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• Apex bank reads riot act to DMBs, PoS agents ν We’re dying, MSMEs cry out
From Uche Usim, Abuja
“Where are the naira notes if N3.4 trillion is in circulation and there is no longer a sunset date for the old currency? What is the incentive to mop up cash since all bank notes printed by the Central Bank of Nigeria (CBN) remain legal tender ad infinitum? Is this sabotage and what are the regulatory and law enforcement agencies doing?”
These are the posers on the lips of frustrated Nigerians as the persisting naira scarcity cripples commercial activities, thereby disrupting this year’s Yuletide celebrations.
The Nigerian Labour Congress has already threatened to hit the streets in mass protest if the horror continues.
The crisis, which erupted in Lagos and some parts of the North, has spread to many parts of the country, with Deposit Money Banks (DMBs) rationing cash across the counter amid empty ATM machines.
Low-income earners have described the current economic situation in Nigeria as a death knell since cash scarcity has further worsened existing challenges like hyper-inflation, naira float, forex scarcity and costly fuels.
Also badly hit are Bureau De Change operators, commuters, taxi drivers and commercial motorcyclists who are having a hectic time carrying out their legitimate businesses.
Players in the Micro, Small and Medium Enterprises (MSMEs) said that they are on the verge of closure as buying cash from PoS agents to transact legitimate businesses is eating up their thin profit margins and robbing them the chance to restock exhausted goods.
On CBN’s X handle (formerly Twitter), Nigerians urged the regulator to devise means of working directly with the public to gather reliable intelligence on banks and PoS operators hoarding cash.
Commentators encouraged the CBN to liaise with relevant security agencies to take on the “Nigerian system” (a euphemism for an organised criminal syndicate) currently vandalizing the economy and sentencing the public into endless desolation.
However, last Thursday, the CBN read the riot act to banks and PoS operators who are allegedly colluding to hoard or impede the smooth circulation of cash to all nooks and crannies of the country.
It also unveiled a digital feedback platform to address the swelling complaints of naira scarcity.
CBN Spokesperson, Mrs Sidi Ali Hakama, in a statement said: “The attention of the Central Bank of Nigeria (CBN) has been drawn to alleged cases of collusion between some Deposit Money Banks (DMBs) and Point-Of-Sale (PoS) operators affecting the availability of cash and disrupting the seamless circulation of the Naira.
“The CBN frowns at such inappropriate actions by certain individuals and is investigating the reported cases capable of undermining the smooth running of the economy.
“The CBN has, therefore, warned banks and PoS operators to desist from such activities as relevant sanctions shall be meted out to those found wanting”, she explained.
She noted that with N3.4 trillion in circulation, it means there was sufficient cash in the economy, except that the cash was being hoarded by some people who feared a repeat of the 2022 cash scarcity trauma.
She assured that the CBN was aggressively addressing the reported cash scarcity menace in some major cities across the country.
Ali further 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 (DMBs).
She empathised with Nigerians, over their previous and current experiences, but insisted that the CBN had adequate cash to meet the day-to-day transaction needs of Nigerians.
She, therefore, appealed to Nigerians to be patient while the CBN does the needful to ensure the availability of cash, particularly during the Yuletide and beyond.
However, an economic expert, Dr Muda Yusuf, has asked the CBN to find a lasting solution to the nightmare as the economy was currently on ventilators.
He insisted that cash scarcity should not be experienced in any part of Nigeria if truly there was N3.4 trillion in circulation and a coordinated supply system as claimed by the apex bank last week.
Yusuf, who is the director general, Centre for the Promotion of Private Enterprise (CPPE), told Sunday Sun that the whole cash scarcity imbroglio was terribly affecting retail trade, being an informal sector that deals in cash.
He picked holes in the claims by the CBN that some Nigerians haunted by the fallout of the naira redesign policy were hoarding cash, as there was no sufficient incentive to do so.
“Cash scarcity is not good for the economy and something must be done very quickly. CBN didn’t say it was withdrawing cash, so what are you hoarding cash to do?
“The CBN needs to do more and trace the problem and quickly deal with it. There are records of cash movement. Where did it all go? You have records of deposits and withdrawals.
“As far as I’m concerned, there is no incentive to hoard cash. Unless it’s just to create confusion or sabotage the incumbent administration. Otherwise, it makes no sense hoarding cash. And if some people are truly hoarding the naira, deal with them.
“Again, there is no December 31 sunset date for old notes. There are no elections on the horizon that might have required hoarding cash to ensure huge spending for campaigns and all that. So, hoarding naira to achieve what?
“There is a disruption in the supply of cash somewhere and the CBN needs to dig deeper. N3.4 trillion is reportedly in circulation, where is the money? If there is insufficient cash, make more cash available”, he said.
Meanwhile, commuters and PoS operators are not insulated from the naira scarcity headache.
A PoS agent in Kubwa, Abuja, Kalu Charles, said that it has become extremely hard to get sufficient cash for his daily transactions.
“It’s being rationed at the banks. To get up to N50,000 cash for business is hard. We often part with something for the bank staff and that is why we have hiked the charges to N400 for every N10,000. It used to be N200.
“It’s neither wickedness nor greed, but a reaction to the harsh reality”, he said.
Another agent, Joy Nwangwu in Wuse 2, blamed the hike in charges to banks rationing cash.
She said the development has also made her to ration cash disbursement so that she can accommodate as many customers as possible.
A BDC agent, Saleh Mamman, told Sunday Sun that the dollar exchange rate drops if the customer insists on cash.
“Last Friday, naira exchanged for N1,280/$1 but if you are selling your dollar and wanting cash, we will sell at N1,200/$1. But if it’s transferred to your account, you’ll get the full value.
“This is because we don’t have cash and PoS operators have also hiked their charges, so who soaks up the additional charges, certainly not us”, he said. Mohammed Sabo, another BDC agent, also called on relevant authorities to make cash available to smoothen business transactions.
“You can’t use electronic payments everywhere. What if it fails? Not all retailers have a PoS machine. We need things to go back to normal. We already have enough headaches from naira float, subsidy removal and inflation”, he lamented.
