Anguish, economic loss of Naira scarcity, by Yemi Adebowale

Nigerians are going through hell with no hope in sight.

By Yemi Adebowale

Entering banking halls across beloved Nigeria remains problematic, no thanks to over three months of Naira scarcity. Because of several failed Point of Sale (POS) transactions, I was compelled to attempt this very difficult task last Monday after weeks of avoiding the war zone. Attempts to log in the complaints via the bank’s customer care telephone lines failed. I arrived my branch somewhere in Ikorodu (Lagos State) to find scores of nervous customers locked outside. Some had arrived as early as 5 a.m. It was big war outside. The bank would not allow the customers in because the hall can’t accommodate them. Besides, the managers were afraid the customers could become rowdy inside. I could not move near the security gate because of the mob. I eventually called my account officer who sent the necessary form to me outside. I filled it and left dejected. I was told it would be resolved, maximum, seven working days.

The customers locked outside of that branch on that day should be over 300. Aside those desperate for cash, the majority had card issues, particularly failed transfers and botched POS transactions. Accounts are debited without crediting receivers, transaction hanging for days/complete lack of access, expired or faulty ATM cards, and the rest of them. Accessing the banking halls to resolve these issues have become almost impossible. Nigerians are going through hell with no hope in sight.

Many were pushed to the digital payment platforms because of endless Naira scarcity. Unfortunately, these platforms are performing sub-optimally, largely because of congestion. Banks can’t cope with the sudden surge. citizens are consequently left in a quandary. Our clumsy CBN forcefully pushing Nigerians into digital banking pretends to be unaware that payment digitisation is a basic challenge that will take time and require a methodical approach, especially to address inclusion and capacity issues. The CBN has decided to ignore the fact that there will be hitches in online payment platforms of banks because of the rapid rush in transactions. Failed electronic transactions are causing so much pain to Nigerians. Besides, petty payments are still done with cash in developed climes. So, what nonsense total digital payment is the CBN trying to enforce on Nigerians?

Back to cash scarcity. Traumatised Nigerians now sleep in banks in a desperate search for cash, with the hope that they will be the first on the queue when the banks open in the morning. Many are still buying Naira with Naira at ridiculous charges. Yes, buying Naira with Naira, the first time in all our years as a country. Also, it has never happened in any part of the world. This is the shoddy level this country has degenerated in the last three months. It is happening in a country supposedly with a government. What I discovered in the last few days is that the CBN no longer has new banknotes to push out. The apex bank obviously did not print more than N300 billion after seizing about N3 trillion from Nigerians.

What about the old notes they promised to push out? Even when
President Muhammadu Buhari and the CBN reluctantly decided to obey the Supreme Court on old Naira notes, the quantity being pushed out is inadequate. The Supreme Court plainly in an interim injunction on February 8 ordered the suspension of the February 10 Naira swap deadline, and also directed the continued use of all the old notes, but Buhari refused to budge. If this had been done, this country would not be in this cash crisis. Rather, our President went on air on February 16 to invalidate the old N500 and N1000 notes, returning only the old N200 notes for a few weeks. What lawlessness!

When the apex court delivered its final judgement, ordering Buhari to ensure that the old notes circulate alongside the new notes, it took our President another 10 days before obeying the judgement. What is happening now is that the old notes are not being pushed out by the CBN in necessary quantity. Even when they eventually do this as promised, the cash crisis will persist. Why? This is because the CBN has created a big “cash hole” that is now very difficult to cover. So, cash supply will be very difficult to stabilise. Now, everybody wants to take their cash out of banks because of the ugly experience of the last three months. Whatever cash Nigerians are able to withdraw are being kept at home. Nobody is entering banks to deposit cash again.

President Buhari and the CBN governor, Godwin Emefiele should be ashamed of their roles in the cash crisis ravaging this country. The Naira redesign policy and implementation of the cash swap have been fatally flawed. It fell way short of universal standards. It was total nonsense that happened faster than I thought, providing no benefits to our people or the economy of this country, both of which have suffered substantial damage as a result.

Frustrating disruptions of trade and payments continued nationwide for most of this week due to this shortage of new banknotes. Rural areas are also affected, particularly farmers. These people rely heavily on day-to-day cash transactions. In beloved Nigeria, a large number of farmers now watch helplessly as huge farm produce go bad because buyers have no cash and producers have no bank accounts.

I was trembling while reading the report of the All Farmers Association of Nigeria (AFAN) on the crisis. According to AFAN, many farmers, particularly those in remote villages, have switched to trade by barter in order to feed, following the cash crunch. The association’s latest findings indicated that farmers have lost about N30 billion to the Naira crisis, and that all arms of the agricultural sector are suffering as a result of the painful CBN policy.

AFAN’s President, Kabir Ibrahim, said though the poultry sector was among the worst hit, other producers of agro-commodities are suffering unending losses: “The policy caused so many hiccups, a lot of poultry farmers have thousands of crates of eggs that are unsold due to the cash crunch. The losses were not only incurred by egg producers. The producers of vegetables, grains and almost all facets of the sector are affected. Some farmers could only feed through trade by barter. That is how bad the situation is in some remote areas.

“Vegetable farmers who want grains, exchange their vegetables for the grains. Also, farmers of grains exchange their products for some other crops, all in a bid to survive the hardship that was caused by the lack of cash for several months.”

Clearly, the suffering and economic loss caused by Naira scarcity is unparalleled. The Nigerian economy is struggling and has lost trillions of Naira to this cash crisis due to the deceleration of economic activities, crippling of trading activities, stifling of the informal economy, contraction in the agricultural sector and the paralysis of the rural economy. Millions of citizens have slipped into poverty as a result of the disruptions and tribulations caused by the cash crisis.

Last Tuesday, the Emir of Kano, Alhaji Aminu Ado Bayero aptly cautioned the CBN on the cashless drive, saying, “People have suffered so much as a result of this policy. This is because people were rushed into it. So now that you are here, we advise that you should look into the challenges people are facing and consider reviewing the implementation process. Take it easy and steady for people. You cannot do this in a haste, people need time to accept and get acquainted with the policy…You should also consider people in the rural areas because they are suffering the most during this hard time.”

I am not sorry to say that the Naira redesign policy is absolutely unnecessary. Buhari and Emefiele decided to play Russian roulette with our lives. The way forward is very simple: The CBN should massively push out the old Naira notes to end the pain in our land. In addition, massive printing of new Naira notes should commence immediately. This is the only way the old notes can be smoothly withdrawn in December.

Crdit: RingTrue with Yemi Adebowale, THISDAY Newspaper, April 1, 2023.; 08054699539 (text only)

Leave a Reply

Your email address will not be published. Required fields are marked *