Ibrahim Mohammed Funsho
Nigerians have greeted the announcement by the governor of the Central Bank of Nigeria, CBN, Godwin Emefiele to redesign the Naira with heavy backlash, questioning its impacts on the major challenges currently bedeviling the country – especially the menace of banditry and kidnapping.
Without mincing words, the currency redesign has degenerated into a melodrama, leading to unprecedented scarcity of the Naira notes compounded by fuel shortage which has brought untold hardship upon the Nigerian citizens.
It is against this backdrop EVENTNG took to the street of Taiwo Oke, one of the commercial districts of Ilorin, the capital city of Kwara State to conduct a survey on the ripple effects of the scarcity of the currency among Nigerians in their day-to-day activities.
Speaking to this medium, a POS agent AbdulRazaq Shafihi, narrated his experience amid the trend of Naira scarcity.
He related, “It is actually affecting us because since the beginning of the new Naira notes problem and the cashless policy, we have not been coming to shop due to paucity of funds. We couldn’t get money from the banks. Petty traders have been helping us, they give us money to transact and we send to their accounts at the end of the day. Our income has drastically dropped because we no longer get money through the banks and those who gave us money through black market do it at a very high rate.
A woman accosted by this medium at the Automated Teller Machine (ATM) of Fidelity Bank at Taiwo Oke said there were two queues with one belonging to customers of Fidelity Bank and the other one belonging to customers of other banks. She further stated that customers of Fidelity Bank were giving the privilege to withdraw Twenty Thousand Naira (₦20,000) at a go while other banks could only withdraw Ten Thousand Naira (₦10,000) but due to paucity of funds each customer were forced to withdraw (₦5000) twice. The woman who declined to mention her name revealed that she was making money out of the ordeal because she did withdraw from the ATM and to people in her vicinity, confessing she has been doing it since the development sprang up.
At the First City Monumental Bank, FCMB, one Abdullahi Ahmad who was in the queue, waiting to use the Bank’s ATM also expressed his frustration.
“I came down to Taiwo Road all the way from Alore Area. There was no functioning ATM/Bank around Alore area. I observed my Subh (morning prayer) here (FCMB, Taiwo Branch). That is just to tell you how important I need to be punctual to be in the queue. Interestingly, The ATMs are functioning well but the transaction progress is being delayed by irregularies. FCMB Staff members with some military and para military personnel are not adhering to the queue arrangement and exceeding the one time withdrawal limit. If not for this reason, The queue is moving fast in spite of the large number of people.
“You can withdraw N20,000 at a go if you are an FCMB customer and you can only withdraw N10,000 at once if you are customers of other banks. This currency scarcity has actually affected my business. It no longer bearable. I spend most of my day in the queue. I pray this ends soon.
A commercial Okada rider, Fathiu Isiaq also spoke to EVENTNG about his experience, “The present economic condition of this country is appalling and it increasingly getting difficult day by day. As a commercial motorcyclist, the business is now declining, customers no longer have access to their cash and this leads to clash of interest between us and customers. How do I withdraw the sum of Fifty Naira (N50) at the end of my work hours? The cash accessibility, The network glitch and transaction Charges are reasons I turn down bank transfers.
“On where I remit and keep money, I don’t use bank. In fact, My bank account hasn’t been active for a while. I use cooperative association for my cash remittances. Hence, I am not bothered by all the challenge,” he said.
A roadside Groundnut seller also lamented the poor economic impact occasioned by scarcity of the new Naira, complaining that sale has hugely gone down compared to what was obtainable in the past. She, therefore, offered supplications that the Almighty should bless the country with good and straightforward leadership in the forthcoming general elections.
Okoli Simon, a dealer in electronic appliances also lamented about the development, noting that it is seriously taking its toll on his business as his daily sale has dropped astronomically.
He added, “I sell electronics accessories. People don’t actually have cash to buy things they want and at times when they wanted to do transfer for payment and it us seriously affecting our sales. Before the issue of new Naira notes, Used to record sales of about N100,00 per day but now I hardly make N20,000.
A Lecturer of the department of Economics, Kwara State University, Dr. Jimoh Sodiq in a phone conversation with this medium shared his his insight on the development.
Jimoh maintained that, “It is the mandate of the apex bank of any nation to change currency over a given period of time, usually eight years. However, there are certain ways they can do this and it wouldn’t necessarily affect the masses. Normally, if you want to replace a currency, if the commercial banks or financial intermediaries get the old notes they are meant to retain them and replace them with new notes. If you go to developed and developing countries like the US and Malaysia, you see that they have different kinds of currencies with the same denomination – one considered as the old ones and the others considered as the new ones. Once the commercial banks get hold of the old ones they don’t put them back in circulation. Some of the reasons for currency redesign is to reduce inflation and bring about price stability because inflation rate in Nigeria is double digit.
“Truly, you would discover that the current scarcity of Naira has reduced the price of some commodities. Let us use the Fulani as a case study, if you go to them now to buy cow they can sell a cow of N400,000 for N200,000 if you have cash because they are not used to keeping money in the bank. The drastic discount is due to the scarcity of the Naira and this has also affected other agricultural produce.
“However, politically, the objective of every government to improve the welfare of its citizens, but on the contrary the masses are suffering due to scarcity of the currency. The petty traders are majorly affected by this trend – for instance, you want to buy a commodity of N100, does it make any sense to transfer N100 through the bank? No. What I think our financial authority should do is apply the measure they had applied in the past by allowing continuous use of the old currencies until they’re no more in circulation. It is clear that they are trying to introduce cashless policy which also applicable in other developed countries of the world but there are ways to go about it without affecting the Nigerian populace.
“In a nutshell, scarcity of the currency has more negative effects on the economy than positive effects because we said we want to control Inflation forgetting that not all commodities will comply with this. Most of the goods we have here are imported. Since the forces of demand and supply determine the exchange rate of the Naira viz a viz other currencies. In that case if exchange rate is still depreciating, there is no way it can reduce the prices of all these commodities because the seller will sell them at the rate they get them from their manufacturers.
“If the national government fails to address the issue of Naira scarcity by this week, the failure may enthrone much more serious social unrest than what we have witnessed in Ogun and other states in the country.”