NAIRA REDESIGN POLICY AND ITS IMPACT ON THE STUDENTS OF THE UNIVERSITY OF IBADAN (2022-2023)

INTRODUCTION

According to the National Youth Policy, there is a positive correlation between a country’s development and its youths’ responsible conduct and role[1]. Universities possess a high concentration any nation’s youthful population. By virtue of this, potential nation builders are produced in these higher institutions of learning. It is for this reason that their academic and personal welfare are to be properly considered when a government implements any policy which will affect them. In October 2022, the Central Bank of Nigeria announced that there would be a change in the nation’s currency’s design[2]. In effect, all old notes were to become illegal by the deadline which was fixed on the 8th of February 2023. It was expected that the new naira notes will be adequately circulated to meet the consequent demand for cash, however, the opposite was the case. The inability of the Central Bank of Nigeria to facilitate the exchange of new naira notes for the old ones as the deadline approached, led to a series of issues in the nation. In a frenzied manner, Nigerians rushed to deposit old naira notes in banks to obtain the new notes, leading to overcrowding in banks. With the ensuing cash crunch, frustration grew among the population as violent display of protest erupted in places such as Ibadan and Benin according to newspaper reports[3]. The Naira redesign policy’s effect was felt across all spectra of the Nigerian society and this included her youthful population. The University of Ibadan, an institution with a population of over 33 thousand[4], students serves as a good case study for understanding the policy’s impact. With a view to uncovering the experiences of a select group of students during the period of the policy’s implementation between October 2022 and February, 2023, this study seeks to reveal the said impact from the angle of academic and personal welfare.

AN OVERVIEW OF THE NAIRA REDESIGN POLICY 

According to global best practices, a country’s currency ought to be changed periodically between every 5 to 8 years[5]. Various nations have in place a system of currency change which takes place at various yearly intervals. The year 2022 makes it more than 20 years since Nigeria last redesigned her currency, the Naira[6]. The redesign consisted of a change in the coloration of the 200, 500 and 1000 naira denominations. The policy was intended to help in solving various economic problems facing Nigeria. These issues include the low exchange rate of the naira in the foreign exchange market, increasing currency counterfeiting, hoarding of cash and inflation[7]. In order to ensure that the populace abide by the CBN directive, banks were asked to operate into the weekends to attend to waves of customers coming in. A transaction limit was also set to restrict the amount which could be withdrawn by corporate bodies as well as individuals[8].

GENERAL IMPACT OF THE POLICY

The fear of being sanctioned and the overcrowding of banks sparked a rush in many Nigerians to quickly deposit their monies in banks. There were reported cases of retailers rejecting the old naira notes for transactions. The sight of the country was characterized by pockets of chaos and unrests, a direct display of frustration which the policy occasioned. According to a 2022 Multidimensional Poverty Index (MPI) survey, 63% of Nigerians (133 million) are multidimensionally poor[9] and a considerable percentage depended on wages or daily payment. Point of Sale (POS) operators charged exorbitant fees for cash withdrawals as they became a vital alternative to banks. There were also cases of cash buying whereby the new naira notes are purchased at high prices, a testament to the desperate situation created by policy. As such, Inaccessibility of cash hindered the survival of ordinary citizens. As a consequence of this policy, electronic transactions became an increasingly popular alternative to cash payment due to the scarcity of cash. Despite that, the unbanked population were more affected and in extreme cases, the policy indirectly led to deaths.

THE POLICY’S IMPACT ON STUDENTS OF THE UNIVERSITY OF IBADAN

Findings from oral interviews reveal that the Naira redesign policy was perceived negatively by students of the University of Ibadan with varying degrees of impact. Three students were interviewed, each sharing their experiences during the duration of the policy’s implementation.

ACADEMIC WELFARE

The primary purpose of the students in a university is to learn. The knowledge acquired during their years of study will contribute not only to their personal growth, but potentially, to the growth of their nations. This is why the academic welfare of students is vital. The government of any nation is expected to put into consideration, the possible academic impact of its policies, either negative or positive. Information gathered from the interviewees indicate that the policy contributed to jeopardizing some of their academic activities and routine.

When asked to describe whether the Naira redesign policy affected his academic welfare, Victor, a student at the University of Ibadan expressed that, “not particularly, however, it made me late for meeting the deadline when it came to printing assignment”. Similarly, another student, Elizabeth, noted that she usually depends on the internet to source for information about her course and also to do research for his assignments. In her words, “everything was stagnant, buying data proved futile”, and without data, internet connectivity is unachievable. Another student, Eniolorunda, decried the policy’s effect on his academic welfare. According to him the inability to access cash and the network issues preventing electronic transactions deprived him of his ability to feed himself. He said that, “an hungry body is an hungry mind. If I’m unable to get food I will just close my books without reading them.” Although, it was not recorded that the overall outcome of their academic performance was significantly dented, it is probable that a continuation of the policy would have aggravated the increasingly worsening situation.

PERSONAL WELFARE

Of equal importance, besides academic welfare is the personal welfare of the students. The well-being of students, that is, their ability to satisfy their social, physical and mental needs, have a great impact on their academic success[10]. Based on the results from interviews conducted, students of the University of Ibadan expressed the discomfort faced during the cash crunch.

