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By Merit Ibe, [email protected]
The lingering scarcity of Naira appears to be biting hard on micro, small and medium enterprises (MAMEs), as their inability to access cash needed to do business is threatening their existence.
More so Nigerians are yet to feel any respite as the scarcity continues to unleash untold hardship on consumers and suppliers.
Since February 10, when the Central Bank of Nigeria (CBN) first deadline for the swap of old naira notes, having initially moved it from January 31, 2023, Nigerians have been going through very difficult times trying to make ends meet.
The extension granted by the apex bank for the expiration of the old notes as legal tender didn’t appear to have helped the situation.
Evidently, the MSMEs, informal sector operators, rural areas and the unbanked communities that have not embraced digital banking appear worst hit.
National Vice President of the Nigerian Association of Small Scale Industrialists (NASSI), Segun Tayo Kuti-George, who spoke with Daily Sun, applauded the policy, but noted that the execution was not strategic enough.
“We can’t continue with a cash economy in this age and time, but we need to move forward with the cashless economy. If the 60 percent of cash, like we were told, is outside the banking system, it’s not normal. We need to reverse that situation. The cashless economy will reduce corruption.”
He however, noted that the monetary authorities did not consider the peculiarity of Nigeria in the planning, adding that lack of strategic execution put the country in this mess.”
He said a lot of small businesses have the PoS with which they do their business, but that the problem lies in the area of supply of raw materials, which is mostly done by farmers who are mostly unbanked.
“Those who are into food processing have to go to farms to buy raw products. How many farmers have accounts, talkless of bank accounts for transfers.
It is biting hard. Their transactions are cash based. A lot of Nano and Micro businesses have been badly impacted. The users of their services, those who they supply raw materials have not been forth coming. Those at the lowest part of the ladder, the Nano and the Micro businesses are worse hit because they are cash based.
He pleaded with government to supply the new notes as promised and the N200 notes should circulate fast to ease the situation.
On his part, Vice Chairman of the association, Lagos Chapter, Peter Popoola, explained that when consumers cannot buy or don’t have the purchasing power, the retailers can’t sell, so also the distributors, which will invariably affect the producers. It’s a chain thing with a ripple effect.
“The new notes are not circulating. No more patronage. Sales is very low. Workers are finding it difficult to get to work place. The fuel scarcity has made the situation worse.
Government should release enough money into circulation. The banks should give us our money that we deposited into the accounts.
“Most small business owners are collecting their money in bits, which is a waste of capital. Many shops will close at the end of the day. The little money they are collecting they use it to transport and eat, wasting their capital.
National president of Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola, advised that adequate measures are needed to tackle the cash crisis disrupting the economy.
He noted that the effect of the cash swap policy is largely unprecedented, which is eroding the working capital of the nano and micro sector operators in the country.
The ASBON boss, however, warned that the micro, small and medium enterprises, informal sector operators, rural areas and the unbanked communities that have not embraced digital banking and financial inclusion are the worst hit of the cash swap and redesigned policy.
“On one hand, nano and micro businesses in rural and hinterland areas that are largely dependent on cash for virtually all transactions are largely affected by the cash crunch.”
According to him, this category of businesses are not used to digital and online e-commerce banking transactions, hence, quite a number of them just couldn’t transact their normal day-to-day business activities. “There’s no cash anywhere. Even to pay transporters to move their farm goods and products from the farm to the town becomes a great challenge as transporters need to be paid in cash. “The resultant effect of this is that many of these perishable goods are sold at give away prices. This indeed is a big loss for businesses in such sectors,” he pointed out.
