The charges imposed by money deposit banks and Point of Sales (PoS) on Nigerians who make use of their services for cash withdrawal is cutting into their purchasing power.
Currently, PoS operators charge their customers an average of N2,000 on every N10,000 withdrawal. While most money deposit banks have programmed their ATM to dispense only N1,000 and N2,000 per withdrawal to non-customers to charge N35 per on every withdrawal.
“This is frustrating!!! I have paid extra while paying for goods to traders who ask customers to add PoS charges while transferring,” said Ronke Raji, a teacher in Lagos.
“I bought some things from a petty trader who refused to accept online payment, I withdrew N2,000 for N2,400 to pay him,” she said.
She noted that she has spent over N3,000 paying for charges since Monday and this is reducing her purchasing power.
The naira scarcity is sending frustration across the country and Nigerians, irrespective of their economic status, are bearing the brunt as the situation is cutting their purchasing power by at least 10 percent, according to experts.
The scarcity of the new naira notes across the country has opened up a naira black market where Nigerians now pay to get cash.
Read also: Naira shortage may boost foreign currency demand – Fitch
Praise Ayeni, a trader At Agboju market said, a PoS operator was helping those who needed cash to buy food items at a cost, noting that it costs N700 to withdraw N5,000 (old notes).
“The people at the bottom of the pyramid of society live their lives more on a cash basis, even though it is not a significant amount of cash,” said Abiodun Keripe, managing director of Afrinvest Consulting Limited.
“The N500, N1,000, N2,000, and N5,000 notes mean a lot to them,” He said the poor need access to cash regularly to support their survival,”
“But when they now have to pay N1,000 to access N5,000, it makes their cost of living a bit more expensive, which could affect poverty levels.”
Uchenna Uzo, consumer expert and faculty director at Lagos Business School spoke on how the scarcity of the new naira and the move to a cashless society affects consumer behavior.
“The naira crisis is already affecting consumption, people don’t have the cash they need to buy, so in the informal sector, 70 percent of its transactions are cash-based,” he said.
He said that people don’t have readily available cash and can’t buy what they want to buy then even when they want to buy payments become an issue.
Uzo also mentioned that this is affecting businesses’ credit policies. “Credit policies can’t function anymore.”
“Another effect is that a lot of people are not moving around as much as they used to, they are just playing a waiting game to see whenever they’ll have access to cash,” he said.
On its impact on trade sector growth, he said that it all depends on how it’s seen because e-transactions have risen by over 60 percent in the past month so you’ll expect that as well.
Yesterday, the CBN said that its stance on the deadline of the old notes as legal tender remains despite the Supreme Court ruling.
Many Nigerians and businesses are skeptical about accepting the old notes amid the scarcity of the new ones, further driving the exploitation of Nigerians and reduction in their purchasing power.
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