As cash scarcity bites as a result of the naira redesign policy of the Central Bank of Nigeria (CBN), erf-of-sale (PoS) operators have resorted to sourcing their cash needs from all sorts of business people to sustain their operations, rather than rely on the hitherto normal channels of commercial banks and automated teller machines (ATMs).
Some traders, at least one viral video online showed, have also been engaging in trade by barter to sustain their trade.
Small scale traders like vegetable and tomato sellers, who hitherto did not have bank accounts, are now embracing the CBN cashless policy in order to sustain their businesses, The ICIR discovered.
Conversely, PoS merchants who are not innovative enough to source for cash elsewhere are exiting the business.
Nigerians have been going through harrowing experiences since the redesigned N200, N500 and N1,000 notes came into circulation on December 15, 2022 and the CBN retired the old notes as legal tender initially on January 31, 2023, but extended to February 10.
President Muhammadu Buhari, on February 16, gave the N200 note an extended circulation life till April 10, while affirming the February 10 expiration date of the old N500 and N1,000 notes.
Accessing the new notes has, however, been difficult, at the banks, ATMs and PoS centres. “There’s no cash anywhere. I had to strike a deal with some supermarket outlets to get cash from them, in order to sustain my business. Their charges are very high. For instance, I have to pay a mark-up sum of N15,000 on N150,000,” a PoS merchant, Mirabel Okonkwo, told The ICIR.
“If we don’t explore this option, we may be out of business. Some of our colleagues have to target who can waybill money to them among their contacts doing business in many cash-driven states,” Okonkwo added.
Another PoS merchant, Amaka Obunadike, told The ICIR that many PoS agents have been quitting the business because of their inability to get cash from commercial banks.
Amaka said, “Some of our colleagues who queued at banks from morning till night end up getting only N10,000 for their businesses. Now, the new money is not circulating again, and you can now get only the N200 old note. Many of us have stopped work. The money I’m looking for is to even buy food for my family.”
She added that many PoS merchants had to resort to transfers, while some are gradually being eased out of the business by the cash crunch.
“This is bringing hardship to the system. Many banking networks are poor with low bandwidth, causing problems for transactions,” she said.
Another operator complained of long queues at a bank, as it rationed notes issuance to their customers.
“I was at Access Bank today and all I could get is N2,000,” a PoS merchant, Yomi Odunayo, told The ICIR.
A viral video in circulation sighted by TheICIR confirmed barter at Anegbete in the Etsako Central area of Edo State.The video showed some traders swapping plantain for yams to sustain their respective businesses.
Checks at some markets in Abuja showed traders are currently prioritising transfer for their transactions.
“We accept transfers, but to the best of my knowledge, I’m yet to witness barter trading. I don’t rule out the possibility subsequently. The only thing I know is that many traders who don’t have bank accounts have now opened in order to keep their businesses alive,” a trader at the Kubwa market told The ICIR.
Available data from the Nigerian Inter-Bank Settlement Syatem (NIBSS) showed that the number of registered PoS terminals in Nigeria increased from 523,488 in 2020 to
Economic watchers are worried about the disruption the naira design policy has caused to the economy.
The Executive Director, Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf, expressed
concern that the failure to extend the deadline for the currency swap could put N100 trillion component of the national gross domestic product (GDP) at risk.
He identified two critical sectors of the economy – Trade &
Commerce and Agriculture – as particularly vulnerable, saying, “The crippling of business
transactions at the distributive trade end amid the currency swap
crisis would not only undermine the trade and agricultural sectors,
but would have a knock-on effect on the manufacturing value-chain
and the services sectors.The trading end of the chain has been greatly affected.
“For an economy that is tottering on the brink, the capacity to
absorb shocks and disruptions is severely constrained. With 133
million Nigerians in poverty, inflicting additional hardship on the citizens is unfair, insensitive and inconsiderate.”
To another economist, Kelvin Emmanuel, poor planning has created problems to the economy.
“We will see the effect of this policy much more in the third quater of the year. We may experience something worse than inflation,” he 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.