A fiscal policy partner and Africa tax leader at PricewaterhouseCoopers (PwC), Taiwo Oyedele, has said that currency restrictions is not the solution to illicit cash in the hands of criminals or corrupt persons in Nigeria.
Oyedele was reacting to the ongoing old currency swap policy by the Central Bank of Nigeria (CBN).
In a series of threads on Twitter, the author of Insights on Taxation and Fiscal Policy said illicit cash is best tracked and controlled through financial intelligence than currency restriction or scarcity.
According to him, a more effective strategy would be to make e-payments easy and attractive, while government should supply as much Naira notes as are necessary.
He also called on government to leverage on intelligence to identify and punish criminals with illicit funds.
He wrote, “Many countries embrace electronic payments and minimal use of cash not because their currencies are scarce, or they do so to avoid penalties but because their economies run on credit and e-payment is more convenient, safer and incentivised than cash.
“As it turns out, Nigeria actually has one of the lowest amount of currencies in circulation relative to GDP or per capita of N15,200 (about $34) compared to the U.S. at $6,700 per capita, UK at £1,200 per capita and the Eurozone at €3,600 per capita.
“Therefore, the real problem with Naira in circulation is the illicit cash in the hands of corrupt persons and other criminals which is best tracked and controlled through financial intelligence than currency restriction or scarcity.”
Therefore, the real problem with Naira in circulation is the illicit cash in the hands of corrupt persons and other criminals which is best tracked and controlled through financial intelligence than currency restriction or scarcity.
— Taiwo Oyedele (@taiwoyedele) January 29, 2023
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