Naira notes scarcity: How effective is deadline extension?

The past few weeks have been quite traumatic for citizens and small scale businesses in Nigeria as a result of the continued scarcity of new redesigned naira notes coupled with inadequate fuel supply which have lingered for quite a while. Despite the deadline extension of February 10, 2023, the scarcity of the new notes has persisted unleashing hardship and traumatizing experiences on the polity. One question which has however beclouded the minds of people is; how did we get to this stage of disorderliness? JENNIFER YARIMA x-rays the difficulties which has brought untold hardship on the citizenry.

CONSIDERING the hard times Nigerians are facing as a result of scarcity of new redesigned naira notes in circulation which has caused sleeplessness for many, the reaction by some state Governors who sought for legal redress at the Supreme Court is bringing respite to some extent.

The Supreme Court of Nigeria had restrained the Federal Government from implementing the February 10 deadline for the old 200, 500 and 1,000 naira notes to stop being circulated as legal tender. Three Northern states namely, Kaduna, Kogi and Zamfara States had in a motion ex-parte filed on February 3rd by their lawyer; Abdulhakeem Mustapha SAN prayed the Apex Court to halt the Central Bank of Nigeria from bringing the circulation of the policy to a halt.

A seven member panel of the court led by John Okoro gave the order of interim injunction amid acute scarcity of the newly redesigned N200, N500 and N1, 000 currency notes. The court gave the order temporarily, cancelling CBN’s February 10 deadline to end the validity of the old versions of the bank notes based on an ex parte application filed by the three northern states being controlled by the All Progressives Congress (APC) in the country.

The applicants had on February 3 filed their application at the Supreme Court praying for an order to restrain the CBN from ending the use of the old currency notes on February 10 as threatened by the bank. They cited the suffering the scarcity of the new bank notes had brought upon many Nigerians. The court after issuing the order adjourned until February 15 for hearing of the main suit.

Accordingly, many citizens of the country have commended The Supreme Court saying it deserves applause for liberating Nigerians from this much tied condition. This development has consequently facilitated the old and new naira notes to coexist as legal tender beyond the earlier stipulated date.

Interestingly, the CBN had last October announced that it was redesigning 200, 500 and 1, 000 naira notes to help arrest the issue of plenty money in circulation which had inherently brought devastating consequences on the polity. Godwin Emefiele, the CBN Governor had announced 31 January as the deadline for the expiration of the old notes. But due to public outcry trailing the scarcity of the currency however, Emefiele extended the deadline till February 10. He then instructed that banks would continue to receive the old notes even after the deadline.

To date, many citizens have not seen the new notes let alone exchange it with their old notes despite assurances by the government to make the currency available. This has led to excruciating situation that is almost leading to anarchy in the land. Presently, economic activities are fast getting to a halt in the country.

The scramble by many Nigerians to meet the deadline has been also quite cumbersome as most of them have flooded banks with huge cash in old notes to exchange them with new ones without success. Many others have been left in long queues, sometimes for days, at Automated Teller Machines (ATMs) on daily basis, just to have these new naira notes. Most worrisome however is the fact that most ATMs in the country have no cash to dispense to many individuals in such communities.

This experience is becoming quite strange to majority of Nigerians because our economy is largely propelled by cash driven transactions as most small businesses largely depend entirely on physical cash transactions. Therefore, it is important that enough naira notes are unabatedly issued by authorities concern to go round so as to avoid unprecedented crowd presently witnessed all around banks.

Most citizens have taken the risk of early morning hours rush to queue up at the banks’ entrances or ATM pay points to be attended to on time. Instead of getting the maximum daily withdrawal of N20,000 new naira notes, few only get N5,000, while in some cases, some are only given N3,000 while many will go back home with nothing after spending a whole day in the banks.

In the last one week, the crowd at banks across the country sometimes could be mistaken for a political rally. Many businesses have been paralyzed as a result of this anomaly. Some POS operators who are still managing to operate charge N700 for N5000 as others even charge N1000 on N5000 for their services. The online payment platforms that ought to be of help have also proven to be ineffective with several stories of failed transactions to tell.

