Wage earners who rely on daily remuneration to fend for themselves are hard hit by the persistent naira scarcity in Africa’s biggest economy.
Some of the daily wage earners fall under these categories; construction site workers, factory workers, transport workers, and truck loaders among others.
Femi Ahmed, who is a building contractor in Abuja told BusinessDay that before the scarcity of fuel and shortage of naira notes, over 40 men and women worked on his site daily and he paid between N2,000 to N4,000, while he provided transport and feeding for them.
However, for over two weeks, he had to cut down on the number of people he employed to 15 as he is unable to get the required cash for his workers’ daily pay.
“For the current project, I need around N500,000 weekly to sort my workers and pay suppliers too and this transaction is usually done with cash because most of them use it for daily survival but I don’t have enough cash to pay all of them and I asked some to stop coming, I am even still owning some of them,” he said.
As a result of this, Ahmed said the ongoing construction project has slowed down as the available hands are limited and many of them are not okay with the current arrangement because he transfers their wage to them and they cannot easily access it.
A lady who identified herself as Blessing, a widow with two children who used to work in a hair factory arranging attachments complained that she has not been able to work as much as she used to because the supervisor asked her and some others to stop coming owing to naira scarcity.
Read also: Farmers battered as prices of perishables drop
“My children and I cannot feed well and I have to continue borrowing till everything returns to normal, I use my neighbor’s account sometimes but I can’t use the ATM due to the queue and PoS charges are too much for me to pay,” she said.
Petty traders are also experiencing tough times with poor sales as cashless customers prefer to transact with people who have accounts and are more inclined to make transfers above N1,000.
“I sell different types of green vegetables, I can’t tell a customer to transfer N200 to me and I am selling perishable items, I have lost a good amount of money in the last two weeks and after this is sold out, I won’t be restocking till everything is normal, rather I will get something more durable,” she said.
In December 2022, the Central Bank of Nigeria launched the currency redesigned programme aimed at tackling inflation and mopping up excess liquidity outside the banking system.
But the naira redesigned policy has resulted in creating scarcity of the naira notes, thus hurting individuals and businesses, especially those that are heavily cash-reliant, BusinessDay’s findings show.
The persistent scarcity has opened up a naira black market where Nigerians now pay to get cash, making it increasingly difficult for people to give out cash.
Alex Sienaert, chief economist at World Bank, Nigeria said at a forum that Nigeria’s accelerated inflation growth has eroded the N30,000 minimum wage by 55 percent and widened the poverty net with an estimated five million people in 2022.
“The cumulative inflation between 2019 and 2022 was 55 percent, households’ purchasing power has slumped and the real minimum wage in 2022 after discounting for inflation is N19,355 while in dollar value is $26 after discounting for both inflation and exchange rate depreciation,” he said.
According to the National Bureau of Statistics (NBS), Nigeria currently has 133 million people who are multi dimensionally poor in terms of health, education, living standards, and work and shocks, there are fears that with the current trend, the numbers will increase significantly.
Chinyere Almona, director-general of Lagos Chamber of Commerce and Industry in a statement said the phasing out of old currency notes, withdrawal limits, and the scarcity of new notes may have started to impact businesses and social livelihood beyond intentions.
Almona added that micro-enterprises and artisans that operate in the informal sector without any inclusion in the financial system are finding it difficult to make their usual transactions of paying and receiving cash.
“While we support the drive toward a cashless economy, redesigning the naira and phasing out old currency notes could have been better planned and implemented with no hardship for businesses and individuals,” she said.