For Victor, his daily routine became more difficult to get by. He expressed that there was high demand for cash despite its scarcity, and this led to him being turned down by shops as they do not accept electronic cash transfer. Also, commuting became difficult as commercial drivers requested for cash payment only. A not so different experience was narrated by Elizabeth. She lamented her inability to purchase things she needed due to a lack of cash and network issues associated with electronic transfers. “I couldn’t purchase goods, network services were down and as such, transfers couldn’t be made or were delayed”, this was the response to how the policy affected her personally. It shows the level of difficulty students faced as a result of inaccessibility of cash. Some, such as Victor, had to manage the situation and adjust. This meant a temporary change in lifestyle and as he put it, “it affected the meals I could eat, the places I could go to and the kind of things I could buy, the shops I could visit and my daily engagements too, it hampered social life”. He even mentioned that he knew students who lived off campus that could not come to school due to the situation. Eniolorunda expressed similar displeasure at the effect of the policy as it pertained to his personal welfare when he said that “I was constrained and didn’t have cash and in a way, I was almost mentally affected”. It is evident from his experience that the cash crunch was beginning to take a toll on his metal health.

GLOBAL CONTEXT AND RECOMMENDATIONS

In 2016, India illegalized her 500 and 1000 rupee notes which amounted to 86% of her total currency in circulation[11]. The justification for this was to revamp her economy by preventing tax evasion, counterfeiting, human trafficking and terrorism. Despite the introduction of new 500 and 2000 rupees notes, the policy proved chaotic for the Indian populace with the socio-economic situation similar to the Nigerian experience. Perhaps, Nigeria could have avoided an unpleasant occurrence had she considered this historical precedent. Although, in theory, the naira redesign policy seems plausible, findings from sources cited and the oral interviews prove otherwise. It is therefore recommended that governments should take a cue from past occurrences before implementing policies. Policies should be test run before full implementation to understand the potential extent of their impact and to determine either to continue or disembark.

CONCLUSION

The interviewees’ experiences reveal just how much negative impact the policy had on their academic and personal welfare. The scarcity of cash and the poor internet service resulting from overloading of the networks prevented the smooth conduct of online transactions. POS (Point of Sale) operators also placed high premium on cash withdrawals as they took advantage of the cash scarcity to exploit the populace. The policy directly altered their daily engagements and threatened their academic welfare by placing them under unnecessary stress, pressure and restrictions.

BIBLIOGRAPHY

[1]  Idike, Adeline, and Okechukwu Innocent Eme. “Role of the Youths in Nation Building.” Journal of Policy and Development Studies 9, no. 5 (2015): 50–71. https://doi.org/10.12816/0018243.

[2] Central Bank of Nigeria | FREQUENTLY ASKED QUESTIONS AND ANSWERS ON NAIRA REDESIGN . Accessed July 1, 2023. https://www.cbn.gov.ng/Out/2022/CCD/Naira_Redesign.pdf.

[3] “Protests in Oyo, Delta, Edo over Naira Scarcity, Bank Atms Destroyed.” Channels Television . Accessed July 1, 2023. https://www.google.com/amp/s/www.channelstv.com/2023/02/15/protests-in-oyo-delta-edo-over-naira-scarcity-bank-atms-destroyed/amp/.

[4]  “University of Ibadan .” NHEF(The Nigeria Higher Education Foundation) . Accessed July 1, 2023. https://www.thenhef.org/partner-universities/university-of-ibadan/#:~:text=Founded%20in%201948%2C%20University%20of,alumni%20in%20160%20countries%20worldwide.

[5] Pillah , Tyodzer; Patrick. “Currency Redesign and Monetary Policy of Nigeria: An Evaluation.” International Journal of Public Administration and Management Research (IJPAMR 8, no. 4 (2023): 46–53. – https://sdbindex.com/Sourceid/00000429, google scholar, etc.

[6] Pillah , Tyodzer; Patrick. “Currency Redesign and Monetary Policy of Nigeria: An Evaluation.”

[7] Olujobi, Oluwatosin. “Macroeconomic Implications of the New Currency Refurbishment and Capital Formation in Nigeria.” Munich Personal RePEc Archive, December 12, 2022. https://mpra.ub.uni-muenchen.de/115634/.

[8] Central Bank of Nigeria | Home. Accessed July 1, 2023. https://www.cbn.gov.ng/Out/2022/CCD/ReNairaRedesignPolicyRevisedWithdrawal.pdf.

[9]  “About: National Bureau of Statistics.” About | National Bureau of Statistics. Accessed July 1, 2023. https://nigerianstat.gov.ng/news/78#:~:text=In%20Nigeria%2C%2040.1%25%20of%20people,of%20people%20in%20urban%20areas.

[10]  “Student Welfare.” WISE Project. Accessed July 1, 2023. http://www.wise-project.eu/student-welfare/.

[11] Rowlatt, Justin. “Why India Wiped out 86% of Its Cash Overnight.” BBC, November 14, 2016. https://www.google.com/amp/s/www.bbc.com/news/world-asia-india-37974423.amp.