By Ben Igbokwe
The last of the catastrophic crises rocking the Nigerian economy is yet to be seen as the scarcity of the new Naira notes and petroleum product persist while defiling every strategic input put in place by the regulatory authorities in both oil and gas sector and banking industry aimed at bring the ugly situation under control.
Since the deadline given by the Central Bank of Nigeria, CBN, to end the existence of the old naira notes as legal tender, and the new Naira notes replacing old notes, with specific reference to N200, N500 and N1000 denominations, which would have come into effect on January 31, 2023, both old and new notes have become extremely scarce, consequently provoking unforeseen local currency crisis in the country.
On January 29, 2023, the CBN Governor, Mr. Godwin Emefiele yielded to enormous pressure from the banking public and other concerned leaders of thought and civil society groups announced the extension of deadline which was expected to end the status of old Naira notes as legitimate means of transactions in the bank and elsewhere. Despite this kind gesture which many bank customers considered very relieving with the hope that before the expiration of the new deadline on February 10, 2023, they would have limitless access to the elusive new Naira notes and done away with old notes in their possessions. Unfortunately, they miscalculated because not only is the much-touted new Naira note still not available but also the old notes are nowhere to be found. To compound the situation for Nigerians, most of the banks’ networks are permanently down making it very difficult for the banking publics to access their funds through the various internet enabled banking channels and platforms including the POS, ATMs, bank payment APPs, etc.
Another pain which Nigerians are going through right now is that the POS operators whose services and availability in almost all the nooks and crannies of the communities and cities whose activities have brought succor and relief to bank customers are now under serious threat of closing shops with the persistence scarcity of both the old and new Naira notes. NEXTMONEY has observed that most POS operators in a big and commercialized city like Lagos have no cash of any nature to give to customers. A few that managed to get some few cash from whatever source, which is most in old Naira notes could only give N10,000 to a customer at the rate of N1,500 or N2,000 as against N200 before the announcement of the deadline by the apex bank.
Some of the POS operators now source for cash from petrol stations and some business owners at much higher rates from what they used to get from the banks when the going in the banking system and economy was good according to NEXTMONEY findings. It was also discovered that some small business operators are now cashing in on the scarcity of the Naira notes generally by making brisk business out of the bad situation, selling N10,000 from N1,500 to N2,000 or more. Some analysts are of the view that that the naira is currently selling more than the US Dollars, Pound Sterling and Euro in the local currency market due to the scarcity of the naira notes. “The implication of what is happening is that the US dollars will fall against the Naira because those people that sell foreign currencies will not have enough Naira notes to give you when you want to exchange your Dollars”, said Kola, an Uber driver.
An insider in the banking system told NEXTMONEY that inability of CBN to release enough new Naira notes to the banks is a major factor fueling the scarcity of the currency. He said that when the banks return large sum of the old banknotes retrieved from customers, the apex bank only return about 30 percent or less of that amount in the new banknotes thereby starving the banks of the much needed cash to attend to bank customer. He warned that if the trend continues banks would have empty vaults soon. “Right now, my bank does not have enough of the new banknotes to dispense to customers. We don’t have the old notes either”, he said.
On his part Marcel Okeke, a Senior economist and Ex banker described what is going on as the clash between politics and economics. “That is what is playing out. On its own the redesign of the naira notes is a good policy and have taken place in many other jurisdictions but it has been politicised because of who and who that is involved in executing it”. He said the redesigning of the naira notes has many benefits. You can use it to target inflation. You can also use it to reduce the amount of Naira notes outside the banking system, buried in peoples’ homes. Now everything has been messed up because of politics. Okeke said that the scarcity of the naira notes would linger as long as politicians keep the naira in their sanctuaries for political purposes. Even the new naira notes are also in their hands because some of these politicians have overwhelming influence on most of the banks. Some of them own banks. The poor masses like us are the only victims in this situation he told NEXTMONEY.
On the other hand, the lingering scarcity of petroleum products which surfaced before December 2022, has further made the scarcity of banknotes worse for Nigerians. In all the 36 states of the Federation including Abuja, scarcity of the petrol has refused to go away. For months Nigerians have been running from pillar to pole looking for petrol and Naira notes all at the same time to power their automobile vehicles or generating and to make transactions of any nature. In a country where electricity and other essential amenities are a great luxury.
This situation has no doubt created opportunity for the petroleum marketers in the country for a bumper harvest and cut-throat profiteering to the detriment of the unprotected poor masses. This is arising from the obvious fact that most of the petrol stations in the country, especially in Lagos State, have adjusted their petrol dispensing pumps and hiked price per litre above the roof tops with impunity. For instance NEXTMONEY observed that with exception of NNPC, Total and Mobil, that sell at N184 per litre of petrol, others far above the regulated prices ranging from N230 to N400 and at the same time manipulated their pump per litre to almost half a litre. Which means customers pay double for every litre of petrol purchased.
With the scarcity of these two key products in Nigeria, Naira and Petrol coupled with excessive charges in the hands of POS operators and petrol attendants where for every keg of 20 to 25 litres’ keg you bring to filling station, you are forced to pay N500 to N1000 for each for just ordinary plastic container. This is excluding the high price for the manipulated pump and the N1,500 or N2000 you have to pay the POS operator as charge for every N10,000 you withdraw.
Another wicked scenario is that all the petrol stations in the country, especially in Lagos refuse to accept payment through bank transfer including most small business. The petrol stations outsourced their POS gadgets and insist on receiving cash from customers for every transaction thereby compelling Nigerians who want to buy the product to patronize their POS somewhere. Good business for the attendants but bad deal for customers.
