 The Supreme Court of Nigeria has restrained the federal government from implementing the February 10th deadline of the old 200, 501,000 Nara notes to stop being legal tender. Three northern states, including Kaduna, Kogi and Zampera, had an emotional ex-party filed on February 3rd, prior to April's courts to host the CBN Nara redesign policy. A seven-month panel of the Supreme Court, led by Justice John Okoro, in a unanimous ruling, granted an interim injunction restraining the federal government, the central bank and commercial banks, and all this from implementing the February 10th deadline for the old 200, 500, and 1,000 Nara notes to stop being legal tender. Nara's Nara redesign policy vides harder the scarcity of the new notes continuous to disrupt business activities in markets, restaurants, banks and major sales outlets across Nigeria. But the state of the economy vis-à-vis the Nara crunch and its effect is our focus on the show. Welcome to Business Insights and Plus TV Africa. I am Justin at Kaduna. First off, the Lagos state government says 27.3% of its entire 2023 budget amounted to 482.6 billion Nara or bespent on modern infrastructure. Commissioner for Economic Planning and Budget Samuel Igube announced this at a press conference in the Laosa Ikeja. Let's take that report. This briefing paves the way for further analysis of the Lagos state's 2023 budget by officials led by the Commission of Economic Planning and Budget Sam Igube. Christianed budget of continuity, Igube said it was prepared to continue the good works of the Babajidi Sawulu administration. The commissioner explained that 13% of the budget is allocated for provision of affordable and world-class education, healthcare and social services to make the system accessible and affordable for the teaming populace. The aspiration is that Lagos will have reliable and sufficient infrastructure that meets the needs of a 21th century city. The state is totally committed to ensuring that we grow our stock of infrastructure in transportation, in education, health, technology, food processing and sports, amongst others. Igube further gave a breakdown of the budget analysis. We have allocated a total of 552 billion in human capital development representing 31% of the total budget. Included in this is the budget for education of 157 billion, health 149 billion, our personnel costs 228 billion and various other social interventions of about 18 billion. The commissioners for health, education, finance, transportation, works and infrastructure spoke on areas that affect them. We intend to improve government services because government revenue is not just about taxes. When we improve government services, government can charge on its services to the people and people will be happy to pay because they are getting value for money. We are planning to continue to invest in technology in schools. We are planning to continue to build up our science labs, sports facilities and so on and continue training our teachers. Projects like regional road will still continue and we hope that by the grace of God, we should be able to finish that end of this year. Projects like my weekly shower will also try to round off that. The 1.76 trillion euro 2023 budget is made up of 1.020 trillion euro for capital expenditure and 748.097 billion euro for the current expenditure, including debt servicing. Our total revenue dependent budget is estimated at 1.418 trillion euro while the deficit funding requirement is 350.411 billion euro. So welcome back. In the midst of the operational challenges being faced by small businesses, especially in rural areas, a survey showed that point of sale transaction charges jumped 400% in most cities across the country last week. Now the impact of the civilian policy and its attendant cares have frustrated efforts by many Nigerians operating in the nation's cash dependent informal economy to do business, make payment and enjoy certain services. I shall now show you to our ease of business advisory, financial and customer experience consultant who are 25 years working experience in various sectors of the Nigerian economy including banking, ICT, manufacturing, oil and gas and hospitality. He joins us now on this discuss. Many thanks for joining us, Shegu, on Business Insight and Plus TV Africa. Good evening, viewers. Okay, let's start with you, Shegu. How have you been faring concerning cash transactions around your locality? Well, I mean, I think I would be the wrong demographic to explore in this regard because long ago, long before this policy, I had gone cashless personally and I know quite a number of people in my circles have also done the same. So I rarely pay for anything with cash. You would rarely find me with more than maybe 1000 to 2000 dollars of cash at any point in time. You know, because there are so many other ways of paying for almost everything including paying your father, your organizer, you can't pay with transport. So I'm not affected, you know, I've just been honest. But when looking around here, looking at, you know, the people around me and the experiences that we've seen, it's obviously been a harrowing experience for Nigeria. It's terrible, it's been terrible. People cannot have access to the money that they have in the bank