w Nigerians agonise as naira notes disappear from banks, ATMs
w Shylock POS operators prey on hapless bank customers
By Vivian Onyebukwa
In November 2022, the Federal Government, through the then Governor of the Central Bank, Godwin Emefiele, introduced a redesign of the country’s currency as part of its efforts to achieve a cashless policy in the country’s financial space.
It was alleged also that the cashless policy was to work against some politicians who were said to have stockpiled money for their campaign purposes ahead of the February/March 2023 elections.
This resulted to scarcity of naira notes, which caused a lot of untold hardship to the citizens. Most Nigerians could not withdraw cash for food, transportation or health care. Some people reportedly died and some bank branches were set ablaze in riots at the peak of the crisis. Some bank customers. Some bank customers were also seen going berserk in the banking halls because they were not able to withdraw cash to meet up with their immediate family needs.
Many Nigerians, including leaders of the ruling All Progressives Congress (APC), were opposed to the policy. In February 2023, three APC governors – Governors Nasir El-Rufai (Kaduna), Yahaya Bello (Kogi) and Bello Matawalle (Zamfara) dragged the Federal government before the Supreme Court on the matter.
The states sought a declaration that the Demonetization Policy of the Federation being carried out by the CBN under the directive of President Muhammadu Buhari was not in compliance with the extant provisions of the Constitution of the Federal Republic of Nigeria 1999 (as amended), Central Bank of Nigeria Act, 2007 and actual laws on the subject.
Many Nigerians heaved a sigh of relief on March 3 2023 when the Supreme Court ruled that the old N1000, N500 and N200 notes outlawed by Emefiele’s policy remained legal tender till December 31 2023. The apex court also nullified the entire naira redesign policy which it tagged illegal.
But recently, scarcity of naira notes seems to have returned across the country. Since November 2023, Nigerians have been passing through turbulent times while trying to withdraw cash at banking halls and ATMs. Many have resorted to getting cash from PoS operators, but virtually all of them have also raised their charges, complaining that getting cash is also difficult for them.
This ugly situation prompted an official statement by the Central Bank’s Acting Director in charge of Corporate Communications, Hakama Ali, assuring Nigerians of adequate cash in circulation.
Ali disclosed that the CBN was monitoring the situation and had released sufficient cash to its branches across the country for onward distribution to Deposit Money Banks.
Despite the official assurances, the situation is not improving. In November, banks started imposing daily individual withdrawal limits of between N20,000 and N40,000. It later reduced cash withdrawals to N10,000 and then N5,000. Cash availability at the ATMs has also reduced considerably and long queues are now common.
The new CBN Governor, Yemi Cardoso, has continued to assure Nigerians that it has supplied the banks with enough cash. But this has not reflected at the dispensing points. Instead, cash has become scarcer. In some banks, even ATM’s have stopped dispensing cash.
This time, the CBN has blamed the scarcity on hoarding, because of the deadline given by CBN to phase out the old naira currencies. This is because people are afraid of facing similar challenges experienced during the naira redesign project, hence the hoarding.
There was some reprieve for Nigerians when the Supreme Court in March last year overruled the CBN and extended the validity of the old Naira notes to December 2023. In anticipation that there might be no further extension, the CBN said Nigerians started hoarding cash again although the apex court later authorised both the old and new notes as legal tender.
To most Nigerians, the situation is simply unacceptable. Even organised labour has asked the President, Bola Ahmed Tinubu to intervene in the situation.
Some well meaning Nigerians, too have advised the government on how best to handle the situation to avert the looming disaster as was experienced last year, 2022.
Ordeals we passed through over cash scarcity – Nigerians
Some Nigerians have decried the situation arising from what seems like another cashless policy exercise. They recalled some of their last experiences, noting that such situation must never be allowed to repeat itself. They said no sane population would ever wish to experience such trauma ever again.
A lecturer at the Nnamdi Azikiwe University, Awka, Anambra State, (names withheld) described it as an experience no one would wish his enemy.
“The annoying aspect is that those that made the policy were not affected. Obviously, they have access to bank executives who would readily avail them of cash. And to remember that no one could access his/her money even when you have deposit! Again, the cash they were giving out could not get one breakfast”, he stated.
He, therefore, advised the government to always remember to give orientation before enforcing any policy.
Comrade Emeka Anozie, a human rights activist, writer, and author recalled his personal experience during the last cash crunch. He said his main ordeal was the inability to get the exact amount he wanted from his account, lamenting that though naira notes were never in the banks, but were readily available at the POS operators’ stands at exorbitant rates.
Comrade Anozie expressed sadness over some patients’ inability to get the cash they needed to buy drugs and blood to urgently treat themselves. As a result, he noted, some had died, according to news media report.
“Even some of the political candidates which they said were being targeted, still had the notes in their houses to buy votes. So what are they saying? They actually suffered us for nothing.”
Comrade Anozie, who is also a political and social commentator, wondered why this cash crunch is happening again under the new CBN governor, Olayemi Cardozo, making lives unbearable for the masses the second time at a time people were making preparations for Christmas and New Year celebrations.
