CASH flow in the monetary system has been improving during the week as the Central Bank of Nigeria (CBN) injects funds into commercial banks for over-the-counter transactions, and for loading into their automated teller machines (ATMs).
CBN had last October announced it would be redesigning the N200, N500 and N1,000 notes. The new notes were introduced into the system on December 15, 2022, with the CBN initially setting January 31, 2023 as deadline as legal tender for the old notes being rested.
One of the reasons the CBN gave for its naira redesign decision was its resolve to strengthen Nigeria’s cashless economy.
But the policy has brought so much agony to individuals, families and businesses as the new notes have remained scarce.
The CBN has not helped matters with its decision somersaults on the swap of the old with the new.
On the heels of this concern, the Nigerian Labour Congress (NLC) threatened on March 22 that it would be picketing the CBN offices nationwide because of the apex bank’s failure to comply with the Supreme Court’s order that the N200, N500 and N1,000 notes remain legal tender till December 31, 2023.
The NLC directed all the affiliate unions to begin mobilisation to ensure total compliance with the proposed shutdown.
To avert the picketing, the minister of Labour and Employment, Chris Ngige, met with the CBN governor, Godwin Emefiele, and the NLC president, Joe Ajaero, to discuss the issue.
Emefiele promised after the meeting that the CBN would henceforth make cash available to commercial banks to dispense to the public. The CBN then directed the banks to open their halls to customers at weekends for cash withdrawals.
The NLC consequently suspended its strike threat, but with a proviso it would still picket the CBN offices if after 14 days the situation did not change.
Checks by The ICIR at strategic markets and banks across the country revealed a gradual easing of the cash crisis as many banks have been dispensing cash, both over the counter and through their ATMs.
Crowds of customers at the gates of commercial banks shoving and pulling to access cash, and long queues at the ATMs have been reducing, though they have not disappeared.
The CBN’s Acting Director, Corporate Communications, Isah Abdumuminin, confirmed on March 26 that the regulator had disbursed substantial amounts of money to the commercial banks for onward distribution to the public.
Bank sources told The ICIR that banks had, indeed, been receiving both the old and new notes from the CBN.
“We have been monitoring the situation and it is improving. Banks are also disbursing what they get. I can authoritatively tell you that the situation will improve more than what it is currently .We have got that assurance from the CBN that it can only get better,” the president of the Corporate Affairs Managers of Banks (ACAMB), Rasheed Bolarinwa, told The ICIR.
In Madalla market, Niger State, our correspondent watched transactions going on smoothly, with no complaints about cash scarcity. The market, notable for wholesale foodstuffs sales, was brimming with activities.
At the Kubwa central market, traders were seen going about their normal business, also without complaints of cash crunch.
“There is no problem with cash. Customers patronise us with ease. We deposit and withdraw money from the banks with ease. For now, our business is moving on swiftly,” a dealer in phone accessories and laptops at the market, Afam Ugwu, told our correspondent.
At the height of the cash crisis, point-of-sale (PoS) operators, an alternative source of payment, exploited the situation to fleece people in need of cash by increasing their charges astronomically.
They jacked their normal charge of N200 on every N10,000 to as high as N300 on every N1,000 or N3,000 on every N10,000. People were, as it were, buying the naira through their noses.
But there has been a marginal drop in charges at PoS centres since the beginning of the week as banks intensify the disbursement of cash.
“For now, we charge N100 per N1,000. We used to charge N300 per N1,000, but now the charges have dropped,” a PoS merchant, Ikenna Ogbu, told our correspondent.
It was observed that some PoS operators were, however, still charging N200 on every N,1000, as they complained they were still finding it difficult to easily access cash.
One such operator in Somolu, Lagos, Fatai Oluwole, told our correspondent he was still buying naira from some sources he would not mention.
“I’ll be losing if I do this business at any charge lower. I still buy naira notes from somewhere,” Oluwole said.
Another operator at the Redemption Camp, well known there as Esther, said she was able to withdraw only N40,000 at the Access Bank branch inside the camp. Esther was, by Thursday, charging N500 on every N5,000 she gave out.
Cash-strapped customers continue to besiege banks
In Lagos and Ogun states, it is not yet uhuru, as customers still besiege banks from the early hours seeking to get cash.
The ICIR observed the situation when it visited First Bank, Access Bank, Union Bank, Ecobank, United Bank for Africa, Zenith Bank and others in the Ojodu-Berger and Ikeja axes in Lagos state, and also Mowe and Ibafo in Ogun state.
Our correspondent reports that crowds were seen at banks’ gates in the early days of the week struggling to gain entrance to make withdrawals.
Many of the banks were still dispensing as low as N5,000 to N10,000. But the situation had increased by Friday in some banks, which gave out up to N30,000 to N40,000.
“I think Nigerians are going to experience this situation for the next one month,” a customer seen at the First Bank branch at Ojudu, who gave his name simply as Ayo, told The ICIR, adding, “The situation is not encouraging at all.”
Zenith Bank’s premises at Ogba, Lagos, were virtually empty on Tuesday by about 2pm. A security officer said the bank had exhausted cash brought to the branch from its headquarters and directed customers to come back the next day.
At Mowe and Ibafo on Wednesday and Thursday, The ICIR observed that the situation was similar, but more intense as the areas have fewer banks.
The ICIR was at FirstBank in Mowe on Wednesday to observe the situation, and discovered that as early as 6.30am, over 150 customers were already waiting for the branch to open.
‘I fixed my car in order to get cash’
The naira redesign crisis has worsened the situation for residents of Mowe and other adjoining communities who pay higher fares to get to Lagos because of the lingering reconstruction on the Lagos-Ibadan expressway.
Samson Echenim told The ICIR that when the cash crunch wahala started, his wife helped him with cash, as she is a trader. But as it persisted and got more severe, he had to fix his car and put it on the road for movement to work.
“When I’m going to work, I carry people. And I also bring people back home, too. I collect cash from them as fare, while I fuel my car with PoS. So it’s like converting my fuel money to cash using the filing stations,” Echenim, who resides in Mowe, Ogun state and works in Lagos State, narrated.
He hoped for an improvement in the situation, from what he called an insignificant margin.
“There is a Stanbic IBTC Bank in our building where a customer could withdraw only N5,000 across the counter before the old notes were released. But now, the pay is N17,000 per customer per day after release of old notes.
“Then there’s another bank near my office; it is Gtbank. All through this period, the bank is not paying cash. It didn’t pay before old notes were released and even after old notes were released, it is still not giving customers cash.
“As for PoS, I have a friend who is an operator. Before old notes were released, people paid N2,000 to get N5,000. That’s a whopping 40 per cent charge. After old notes were released the charge remained the same!
“Banks might be giving more cash across the counter but the ATMs are still empty. And PoS operators haven’t reduced charges, ” Echenim said.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.