This is a phrase I grew up hearing usually when there is a business or investment opportunity. Often times the person with the amount in cash always has a better chance of getting the deal. In some cases, he or she is even able to negotiate a further discount.
However, events in the last couple of weeks brought the definition more alive to me as the whole nation grapples with a cash crunch in view of the naira redesign policy. Though not a bad policy as the global best practice is for central banks to redesign, produce and circulate new local legal tender every five to eight years.
The CBN governor had set out the following as the objectives of the Naira redesign policy: to reduce the portion of money in circulation outside the banking system, to increase the supply of clean notes, to make monetary policy more efficacious, to limit counterfeiting of the Naira, to deepen the cashless policy and to support the security forces in fighting terrorism and ransom taking.
Laudable as the objectives might seem, there has been widespread criticism of the implementation and timing as cash has become a scarce commodity. The scarcity has caused people to speculate on cash and POS operators have been ‘making a kill’. There have been melodrama at the banks with some customers stripping naked in hope that their desperate act will produce the cash they need.
It’s been an unpleasant experience for most people, although the scarcity has been able to curb the abuse of the naira through spraying at parties. There have also been unending queues at the ATM and POS stand. Rationing has been the order of the day as the available cash isn’t sufficient to meet everyone’s request.
Sadly, the petrol scarcity which has also lingered for about four (4) months has further exacerbated the cash crunch as petrol stations were only accepting cash as opposed to payments through debit cards. In this era of cash and fuel scarcity, a scented smell of petrol is definitely the way to smell expensive, and not just by wearing a designer perfume.
Someone conducted a Valentine’s Day survey on people’s preferred gift choice between; a box of chocolate, a bouquet of flowers, and a bundle of cash. I’m sure your guess is as good as mine as most of the respondents chose ‘bundle of cash’ as what they would love for a valentine gift.
So, the myriad of events in recent times has further defined the phrase ‘Cash is King’. Cash represents liquidity and speaks of money that is available for immediate disbursement. Apart from the attractive feature of liquidity, the time value of money is an additional feature of cash. While the phrase ‘cash is king’ doesn’t necessarily speak to physical cash but any investment or savings that are near cash and which affords immediate accessibility. However, in the case of Nigeria and at the moment, the phrase can be taken literally as physical cash is King.
In other not to be subjected to untold hardship, it’s not enough to have money in an account, one must have money that can easily be accessed and utilized.
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