“I wonder the hurry of embarking on this type of policy by Emefiele in the first place which could not even check vote buying, according to them,” he said.
Comrade Anozie, who is also Founder and National President – Barrister Ubani Nigeria Solidarity Youth Movement, advised that CBN should provide enough cash, as well as sanction POS operators for overcharging customers. He told CBN to ensure that adequate planning is made to embark on this type of policy next time.
On her own part, another Nigerian, Princess Folarin, stated that banks and the CBN should not heap all the blame on the POS operators. In his words, the CBN and the banks also have their share of the blame.
She described the experiences she encountered during the naira scarcity as a very harrowing one. Her words: “It was biting hard, real hard. Unscrupulous and greedy Nigerians threw caution to the winds and made it more excruciating, and almost impossible to access the naira. The POS operators became shylocks and made themselves rich overnight. They couldn’t care a hoot. They did not care whose ox was gored. They wanted to optimise the opportunity thrown open by the naira scarcity. They would give you N35.000 in place of N50,000. It was that bad; making a profit of N15,000 in one single transaction.”
She advised the CBN and the government to show empathy for the plight of the people by taking proactive and precautionary measures to see that this doesn’t happen in the first place. “They should think and plan well before executing their plans. Weigh the pros and cons of the action they want to execute. Consult widely before executing their plans. No one person has the monopoly of knowledge. That’s why consultation is important. May we never experience such situation again in the country,” she prayed.
Tony Ohakwe, a media entrepreneur, while narrating his experiences to Saturday Sun said: “An average Nigerian experienced the worst situation during the so called CBN naira redesign and cash scarcity. Some of us believe that it was a deliberate action by the outgone government to punish Nigerians, not the politicians who at the end of the day hoarded all the currencies which they used for their campaigns. Thank God we survived it. My experience as a man with family and also a business man in the media entrepreneurship was a horrible one. It is highly unspeakable. Words cannot explain it. Imagine us buying our own currency! We were at the mercy of the banks and POS operators. It was a horrible thing. When we thought that it has died off after the election, within this period we are in now, we started experiencing this cashless policy again when they started giving us the signs in November, and we discovered that it is another deliberate effort, a deliberate action of government. The other day the CBN Governor came out, blasting the banks and the POS operators. Good a thing this government has started talking about that. Most of these things that happen in Nigeria are because of lack of economic data to plan. Nigeria is a country that does not know the importance of data. We have good policies. Businesses in this nation suffered a great loss. We found it difficult to pay our workers because there was no cash. Yes, some of us believe in cashless economy, but not in every aspect. There are certain things one needs cash for. The woman at Oyinbo or Jankara market needs cash to move her goods, replenish her stock.”
Ohakwe has a word of advice to the government. He advised that the government should start making proper use of the economic data that is available. He said cashless economy is good, but the government is not implementing the policy the proper way.
He added that to avoid this disaster again, the only thing that the country can do as a nation is to plan properly. “We must plan to succeed, otherwise we plan to fail. Proper planning and data gathering is the only escape route from this disaster. Nigeria should start learning how to use data for proper planning and efficient, proper service delivery. Not only in government; individually and in households, people should have data and implement those data. Also, an average Nigerian should have proper data on expenditure and income and implement them. The road to success in any family, in any economy is data analysis and using that data to build your tomorrow,” he advised.
“My worst experience during the last cashless policy was buying N20,000 with N5,000. It was horrible.” These were the lamentations of Iwu Okwuchi Dorcas, a sales manager.
She then asked the CBN to find a way to know the volume of transactions performed on various banks’ ATM machines on daily basis, saying if it falls below average, such a bank should be sanctioned.
Prophet Samson Ayorinde, Founder, World Bible Church (WEBIC), has told the government to go ahead and take advantage of the fact that the country is bringing in e-Dollars that will electronically be able to move e-Naira so people would do less transaction with physical cash as it is done in the developed countries. “I am spearheading this particular transaction with the Federal Government of Nigeria, and we are asking that the government will open up doors for us to bring in e-Dollar, bring in investment, use it even as government official transaction so that the movement of physical cash will greatly reduced. It will also bring in a lot of Fintech companies, like in Kenya, you have M-Pesser. They are able to move money, even small funds. I know that our government is coming up with things but they should really do more in doing cashless policy. It is a global phenomenon and that is the future of trading.
“Again the government should seriously look into checking all these old bills. Some of them needs to be removed out of circulation, and bring in new ones,” Prophet Ayorinde said.
A retiree, Ilo Ike, advised the Central Bank of Nigeria to do their job, and not use POS operators as an excuse. “They should be up and doing. Money has been in circulation for the past 100 years,” Ike stated.
“For me, I believe that for Nigeria’s government and the CBN to address these issues of money scarcity and collusion, the CBN and the government can consider implementing stricter regulations, enhancing monitoring mechanisms that foster transparency in financial transactions, and collaborating with stakeholders to ensure compliance,” said Ms Joke Kujenya, a journalist.”
Kujenya added that promoting digital financial solutions and educating the public on responsible financial practices that would contribute to a more resilient and efficient monetary system will go a long way in solving the problem.