Queues persist as Nigerians hoard naira notes
Queues have persisted in commercial banks in major towns in the country, despite the repeated assurances of the availability of cash in various banks by the Central Bank of Nigeria (CBN), findings by Daily Trust showed. An investigation by this paper revealed that the scarcity of the naira notes persisted as Nigerians hoard the currency […]
Queues have persisted in commercial banks in major towns in the country, despite the repeated assurances of the availability of cash in various banks by the Central Bank of Nigeria (CBN), findings by Daily Trust showed.
An investigation by this paper revealed that the scarcity of the naira notes persisted as Nigerians hoard the currency while Point of Sale (PoS) operators are also mopping up the available cash from Automated Teller Machines (ATM).
While queues are thinning up in highbrow areas in Lagos, there is still a high flow of customers wanting cash in Ikeja, Alausa, Ogba, Agege, Badagry and Apapa, among others.
Daily Trust discovered that PoS operators are always among the first to arrive at ATMs to mop up available cash for their business. Despite the limit per withdrawal, they are able to get more cash by using different ATM cards.
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Some of the operators confided in Daily Trust that they had to resort to the tactics because banks have not started giving them cash as agents.
“Banks have not started giving us cash like before. As agents, we were entitled to as high as N500,000 in the banking hall before the scarcity but now, we get between N20,000 and N50,000. So, we have to get to the ATM as early as 5:00am to get as much cash as possible with many ATM cards for our business,” said a PoS operator in Ketu, Oluwaseun Raji.
Another operator in Ado-Ekiti, Adewale Adekunle, said to avoid confrontation with other Nigerians, they go with their friends to queue.
It was learnt that some of them also have good relationships with banks’ security guards who alert them whenever ATMs are loaded with cash. In some instances, they also reserved the early numbers for them.
However, the operators have reduced their charges to N100 per N1,000 unlike in the past when Nigerians paid as high as N400 per N1,000.
Nigerians hoarding cash over fear of another cash crunch
Our reporters observed that some Nigerians are also hoarding the cash in their possession instead of transacting with them.
A civil servant, Temitope Tijani, said Nigerians are hoarding the cash because of the scarcity faced in the past
“I am also reluctant to spend the cash with me because I know the stress I went through to get them. Nobody wants to be caught in such a situation again, so, I don’t blame those hoarding them,” he said.
An Abuja-based trader, Maxwell Rotimi said: “I cannot explain why I still have the feeling that this cash scarcity will not go away easily. The way we behave in this country is different. Look at how the fuel queues have endured.
“With the way these PoS operators are mopping up this cash, I am afraid they will continue to create artificial scarcity and I don’t know how far the CBN is prepared to continue to pump notes. So, I’m just playing safe by keeping more cash with me.”
However, long queues, which were a usual occurrence at banks’ Automated Teller Machines (ATMs) following the new naira policy have disappeared in the Kaduna metropolis.
Our correspondent observed that the entrance to many banks, which had over the past few weeks remained closed, are now open to all customers.
Customers flooded commercial banks in the state at the weekend to withdraw as high as N50,000 in some banks while in other commercial banks, customers were only allowed to withdraw N30,000 based on the cash available. An official in one of the banks who did not want to be mentioned said the withdrawal limit could be exceeded depending on the availability of cash at the bank’s disposal.
He noted that for now, there was no fixed withdrawal amount, adding, “It may rise or reduce, depending on the available funds.”
Pump more cash into circulation, experts urge apex bank
A development expert and Executive Director, Centre for Transparency and Integrity Watch (CefTIW), Umar Yakubu has urged CBN to improve cash circulation to ease queues from ATMs across the country.
He noted that although queues have begun to ease off, the amount of cash available is still insufficient.
“If you notice, cash in circulation is still insufficient, which is why the queues in banks persist. Also, PoS operators who still make brisk business populate ATMs and evacuate the little cash available.
“As such, there is a need for more cash so it can go round even though the situation has improved, more needs to be done,” he said.
Umar however noted the naira redesign policy and cash crunch have improved the cashless policy drive of the federal government as many Nigerians have resorted to cashless transactions.
“Yes, the situation is not as bad as it used to be. At least, we can see cash now that the government has prevailed on the POS operators to revert to the old charges,” Mr. Ahmed, a resident of Ojodu in Lagos said.
Lagos State chairman of the Nigerian Association of Small and Medium Enterprises (NASME), Dr. Adebayo Adams in a chat with our correspondent said many people might be withdrawing cash in banks and storing the currency at home with their experience in the last two months.
He advised the CBN to realise that Nigeria remains a cash-based economy, saying the cash scarcity has a very negative effect on business activities in Nigeria.
He said, “With what has happened, a lot of people are going to withdraw the cash and keep it at home. They will not keep their money in banks again, especially traders.
“Look at the number of businesses that have collapsed in the last eight weeks. In the last eight weeks, more than 40 per cent of small businesses have almost gone into extinction, especially those that based their operation on cash transactions”.
He also called for infrastructural upgrades in banks to ease their online transactions, adding, “There would be a lot of pressure on the ATMs. So, we need an update on infrastructural support for the banks.”
Those hoarding cash will have their fingers burnt – CBN
Efforts to get the reaction of the CBN spokesperson, Dr Abdulmumin Isa were not successful as he could not be reached on phone. However, a senior management source said: “ The CBN is aware of the attitude of the PoS operators but before long, they will have their fingers burnt because we will continue to pump more cash until we get to a saturation point.
“In most states today, the situation has improved drastically, so before the end of the week, what is left of the queues and anxiety will fizzle out”.
Emefiele urges NLC to shelve protest
The governor of the CBN, Godwin Emefiele, on Monday appealed to the Minister of Labour and Employment, Chris Ngige, to prevail on the leadership of Nigeria Labour Congress over its planned protest slated for Wednesday.
The NLC had last Friday mobilised its affiliate unions and the state councils to shut down offices of the apex bank nationwide over current cash scarcity in the country.
But at a closed-door meeting in Abuja yesterday, Emefiele was quoted as saying the protest would hinder the progress of the CBN if not averted.
The NLC President Joe Ajaero led other labour leaders while Emefiele led the apex bank officials to the meeting that was later presided over by the Minister. An official of the ministry, who attended the meeting told Daily Trust anonymously that Emefiele promised to ensure that all commercial banks were given enough cash from the CBN’s vault.
“You would notice that the CBN had since last Friday directed commercial banks to open during weekends to ease the issue of cash crunch. The governor (Emefiele) was here to talk to the Minister to prevail on the labour leaders.
“He (Emefiele) said the protest will disrupt a lot of things in the bank, hence his reasons to heed the minister’s call who is a Chief conciliator”, the official told Daily Trust. None of the trio spoke to journalists after the closed-door meeting.
A statement is yet to be issued either by the apex bank or the ministry regarding the meeting as of when filing this report last night.
But the NLC President in a formal invitation to our correspondent said he would brief the press on Tuesday regarding the outcome of the meeting.
From Abiodun Alade, Abdullateef Aliyu (Lagos), Maryam Ahmadu-Suka (Kaduna), Philip S. Clement & Idowu Isamotu (Abuja)