Unfortunately, the whereabout of both the old and new Naira notes remain largely unknow thereby putting most Nigerians on unprecedented pressure and despair. Some Nigerians who could not bear any longer, the pounding pain, trauma and agony of not having free access to their hard earned savings with their banks and at the same time couldn’t buy the “almighty petrol” have been seen taking their frustration to the banks, protesting violently and in some cases putting up abnormal behaviours inimical to the safety of banks and personnel to drive home their demands and express their anger.
A development which prompted the Association of Senior Staff of Banks and other Financial Institutions (ASSBIFI), to issue a statement condemning the attacks on banks and staff as a result of the Naira scarcity.
Mr. Olusoji Oluwole, President, ASSBIFI, in a statement made available to the media debunked the statement in some public space which accused the bank staff of being saboteurs. “We are not saboteurs”, he insisted.
“We have seen a few videos of bank branches allegedly hoarding cash in their vaults. While we do not hold brief for these isolated cases or condone any verified bad behavior, we expect that the same sources of these videos to also project the many locations that have continued to provide cash to customers to have empty vaults due to the unavailability of cash”, he stressed.
Oluwole who said that he is concerned about the safety of banks staff given the current situation added that, “in the past few weeks have worked tirelessly EVERYDAY for long hours against the prescribed work hours just to ensure customers are able to deposit their old currency notes and make the new ones available for withdrawals at ATMs. This exercise has taken its toll on their health, work life balance, and families while being faced daily with the fear of physical assaults by irate customers”.
As the situation continues to degenerate and people resorting to violence and other uncharacteristic ways of venting their anger on the staff and infrastructures of banks, The Chartered Institute of bankers of Nigeria, CIBN and Association of Corporate Affairs Managers of Banks, ACAMB, have stepped forward to call for calm among Nigerians and the highly esteemed bank customers.
The Institute in a statement signed by its Registrar/Chief Executive, Mr. Akin Morakinyo, expressed serious concern and regrets over the circumstances surrounding the scarcity of the Naira notes and the attendant consequences on the masses, the banks and the entire economy.
He said the Institute empathises with the banking public at this critical period while assuring that all hands are on deck as the relevant regulatory bodies are working hard with the banks to restore normalcy to the banking system and economy. “We sincerely empathize with the banking public on the difficulties encountered in accessing the new Naira notes which heightened tension and, in some cases, provoked acts of violence at different customer touch points. Whilst we understand the plight of bank Customers, we passionately appeal for calm and understanding as the regulator (the Central Bank of Nigeria) and the operators (the banks) are working assiduously to bring the situation under control Relevant stakeholders within the ecosystem are being engaged with a view to addressing the unintended consequences of the laudable Naira Redesign Policy”, explained CIBN Boss.
“We beseech the general public to eschew any act capable of exacerbating the current situation and exercise restraint while we enjoin all our members to carry on their duties with utmost professionalism and diligence”, CIBN appealed.
Similarly, Mr. Rasheed Bolarinwa, President, Association of Corporate Affairs Managers of Banks, ACAMB, acknowledged the enormous impact the CBN redesigned banknotes and deadline for the end of the old naira notes have caused Nigerians and business. “There is no doubt that the unintended constraints in the withdrawal of old naira notes and circulation of new naira notes, alongside the national policy to enhance cashless transactions, have had unintended effects on the generality of the Nigerian populace”, he said in the statement.
The outspoken Banking industry spokesman said assured that Nigerian said banks are currently working with the CBN to ensure that customers have access to cash through ATMs and other channels as well as over-the-counter (OTC) in the banking halls.
While denying that banks are not involved in the hoarding or holding back the new Naira notes, or engaged in act inimical to their avowed commitment to exciting customer experience, Bolarinwa said that “ATMs are being loaded every day and cash is being paid as provided by the CBN, as regularly being checked by CBN inspectors and other regulators including anti-graft agencies”.
“We are confident that these measures, in addition to efforts by the regulatory CBN, will result in greater ease of access and cash liquidity. The Federal Government and the CBN have reiterated similar readiness to address any constraint in the cyclical flow, including making adjustments, where necessary. ACAMB urges Nigerian banking public to exercise patience and not to resort to any untoward behaviour against Bank staff or banking facilities”, said ACAMB President.
The reality is that the lives of Nigerians and businesses have been seriously impacted for the past four months or more. The cost of living has suddenly sky rocketed, businesses are closing shops in droves on daily basis, hitherto free movement of humans and goods have become luxury as cost of transportation is beyond ordinary man’s reach. In fact, a fresh graduate who just got a job in a fast rising entertainment company at Victoria Island told NEXTMONEY that he had to quit the job after two months because he realized that at the end of every month, he had to pay debt of about N30,000 from now where. “I quit the job because my salary was N60,000 per month, I spend N2,000 per day as transporters have increased their fare and I work every day of the week with only one day off. If I add lunch to the expenses, I would have spent N90,000 in a month, which means I had to borrow to pay debt. It didn’t favour me, so I quit”, the young man explained.
With the indefinite suspension of the CBN imposed deadline for the swapping of old to new Naira notes by the Supreme Court of Nigeria on Wednesday, February 8, 2023, and Mr. Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, assuring Nigerians recently, that the cause of the fuel scarcity which has lingered over four months would soon be resolved and normalcy restored as soon as possible, it is left to be seen if the apex court pronouncement and Kyari’s promise to make petrol available within weeks would end the crises, scarcity and the pain, agony and frustration Nigerians are going through as a result of none availability of Naira notes and petrol. The leaders of this country including politicians, policy makers, top government functionaries and top private sector operators should be on the streets and communities to feel the pause of Nigerians at this most critical period in the history of the nation.