The Central Bank of Nigeria’s new Naira policy has caused immeasurable misery for Nigerians, hampering businesses, financial transactions and other daily activities. OLUWAKEMI ABIMBOLA speaks with some traders and business owners about its effect on them
The Central Bank of Nigeria in October 2022 announced a new Naira policy that will see the N200, N500, and N1000 notes redesigned and replaced with new ones. The old notes were expected to cease to be legal tender on January 31, 2023.
However, days before the deadline’s expiration, the Central Bank Governor, Godwin Emefiele, announced a 10-day extension until February 10, 2023.
Weeks before the expiration of the initial deadline, Nigerians have been finding it hard to access cash, either new or old Naira notes. The outrage that greeted the situation led to the extension and elicited a promise from the President, Major General Muhammadu Buhari (retd.) to resolve the challenges with the cash within seven days.
Also, the state governments of Kogi, Kaduna, and Zamfara prayed the Supreme Court to halt the Central Bank of Nigeria’s Naira redesign policy. A seven-man panel of the Supreme Court led by Justice John Okoro, in a unanimous ruling, granted an interim injunction restraining the Federal Government, the Central Bank of Nigeria, and their agents and commercial banks from implementing the February 10 terminal dates for the now old N200, N500, and N1000 naira notes to stop being legal tender.
Notwithstanding the seeming victory at the Supreme Court, traders in Lagos are lamenting the impact of it on their businesses.
Top of the list of concerns is how the policy has dried up their businesses. They are simply not making sales, because their customers don’t have cash to pay.
Traders that are worst hit by the policy are those who sell perishable food items and have been throwing their goods to refuse dumps.
Although The PUNCH could not independently verify their losses, analysts said that they might run into millions of naira.
For Abebi Saka, who sells perishable food items like tomatoes, peppers, and fruits at the Ketu market, the naira policy has meant that she goes for days without sales. This means that her goods go bad and lead to debts for her.
Saka told our correspondent how she had been crying on January 31, 2023, about her tomatoes going bad when a customer took pity on her and decided to buy the tomatoes but offered to do a transfer.
The transfer was done, but the credit wasn’t reflected in her account until Monday, February 6, 2023.
Apart from their goods going bad before they can make sales, some of them said that they have resorted to reducing their prices even below their cost price to sell and have cash on hand.
A fruit seller at Ketu market, Motunrayo Agbaje, lamented that she had been throwing out her goods for days because she wasn’t selling and they were spoiling.
Another trader, Wosilat Taiwo, expressed concern about the situation and said that she had even yet to see the new naira notes.
A trader, who sells fruits at Mile 12 Market, Isa Yusuf, told The PUNCH on Tuesday that for the past four days, he had yet to record any sales.
“I don’t know what to do. Those who patronise me don’t have cash and I don’t accept bank transfers,” he lamented.
Until now, a building materials seller, Rasheed Salau, never thought he would be sharing cash with his fellow traders at the plank market in Maza-maza along the Lagos-Badagry Expressway, either because they didn’t make any sales or simply because they didn’t make any cash sales.
That is their reality nowadays, thanks to the Naira scarcity that has beset the country in recent weeks following the imposition of a deadline on the withdrawal of old Naira notes from circulation.
According to Salau, if the cash sharing doesn’t take place, some of them may struggle to get transport fares to their homes, and it can even lead to bad blood in the small market.
The leader of the plank market, Razaq Mohammed, lamented that the policy had brought them so much anguish.
He said, “It has been a major challenge for us. Most of our customers don’t have cash to give us. And when they do bank transfers, when we get to the bank, we are still unable to get the cash. There’s too much of a problem. We are not enjoying the bank transfer at all.
“Using POS has also been a source of grief. You will find PoS operators charging N1000 for N5000. Some charge N1500. And when you complain, they will tell you that they are also buying the cash. At this time, customers would have been disturbing us, but nowadays, we are just here looking at ourselves.”
A transborder transporter at Mile 2, Surulogba, aside from lamenting about how the Naira scarcity had impacted him, also revealed that some of the few customers he has been getting have been coming with the legal tender of the French West African countries, the CFA Franc, instead of the scarce Naira.
The Ekiti-born transporter said, “There are no customers because people don’t have money to spend. By now (about 11am), I would have had four trips, but until now, I haven’t filled one vehicle. Even with that, we are collecting CFA now. There is no Naira, and we are collecting CFA in our own country.”
Meanwhile, a commercial bus driver, said that he visited the bank almost every day in the past week to be able to get N20,000 in cash. He was given N5,000 daily in over the counter transactions.
Tales of woe and lamentations have surrounded bank transfers, which have become the next option for business owners and other Nigerians in light of the scarce Naira notes.
A trader, Ezekiel Ugo, said that he stood ‘surety’ for a customer who wanted to buy from one of his fellow traders because he knew him and made payment via transfer.
However, he lamented that the transfer had yet to be reflected until Thursday, when our correspondent spoke to him. The amount involved is N4,500.
Sharing her own experience, Mrs Fatimo Oyebisi said that she had yet to receive payment for N3,000 worth of goods she sold on Wednesday. The customer made a bank transfer, which had yet to reflect on her account.
A perfume seller, Ifeanyi Okafor was filled with a mixture of anger and resignation after a fraudulent customer scammed him with a fake bank alert and went away with goods worth N100,000.
Okafor said that he saw the alert on the man’s phone but didn’t get any and thought perhaps it was a network issue. However, when he got to his bank to check, he found that he had not been credited with the N100,000.
Hair seller, Mrs Chim Nneka, said, “It is affecting us because without the Naira you cannot buy, and the (bank) transfer service is even more frustrating. Because when they transfer, you cannot see the alert, you have to keep the person waiting until you see the alert. Sometimes, the alert might come, and other times, it might not. For over one week now, we are not doing anything; we come to shop, sit and chat. No cash; no new cash; no old cash.
“The other day, I wanted to buy my baby’s groceries, and I told the seller that I would pay with a bank transfer; she said that I had to include bank charges,” Nneka said.
Sellers of perishable food items have an even harder time with the Naira scarcity.
Apart from their goods going bad before they can make sales, some of them said that they have resorted to reducing their prices even below their cost price to sell and have cash on hand.
Feedback from bankers revealed that the CBN is sticking to its cashless policy and forcing people to stop relying so much on cash.
A banker in one of the leading banks, who spoke to our correspondent on the condition of anonymity said, “It is not what we expect but it is in line with the CBN’s cashless policy. It is not going to be a case of taking one trillion out of circulation (in old notes) and putting it back (in new notes).”
A marketing don, Professor Uchenna Uzo, lamented about the drop in productivity as a result of the scarcity of Naira, which led people to queue at ATMs and banking halls.
Uzo, who is also the Director of the African Retail Academy, said, “There is a drop in productivity. Time is being wasted because people are queuing at bank ATMs. On the mainland in Lagos, the average is 600 persons on the queue. Based on research presented at the Lagos Business School breakfast club on Thursday, 18 million dollars is the total GDP loss per month due to the disruption caused by the new Naira policy.”
“This is hard in an election year. The policy itself is not a bad policy, but the way it is being managed is bad. Nobody envisaged this level of chaos.”
Meanwhile, Dr Nasir Aminu, a senior lecturer in Economics and Finance at Cardiff Metropolitan University in the United Kingdom, weighed in on the issue via his Twitter handle, stating that the Nigerian economy urgently needs the cash injection.