and so what did Joakim say that for the first time, they now understand when accountants write cash in bank, cash at bank, and that's what's cash in hand, that they now know the clear stark difference because you can have money in your bank and start debt in Nigeria, you know. And that's where we are now. So we're in a crisis, really, and we hope that the government can solve this as quickly as possible. All right, Shagu, one question that is on the mind of most Nigerians is about, you know, making payment for the littlest of transaction. You said that over time, you have gone cashless, but in as much as you have, some people are saying that they go to the open markets to buy simple groceries and the market woman is saying that she does not have a bank account and she cannot really accept them transfers. And others who have bank accounts are actually asking you to pay for the POS fees, which have almost gone high as much as 400% in the past week. How do you explain all of this? I have to take an unpopular stance, Justin. I really have to because I think that much as this situation is creating a lot of heartache and pain for ordinary Nigerians. But I think it also has to be said that Nigerians can be very notorious with embracing change, with embracing regulation, even when the regulation is good, you know. This cashless thing that we're talking about started way back in 2014, if I'm not mistaken, was in 2012. When the CBSS started the pilot in the Lagos and Poja, you know. And so what have people been doing between that time? We're talking eight, ten years ago, right? And I tell you, you know what, no matter what you're trying to buy, just no matter what you're trying to buy, you can't pay with transfers and POS transactions in this country to pay regardless of what it is, including buying and purchasing things in the market. I think the only exception are low-value transactions like bus fares. So how can you transfer money to pay bus conductors, for example? And a couple of other things like that. But pretty much I think 90 to 95% of the transaction, the average transaction set of the average Nigerian can be conducted electronically, but Nigerians have refused to adopt. I think I would use the word refused because the process of opening accounts has been openly simplified by the banking industry. All you need is to present yourself and they'll take a passport photograph, they'll take a picture of you with their own camera, and they'll give you an account number. So I think in as much as things are very, very tough for people, we also need to remind people, you know, let them go and open accounts. Let's do it and then let the system fail and then we say, go, we're trying to do transfers and it's not working. But are people even trying? We have to move our country away from this heavy dependence on cash. It's not good for us. All right, Shagou, I understand the position that you have taken. Even our Greek stakeholders are also lamenting about the impact of this cash crunch on this sector. Do we have elections in less than two weeks? And the dependent national electoral commission wasn't in use, you know, and that's Yakubu and he was saying that the cash crunch is also affecting, you know, their own processing of the election as it were. So if an organization that uses organizers and they can't complain, don't you think that the CBN should have given a bit of a buffer as it were? I mean, look, don't even get me going with the issue of the CBN and how this thing has turned out because I'm extremely upset. I think that the CBN and I've said this time and again in the public domain that the CBN has not covered themselves in glory at all with regards to the implementation of this good policy. Look, the policy is good, but the implementation has been shambolic. The implementation has been disastrous. You know, let's be honest, the timeframe that the central bank gave at the initial was they set themselves up to fail. You cannot do a currency redesign and swap the entirety of trillions of currency notes in circulation in a 90-day period. It's impossible. And that's what we're seeing now. You know, so I think that what has happened is that there's been an unfortunate mix of monetary policy and politics. And that's where we are, you know, because I don't understand why if they wanted to swap currency maybe to prevent both buying that they couldn't have started earlier than they did, you know. So it's all, the CBN hasn't really done well. I never say what they're saying, of course they have a point because there are certain parts of their processes that will have to be by necessity are transacted with cash. You know, so that obviously they would also be affected to a certain degree, but I think, you know, their problem is probably not at the top of the list of problems we have with regards to this cash policy. I think it's just that the average Nigerian is going through a terrible time, you know, just going about their normal day-to-day living. It's been terrible for Nigerians and the government, I keep saying the government really has to do something about this. All right, still talking about the impact of this and cash crunch on Nigerians. The Association of Mobile Money and Bank Agents of Nigeria, that is Amban, is in