Welcome timelines

Editorial

Nigeria’s economic challenge has aggravated in the past two months, because of the coronavirus pandemic. Individuals and the organised private sector (OPS) have been impacted negatively, and governments and their agencies are introducing measures to alleviate the impact.

The Central Bank of Nigeria (CBN), after the last meeting of the Monetary Policy Committee, announced measures to stimulate growth and, hopefully, stave off another economic recession.

Some of the measures are aimed at making things better for the individuals and the OPS. Of note, during the lockdown, e-payment, through various electronic channels, became the major tool for financial transactions.

Perhaps, because of the huge volumes, many users were left weeping and gnashing their teeth, as many of such transactions were trapped on the channels, after debiting accounts.

Since the lockdown was partially lifted, Nigerians have been trooping to the banks, to resolve the hanging transactions.

Last week, the CBN came up with new timelines for the resolution of uncompleted transactions on the electronic channels.

Effective this month, reversal of failed Automated Teller Machines (ATM) transactions, where customers use bank cards, should be immediate, instead of the present three days’ timeline.

Where immediate reversal is impossible because of technical hitches, the manual procedure must not last beyond 24 hours.

Where the customer used his ATM on another bank, the reversal must be effected within 48 hours, instead of the present three to five days.

The CBN also reduced the timeline for failed POS and Web transactions, from five days to 72 hours.

We are surprised at the mountain of failed transactions during the lockdown, so the CBN’s new timelines should be strictly adhered to.

Those uncompleted transactions gave Nigerians a lot of stress. While the individuals worry about their funds hanging on electronic channels, businesses worry about the run-away interest rates on borrowed funds.

With businesses negatively reeling from the pandemic, the OPS, while praising the CBN for reducing the Monetary Policy Rate (MPR) from 13.5 per cent to 12.5 per cent, urged the apex bank to also cut down the Cash Reserve Ratio (CRR) which it retained at 22.7 per cent, as well as the Liquidity Ratio which remains at 30 per cent.

The OPS which made the call included the Manufacturers Association of Nigeria (MAN), the Nigeria Employers’ Consultative Association (NECA) and the Lagos Chamber of Commerce and Industry (LCCI).

They further urged the apex bank to prevail on commercial banks to scale down interest rates on credit facilities.

The call is appropriate at this period, so that businesses which are in difficult times can revitalise. If that happens, both those who have borrowed and those who wish to borrow will benefit.

The OPS argued that reduced interest rate will help struggling businesses to stay afloat. No doubt, businesses require all the stimulus they can get to stay afloat so as to save jobs.

As things stand, many Nigerians are already unemployed, and unless stimulus packages are made available to businesses, many more would lose their jobs.

We also agree that some of the greatest challenges facing the OPS are the dearth of infrastructure as well as inflationary pressure.

While urging banks to reduce their lending rates, it must be noted that they may not be able to lend below the rate of inflation.

Again, with businesses challenged by basic infrastructure, like electricity, the cost of doing business will continue to rise.

So, the fiscal and monetary policies of government must seek ways to contain these dragons roaring to upend the economic recovery plans, post the coronavirus pandemic.