Cash crunch: Is Nigeria shutting down?

The question on the lips of many Nigerians at this time is if the country is shutting down. This became pertinent following the dead silence from President Muhammadu Buhari who commissioned the Naira redesigning policy carried out by the Central Bank of Nigeria (CBN).
Since last week, when the highest court in the land, the Supreme Court, gave its ruling that the old and new naira notes should continue to circulate as legal tender till December of this year, neither Buhari nor Godwin Emefiele, CBN governor, has said any word on the next move.

Their silence has continued to negatively impact the lives of Nigerians and the nation’s economy.

The lingering scarcity of naira bills has continued to affect every aspect of Nigeria’s economy.

Workers who board public transport to office are no longer coping as there is no notes to pay the fare. Transporters are not accepting transfers owing to network failures that have seen many businesses lose some money transferred to their accounts but could not deliver afterall.

The frustrating part of the policy to many Nigerians is that the “corrupt politicians” said to be the target of President Buhari outsmarted him and got all the money they needed to prosecute their campaign and election, as attested to by Rabiu Musa Kwankwaso, presidential candidate of the New Nigeria Peoples Party (NNPP), when he was interviewed by Channels Television before the election.

Buhari had on several occasions said that the naira redesign became necessary to check corrupt politicians from using their ill-gotten money to buy votes.

He got the CBN to starve the masses of money. Now, when the presidential election has been over and Nigerians expected the release of the new naira bills or at worst allow the old bills circulate as has been ordered by the Supreme Court, the Executive arm of government would have none of that. Executive arrogance and impunity has been the order of the day, to the chagrin of many citizens.

Following the Supreme Court ruling, cash-strapped citizens had rushed to their banks for money. Some were given the old notes, but because nothing has been heard from Buhari, nobody is accepting the money from them transactionally.

Some of those who collected such old noted said when they went back to return the money to the bank, they were told that banks no longer accept old notes; that they should follow CBN’s guideline of returning old notes and do accordingly.

There is confusion everywhere mingled with extreme suffering.

Unlike the initial time when the Point of Purchase (PoS) operators had some money to sell to Nigerians, this time around, they have shut down.

A few of them still operating are those who have a deal with some foodstuff sellers who give them some money after each day’s sales.

In such few places, Nigerians who want to collect N10,000 pay N4,000 as commission; which means that in real sense, they are given N6,000. Even at that, the PoS are so few to serve the crowd that need whatever they could get to feed their families.

Commercial banks appear to be in the dark of what is actually happening.
Unconfirmed reports said that President Buhari decided to keep quiet to “teach the governors who dragged him to court a lesson.” The report insinuated that he is trying to “show them that the buck stops at his table”, and that “after all, he is leaving office in the next two months.”

Many Nigerians see Buhari’s posturing over the naira issue as uncalled for. They wonder why an out-going president, whose tenure since 2015 has been traumatic would not want to leave a good name for himself, “even at this dying minutes of his administration.”

It was gathered weekend that following the pain Nigerians are experiencing and the refusal of the Federal Government to heed the Supreme Court’s order, some state governors are in the process of initiating contempt proceedings against Abubakar Malami, attorney-general of the Federation and minister of Justice, and Emefiele.

It was also gathered that the Federal Government has been served with the enrolled order and Certified True Copy of last week’s Supreme Court judgment ordering that the old N1,000, N500, and N200 notes should be in circulation alongside the new notes till December 31, 2023.

The lamentation of Nigerians:

“This naira scarcity is beginning to take a toll on Nigerians irrespective of their class. On Friday, March 10, 2023, I wanted to go to Victoria Island area of Lagos for a business meeting, but I was so low on cash that I had only N400 on me for a journey that would ordinarily cost at least N2,500 to foot the transportation fare to and fro,” said Joseph Adewale, a Lagos resident, who works with one of the blue-chip companies in Lagos.

Adewale said he practically visited the whole PoS operators within his area in Ikotun, a Lagos suburban, in search of cash without any luck that morning until he was left with one option, which was to approach an attendant in a petrol station.

“After several minutes of persuasion, the petrol attendant agreed to give me N2,000 cash on the basis that I must transfer N2,200 to the petrol station’s account even without buying any fuel from them. That petrol attendant was my saviour that day,” he said.

According to him, the painful aspect of the cash crunch situation in Nigeria is that one would have money in the bank and yet finds it difficult to access the money when one needs it.

He said that many Nigerians now spend money to buy their own money from PoS operators who also use the money to buy money from market women, transporters, bankers and other petty traders. He said people now use as much as N1,500 or N2,000 to buy N5,000 while others pay between N3,000 and N4,000 to buy N10,000.

Adewale said that he knows of a banker friend who runs a PoS business as a side hustle, but the shop has been locked for up to two months now due to a lack of cash to continue the business.

He said that the friend had not only stopped the young man that runs the business for him from coming to work but has also been worried about how to raise the money to pay the shop rent, which will expire by May this year.

Justina Osaro, Lagos businesswoman, told our correspondent how she spent close to 2hours at the bus station due to a lack of enough cash to go to Yaba that day to buy goods.

According to her, she had to borrow N1,000 from a neighbour to pay her transportation fare to her destination, adding that she had to spend longer time at bus stops to wait for cheaper commercial buses.

“Today, one will go shopping, sell goods that are worth over N100,000 and still beg for money to transport oneself back home. The other day, I had to trek from Egbeda where my shop is located to my sister’s house in the Idimu area due to a lack of cash to pay my transport fare. On that fateful day, I sold goods worth over N70,000 and all customers paid using a transfer. It was my elder sister that gave me money to complete my journey that day,” Osaro explained.

She said that she no longer goes to her shop every day like she used to do before as she stays home any day she feels like there would not be many customers to patronise her business.

Read also: Supreme Court ruling fails to put cash in Nigerians’ pockets

The cash crunch situation has created a lot of confusion in society as many Nigerians now do the transaction with old N500 and N1000 notes, which are no longer legal tenders in Nigeria.

Presently, there are traders who specialise in accepting old naira notes from buyers on the condition of paying more for goods.

Citing an example Chioma Obasi, a Lagos housewife, said she had to buy bread that ordinarily goes for N750 for N1,000 because she had old naira notes on her.

She said traders who accept the old naira notes increase the prices of goods and people patronise them because they were looking for a way to dispose of the old notes.

“The worst aspect of the naira issue is that banks recently started paying customers with old N500 and N1,000 naira notes and when one collects it, he or she would not see any trader that is willing to collect from it because the Central Bank and Federal Government have not made any comment on it. Even the bank that is paying customers with the old note will tell you that they will not accept it if you return it,” she said.

Obasi said that the development has also worsened the inflation in the country as the prices of food have skyrocketed beyond the reach of many families.

According to her, her aged mother, who lives in a village in the eastern part of the country was forced to eat only yam for a period of one week due to lack of cash to buy foodstuff from the market to cook either soup or stew.

“My mother had money in the bank but could not access the money to buy foodstuff. She used to enter the banking hall to withdraw money but the long queue in the bank has been making it very difficult for her. She said that people now wake up as early as 4am or 5am to go to queue up in the bank and not in all cases that the bank pays customers because in some cases it ends up being a fruitless endeavour,” Obasi said.