the news and they are lamenting the Naira scarcity and they said specifically that 80% of POS operators are out of business as a result of all of this. How do you react to that, Shego? I mean, look, these are the things that, again, the CBN simply didn't take into consideration when they were rolling out their timelines. I keep saying that the policy itself is not a problem, it's the implementation. Yeah, they're absolutely correct and the evidence is out there. You can see it with your own eyes, you can touch it and feel it. You go to the average POS operator, it's either they do not have cash at all or that they don't have enough to service the demand that they're currently facing. You know, so clearly, you know, business is suffering, the economy is suffering, business activity has been stunted significantly in the last week and a half and I think that we're going to see maybe a slight impact of this, you know, on GDP numbers. I won't be surprised if this impacts the GDP numbers for this quarter, for example. You know, so really the CBN didn't think about this, they didn't think it through, they didn't look at the entire logistic chain right from their own vault to the last mile of ATM, either ATMs or US operators or over-the-counter cash withdrawals by customers. All hope is not lost. I think that the CBN can still ramp up their efforts to distribute the currency, assuming that the two have those nodes in their custody, assuming that the adequate number of nodes have been produced by Nigeria security pointing and meeting cooperation, you know. So if they have enough nodes, then, you know, I think within the next week or maybe two weeks, they should be able to ramp up their logistic operations, find creative ways of getting this cash into people's pockets, you know, through banks and POS operators and all of that. All right, Shagu, I want to believe that CBN is surrounded by economists and money market operators and all of that. They should understand how it actually works. I don't know, let me just put it in a lay term. Shouldn't they be aware of the exact amount of money on the average that Nigerians should spend or should or do spend? Because I don't understand how they have come out with a new policy. At the end of the day, even the banks themselves are claiming or are alleging not to really have this new nodes. How come? What exactly is wrong here? You know, we really don't know what to believe anymore. And we live in a society where impunity is in the major part of our culture as a society. It would appear from the evidence that is available to observers that the CBN has provided the volume of cash that they intended to provide originally. So their intention was to muck up about 2.5, there are about trillionaires that was out of circulation and bring it in. And then because they tried to use this policy to drive the cashless policy and encourage people to go electronic, their intention was to not release that same amount back into the system in new nodes. So for what appears to be happening is that the nodes that are being released by the CBN to the commercial banks are not getting into the ATMs and are not getting paid over the counter. They're ending up right back where the old nodes were in people's bedrooms, in people's toilets, in private vaults, in people's houses. And when I say people, I mean politicians. So it looks as if what we're having, what's playing out right now is an unfortunate mix of full planning, point of implementation of the part of the CBN and let me call it sabotage on the part of the political class because of the election that is coming up very soon. So it's a really, really unfortunate that at the end of the day, the people that are suffering and bearing the brunt of all of this, they have been Nigerian like you and I, sadly. So I think that's what's happening. I think that the politicians have played a major role in the crisis we have on our hands. And I want to say, like I said elsewhere this morning, I'm calling on the president to be firm and to be strong in calling out this people. This culture of impunity must stop. I think people that are connected and that understand what's going on, know it's this money that we can bring them out. But it will take some serious, strong will on the part of the president or maybe the better arguments to achieve that. All right, it's still business insights on plus TV Africa. We still have a Shagu Shukritan with us, an economist that will take a quick break and when we'll come back, we'll be looking at how prepared is Nigeria for this online transactions because over time, a lot of people are complaining about bank apps not working. In a moment, we'll be right back, don't go away. All right, welcome back. It's still business insights on plus TV Africa and we have a Shagu Shukritan with us, an economist and we are looking at the Naira cron scarcity of the new note that Nigerians are actually feeling the harsh impact. And Shagu, the issue right now is that most people are complaining about this making transfers successfully. Even the bank apps are seemingly having issues. Are we putting the cart before the horse as it is? No, I don't think we're putting the cart before the horse. I think that the horse has been sitting very well placed right