Financial scarcity, psychological well-being and perceptions: an evaluation of the Nigerian currency redesign policy outcomes

Abstract

Background The relationship between insufficient financial resources and psychological health has been extensively studied and established in various contexts. However, there remains uncertainty regarding the potential impact of the Nigerian naira currency redesign policy on the psychological well-being of Nigerians. This policy, which aimed to demonetize the economy and promote economic stability, involved changes to the physical appearance of some naira denominations (200, 500 and 1000). Understanding the effects of this policy on psychological health is essential for evaluating its overall societal impact and identifying potential areas for improvement in future currency redesign initiatives. Methods The study is a cross-sectional mixed-methods study involving 2237 respondents across the six geopolitical zones of Nigeria. Utilizing the simple random, snowball and convenience sampling technique, social media platforms (Facebook and WhatsApp) were used to recruit respondents. Variables were analyzed at descriptive and inferential levels. The qualitative component comprised seven (7) in-depth interviews with participants across the geo-political zones. Results The perceptions of respondents towards the policy were diverse across different demographic groups. It was widely perceived that the timing of the policy was inappropriate, considering the challenges faced in utilizing online payment platforms and the significant inaccessibility of cash. Furthermore, the analysis revealed that demographic variables played a role in explaining systematic variations in the experience of financial scarcity and its effect on psychological health during the cash crunch that ensued as a result of the Nigerian naira currency redesign policy. Conclusions This study identified a significant association between the psychological inventory of financial scarcity and psychological well-being among residents in Nigeria during the cash crunch resulting from the Naira redesign policy. The findings suggest that the financial scarcity experienced by Nigerians due to the policy had a substantial impact on individuals’ psychological well-being. We recommend that a holistic approach be undertaken by policymakers to ensure that policy actions not only address economic objectives but also safeguard the mental health and overall well-being of the population.