Of great concern however is reported cases of practices recorded by some banks that have refused to dispense these new naira notes, they have decided to hoard them and dispose them to the highest bidders leaving many Nigerians suffering for no just cause. POS operators should be considerate as they have been of great help since they started operations. It is not only an essential source of livelihood, but has also proved so useful in several communities across the country where there are no banks.

The sad incidences that have been witnessed in most markets during this period particularly in rural areas are decades’ experiences of trade by batter which is gradually coming to play. The exchange of goods for goods was the only option for some traders who could not endured carrying back their goods which were brought to the markets for sale. Those who had perishable goods suffered as a result of insufficient circulation of these new notes and the deadline that the citizens are threatened with. Most people had to sell their products at give away prices.

So many households have been affected by this misnomer as family menus have been largely disorganized or scrambled as a result of inadequate resources to do the usual. Most people have confessed that they have gone without food for days because the little they had were rushed to the bank to meet with the expected change but unfortunately they had nothing to fall back on for survival.

The currency swap is not a problem as the reasons postulated by the relevant authority was convincing but the implementation was faulty. The deadline was the bone of contention. The law provided for a reasonable period but CBN opted for a limited period in a country with a population of more than 200 million which made it controversial.

Reactions to the policy have divided many Nigerian leaders into defenders of public interest and leaders inspired by selfish agenda. This has made citizens  know who have their interest at heart and can serve them sincerely and will also be aware of those who are driven by selfish desires, provided their own personal interests are not affected.

The Manufacturers Association of Nigeria (MAN) have expressed their concern noting that the hiccup in cash supply could lead to a drop of 25 percent in monthly sales of goods within three weeks if not quickly addressed. Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) said, it is needlessly disrupting the economy.

Director General of MAN, Mr Segun Ajayi Kadir said, “the cash flow difficulties have been affecting sales of finished domestic goods. The continued scarcity of the new redesigned naira notes is quite worrisome. With our growth prospects heading further south, we can’t afford a downturn in our Gross Domestic Product. The negative impact it portends for local producers, the agricultural and distributive segments of our economy is huge and may worsen the bashing our economy had received from both external and internal shocks in recent times”.

Governor Dapo Abiodun of Ogun State said, he was left with no choice than to put his scheduled second term campaign on hold because of the unbearable situation of things occasioned by the naira swap and fuel crisis. He noted that “as an administration that is sensitive to the plight of the people, election campaigns in the state would cease until normalcy is returned to the economic activities of the people”.

The situation snowballed into protests in some parts of the country kicking against the in humane treatment the masses are faced with. Angry mobs vandalized banks and gas stations in Oyo, Delta, Osun, and Lagos. In the same vein, Edo Civil Society Organization (EDOSCO) who had different placards with various inscriptions depicting their grievances blocked roads leading to major gridlock at the city centre and its adjourning streets. The protesters last Tuesday blocked the main entrance of the Central Bank of Nigeria in Benin City in protest over naira crunch.

The leader of the civil society group and former Coordinator General of EDOSCO, said, the naira swap policy is deliberate attempt by the Central Bank Governor, in alleged connivance with the Federal Government to subject the masses to untold hardship. He accused CBN of deliberately starving Commercial Banks and POS operators in Edo of cash, having lured Nigerians to deposit all their old naira notes.

The new National President of Nigeria Labour Congress (NLC), comrade Joseph Ajaero has hit the ground running by vowing to mobilize members on a nationwide strike against the current scarcity of fuel and naira notes. He said, “NLC will take upon itself to protect the interest of Nigerians if the Federal Government fails to address the issue. He also promised to pursue a new national minimum wage law that will take into consideration the objective realities of the country’s social economic situation to avoid unnecessary politicking and impunity by employers and reduce the suffering of Nigerian workers”.

President, Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola, said “micro businesses in rural and hinterland areas that largely depend on cash for virtually all transactions are affected by the cash crunch. This category of business is not used to digital and online e-commerce banking transactions, hence quite a number of them couldn’t transact their normal day today business activities. There is no cash anywhere, even to pay transporters to move their farm goods to town which has become a great challenge as transporters need to be paid in cash. The resultant effect of this is that many of these perishable goods are sold at a giveaway prices.