in front of the cart for 80 years. And unfortunately, the horse is not dragging the cart along fast enough to use the analogy. So what's happening is, it might be, and I say this in many respects, an industry insider, is that the banking industry has a peculiar problem. The Nigeria society has a not so peculiar problem. The Nigerian society has infrastructure challenges. We've got challenges with power in particular and we've got challenges with data access, broadband penetration and all of that. Of course, these things would have some sort of a bearing on the capacity of the financial service providers to meet the demand that this policy would place on their networks, on their infrastructure. However, the banking industry, I must say, have had this, shall I say, tendency to seek to maximize profits and minimize cost centers, even if those two objectives would impact on either customer service or on operational efficiency. So what we have today is that banks and it's not limited to just the banking industry. I think that a lot of service providers in this country, including for example, the network operators, the telephone network operators, what they tend to do is they invest as little as they possibly can to maintain the minimal level of service quality that they can get away with, right? Such that as the pressure of usage of their networks increase, they increase investment marginally to cater for that increment in the pressure on their infrastructure. What that does is that your networks are constantly and consistently operating right at the edges of stability. So all it will take is just a little stress and a little push in terms of additional demand on those services for the services to collapse. So the banking industry has not done enough, in my opinion, in ensuring that the infrastructure that drives electronic banking is robust enough and has adequate redundancies built into them to ensure that they don't fail, that the number of failed transactions is limited, the banking industry needs to do better and they will not. So I have had course to say that the central bank is feeling woefully in its regulatory authority and responsibility in dealing with this specific problem. In the area of customer service and in the area of infrastructure capacity, the banks are not doing enough. So what we're now having is that the central bank of Nigeria is trying to drive people away from cash into electronic transactions, but the capacity of the infrastructure that the banks have invested in is inadequate to carry it. So now you are beginning to see a greater incidence of failed transactions. I have personally experienced it. I told you earlier, I've been doing transfers and electronic transactions and using my ATMs and all that paper for years. But in the last week and a half, I've experienced a significant increase in failed transfers and failed transactions. They still work, get me wrong. But the failure rate has increased because the demand of the services have increased. But the bank is doing better. All right, Shago, in person you talked about how the impact would be on the country's gross domestic and product GDP. Let's be specific and talk about the financial services sector because some banks are not really opening to customers to transact them over the counter. Some banks' machines or their terminals have been vandalized that. How do you see this whole transaction or this whole policy on the GDP of the financial sector this quarter? Yeah, I mean, it's not just the GDP of the financial sector. So certainly, like you said, I spoke with some of my banking service providers earlier last week. This was last week. This Wednesday morning, this was the third day of their last week. And they told me categorically that they couldn't open their bank, they couldn't open their banking up to customers just for fear of being assaulted. So that's one week ago. Now imagine the volume of transactions that have been lost as a result of their inability to open for services. Imagine the volume of transactions that have been lost as a result of the fact that they cannot meet the cash withdrawal requests or demand from their customers. Imagine the volume of transactions. Now, when you now look at the multiplier effect of that across other sectors of the economy, what you basically have is the economy has kind of ground to evolve as far as the informal economy is concerned. Of course, at the top of the ladder, large corporate organizations and high net worth individuals and maybe whatever we have left of the middle class, yeah, they're still transacting their merry way along. But when you factor in the fact that it's been said that 60% of our entire economy is probably run in the informal sector, then you will understand how impactful this would be on the quality of the economy. So, yeah, it remains to be seen. We'll see the GDP report and we'll know how this is done. All right, thank you so much, and Shed, we should return for your time. We do appreciate it. Thanks for having me. All right, the Supreme Court has actually given Nigerian some extra days. We'll see how that plays out and we'll give you more update as the days go. Well, that's the size of the show for this week. I am Justin Alcador, and I'll see you again next time.