Naira Scarcity: Zamfara govt threatens to revoke land ownership of banks

Zamfara Government threatens to revoke Land Ownership of Banks

The Zamfara State Government of Nigeria has issued a stern warning to banks operating in the state to lift the naira scarcity or face revoke of ownership of land allocated to them.

The Zamfara Deputy Governor Alhaji Ibrahim Wakkala made the warning during an event to mark 2020 Children’s Day at the Police Children’s School in Gusau. Wakkala pointed out that the naira crisis had lingered for too long and the banks should be part of providing solutions instead of compounding the difficulties of the people.

Effects of Naira Scarcity on Zamfara State

The scarcity of naira within Zamfara State has had a wide-ranging impact on the state’s economy. Some of the impacts include:

• Increasing Inflation Rate: As prices of goods and services increase due to limited availability of naira, inflation rate increases as well.
• Reduction in business activities: Due to state of naira scarcity, businesses, especially small business owners, are finding it harder to function as it becomes difficult to purchase necessary materials. Hence, leading to decline in business activities.
• Employment Crisis: As businesses struggle to stay afloat and are unable to expand, there is reduced availability of jobs, leading to increase in unemployment rate.

Reasons for Naira Scarcity

The naira crisis in Zamfara State is primarily a result of reduced availability of the local currency due to inadequate liquidity. Some of the causes of this situation are:

• Currency Swap Program: The Central Bank of Nigeria’s Currency Swap Program increased the demand for hard currency, leading to a decline in availability of naira.
• High Demand for Foreign Currency: The demand for foreign currencies such as Dollar and Pound remained high despite the weak naira, adding more strain on local currency.
• Depleted Foreign Reserves: Zimbabwe’s depleted foreign reserves hindered the Central Bank from supplying naira to the market to meet up with the demand.

The Zamfara State Government has also identified persistent hoarding of money and cash lodgments into various accounts as some of the other factors responsible for the naira crisis. The government is therefore urging the banks to improve the liquidity of naira quickly or face consequences.
Zamfara State Government in Nigeria has recently threatened to take back land previously allocated to banks in the state if they do not deposit money in its account. This is in response to the scarcity of Naira in circulation in the state, which has crippled business activities.

The state used part of its internally generated revenue to purchase $25m from the Central Bank of Nigeria (CBN). Their hope was that the money would be deposited with the banks in the state to address the Naira liquidity crisis and stimulate economic activities. However, according to Emir of Zauzau Dr. Mahmoud Hassan Shinkafi, most of these banks have failed to respond despite continued appeals from the State Government.

The Emir’s spokesperson Garba Muhammad confirmed that the government is now threatening to revoke these banks' leases on land if they fail to respond. He further reported that the government has asked these banks to return the money they have withdrawn from their accounts, to enable businesses begin operating again.

The Zamfara state government is taking this action to demonstrate its commitment to protecting and promoting the interests of the citizens. It is encouraging banks to respond to the Naira crisis and demonstrate their commitment to the progress of the business communities in the state.

The Zamfara state government is determined to revive economic activities in the state, and has warned that if no measures are taken to replenish the Naira in circulation, it will explore all means available to ensure its economic prosperity.

According to Governor Bello Matawalle, “The government will ensure that the rights and privileges of our citizens are not denied, and that activities that could further enrich the state with resources that would benefit the citizens are not disrupted.” He added that the government is willing to work with the banks in order to find a lasting solution to the Naira crisis.

As the Zamfara state government wages a battle against the scarcity of Naira, the banking sector is facing pressure to take the necessary steps to restore normalcy. Citizens of Zamfara are counting on their government to find a resolution to the current Naira crisis, and it remains to be seen if the threatened loss of property will spur these banks into action.