LCCI advises CBN to convert lower currency notes to coins

By Godfrey Ofurum

The Lagos Chamber of Commerce and Industry (LCCI) has advised the Central Bank of Nigeria (CBN) to  consider converting the country’s lower currency notes into coins to facilitate highly repetitive retail transactions and to avoid printing pieces of low-value notes with a short lifespan.

Michael Olawale-Cole, president of the chamber, gave the advice at the ongoing trade fair, where he appealed to the CBN to adopt more innovative ways, establish appropriate policies and take actions that will drive down the inflation rate and strengthen the value of the Naira.

The LCCI boss noted that  the country was facing an extremely challenging environment, where inflation is being driven by a range of different shocks.

“Inflation rate as at September 2022, has surged to 20.77 percent and looking ahead, the short to medium-term inflation outlook presents clear upside risks in the context of extraordinary uncertainty in the economy.

“The depreciation of the naira has also added to the build-up of inflationary pressures. price pressures are evident in more and more economic sectors, in part owing largely to the impact of high energy costs feeding through the whole economy.

Growth in the Nigerian economy is estimated to have slowed down in the third quarter, with IMF projections lowered by –0.2 percent points to 3.2 percent in their world economic outlook update of October 2022.

Amid heightened economic uncertainties, Olawale-Cole emphasised that  it was important to note that the Nigerian financial market has remained resilient and stable with capital adequacy ratio (CAR) and the liquidity ratio (LR) at 13.4 percent and 40.1percent respectively which are above the prudential limits.

“Also, non-performing loans (NPLs) improved slightly at 4.8 percent, below the five percent regulatory threshold.

The chamber urged the monetary authorities to maintain a stern look at all the crucial indicators to mitigate risks and threats facing the economy.

“In challenging times like this,  CBN has remained loyal to its mandate, to ensure price stability. Though, the decisions to bring inflation back down may be difficult but the consequences of letting too-high inflation become entrenched, would be much worse for everyone.  We expect the CBN to work towards controlling the driving forces of the major economic indicators to drive better economic performance in the months and quarters ahead”.