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•Worry over unstable dollar rates
By Chinwendu Obienyi
Amid the lingering scarcity of the new naira notes, businesses especially the small medium enterprises (SMEs) across the country have continued to count their losses over low patronage from customers and Nigerians.
Some business owners who spoke to Daily Sun at the weekend also revealed that since the scarcity of the new notes started, dollar rates have been quite unstable thereby making logistics planning an uphill task.
They have therefore called on the Federal Government and the Central Bank of Nigeria (CBN) to sanction banks that failed to pay customers on demand despite its warnings and directives.
The CBN Governor, Godwin Emefiele had in October 2022, outlined moves to redesign the higher denominations of the Naira in N200, N500 and N1,000.
Emefiele, who said the policy was approved by President Muhammadu Buhari, added that the circulation of the new banknotes would commence on December 15, 2022.
According to him, the development was also aimed at checking the increasing risk of currency counterfeiting evidenced by several security reports, and its associated consequences to financial stability and the worsening shortage of clean and fit currency, with the attendant negative perception of the CBN.
The CBN Governor at a forum in January 2023, revealed that there was significant hoarding of naira notes by members of the public, with statistics showing that over 80 per cent of the currency in circulation was outside the vaults of the commercial banks.
But since the naira debacle began, in January, Emefiele had insisted that the banks have been given adequate cash to meet customers needs, including accusing them of paying money to their priority customers, leaving the vulnerable to lament.
However, they lamented that despite identifying several banks hoarding cash in several states across the country, the CBN has been unable to sanction anyone of them to serve as a deterrent to others, thereby empowering more of them to continue denying customers access to their cash.
They further lamented that many small businesses are closing down for lack of patronage.
“The scarcity of the new Naira notes is killing our business and disrupting activities in markets, restaurants, banks and major sales outlets across Nigeria”.
Meanwhile the long queues in the banks’ ATMs on resumption of activities have continued as mobile bank apps have consistently faltered amid network glitches due to the surge of users on a daily basis.
Nneka Ndu, a businesswoman at the Alaba axis of the metropolis, said the redesigning of the naira is actually a good policy but the implementation came at the wrong time. Ndu who expressed concern that the Naira scarcity was adversely affecting commercial activities in the country urged the Federal Government to quickly address the situation. She said that businesses of most members of the association were going down thus bringing hardship to them while adding that the dollar rate has been unstable since the scarcity started.
Daily Sun investigations revealed that the pressure on the Naira intensified in the parallel market as the price currency (USD) gained 2.1 per cent week-on-week (w/w) to settle at N770.00/$1 but weakened by 0.1 per cent w/w to N461.25/$1. This has made the parallel market – official rate differential widen by 356bps w/w to 66.9 per cent.
“I do not think the naira scarcity is affecting forex demand because the dollar price still remains unstable. Even the CBN and the banks try to give small scale businesses form Q on a weekly basis, the CBN sells for $462 or thereabout. But at the parallel market as on Friday, the dollar sold at N760/$1, so you can see that the scarcity is in no way affecting the Naira and that is because the dollar rate is not stable. The dollar rate ought to have dropped to at least N600/$1 but that has not been the case.
The policy is a good policy no doubt but the implementation was not well thought out because there are people who still do not have bank accounts and live on cash. So I think the CBN can look at ways to address this scarcity issue before elections this week because opposition parties might seize on this and unleash mayhem. We might even see looting from thugs on businesses if this scarcity gets out of hand”, She said.
Similarly, Dr Abdulrasheed Yerima, the National President, Nigerian Association of Small and Medium Enterprises (NASME) said that the scarcity of the Naira notes has had a negative impact on the operations of SMEs in the country.
“We cannot fend for some of our needs and at the same time most of our Micro Small and Medium Enterprises (MSMEs) cannot pay their staff, especially the casual workers. More so, there are no banks and poor network coverage where they are operating, therefore, they cannot operate optimally.
“Some of them don’t have accounts, especially those in the rural areas and some of them cannot afford a smartphone to enable an electronic transfer. Their businesses depend on daily activities in the rural areas and they are also battling with the issue of power supply, so it is a lot of stress for them and it is affecting their businesses negatively,’’ Yerima said.
