Naira scarcity: We don’t want to relive the Emefiele treatment, Nigerians cry out

There are indications that the cash scarcity that grounded the economy and caused untold hardship to Nigerians early this year has resurfaced. BENJAMIN SAMSON in this report speaks with Nigerians who narrated their experiences.

Local currency scarcity is here again ten months after a similar situation when the Central Bank of Nigeria (CBN) re-designed the Naira that led to panic withdrawals across the country. Nigerians faced severe cash scarcity between December and March when the former governor of the CBN, Godwin Emefiele, announced that old N200, N500 and N1, 000 bank notes would cease to be legal tender.

Citizens’ ordeals

Some residents of the Federal Capital Territory (FCT) are jittery fearing that cash scarcity might have actually resurfaced in the country. Anxious bank depositors have called on the CBN governor, Yemi Cardoso, to prevail on commercial banks to give them access to their savings. They said withdrawal limits of between N10, 000 and N50, 000 have been imposed by many banks.

 At one of the banks in Nyanya, Abuja, where none of the ATM terminals was dispensing cash, customers were made to take numbers and wait for their turn before accessing the banking hall, similar to what happened earlier this year. Inside the banking hall, some of the customers who had earlier filled withdrawal forms for cash above the N50, 000 limit were asked to adjust their requests as they could not get more than the limit.

 A customer, who simply identified himself as Ibrahim, told this reporter that the N50, 000 was even an improvement because between Monday and Wednesday, the limit at the branch was N20, 000. He said it was painful that he spent many hours waiting only to receive less cash than what he needed.

 The situation was the same at another bank in the area, but with fewer crowds and only one of its ATM terminals was dispensing cash. However, the limit was N50, 000 per day.

 Customers, who lamented that they were being forced to take less cash than they needed, wondered why the situation was happening again, especially with the festive season just two weeks away.

 They accused the banks of hoarding cash and called on the CBN governor to intervene and save them from unnecessary hardships.

 The situation was the same in Mararaba area of Karu local government area in neighbouring Nasarawa state where banks had crowds outside.

None of the ATM terminals was dispensing cash and when asked if there was cash scarcity, the bank staff said it was temporary. PoS operators around the banks, however, had cash but limited withdrawals to N10, 000 per card and hiked their charges. Charges on N5, 000 withdrawal was increased from N100 to N200.

Speaking with this reporter, a customer pleaded with the government to prevent what happened earlier this year from happening again.

 “Let us cry out now and beg them. From the little we have, let us even get something to eat. We suffered a lot during the cash swap era at the beginning of this year. What do they say is the problem this time?”

 Residents of the area also said they have been experiencing cash scarcity for over two months, adding that the situation has, instead of improving, gone from bad to worse.

A customer who gave his name as Hayatudeen said, “Many banks said they don’t have enough money to give to customers and when you inquire, they will not give you any satisfactory explanation.”

 He noted that the story is the same with PoS operators because they are also complaining of cash scarcity.

 “Even though most of the PoS operators get their money from traders and other business operators, they still complain of the scarcity.” He further alleged that many PoS operators have increased their charges by about 50 per cent.

 A resident, Haruna, said banks have not been giving cash for almost two months now and that they are at the mercy of PoS operators who have limited withdrawals to N5, 000 per customer and imposed a fee of N500 per transaction.

 A resident of Lugbe in Abuja, Eunice Udida, told Blueprint Weekend that PoS agents now charge higher than the usual rates for withdrawals.

 “I was in Lugbe on Sunday evening and needed to withdraw cash. I was shocked when they said the cost of withdrawing N5, 000 had risen from N100 to N200. When I asked for the reason, the PoS agent said she got N300, 000 with N5, 000.”

 Another resident, Halima Bala, said, “Imagine, I filled a teller to withdraw N30, 000, but the lady at the counter told me, ‘Madam, I don’t have this kind of money to give to you; I have only N5, 000 which is our limit’ and when I asked her why, she couldn’t give me any answer. What happened early this year is repeating itself. Emefiele is being held as we speak because he became the scapegoat; this time who are they going to arrest for this?”

Unstocked ATMs

In Abuja, this reporter who went around some commercial banks in Asokoro observed that most of the banks’ Automated Teller Machines (ATMs) had run out of cash.

This has left many people to resort to patronising PoS agents who also complained that they could not withdraw sufficient cash from their banks.

A Bureau de Change operator in Abuja, Gidado Bala, said, “Although BDCs rarely use physical cash for transfers these days, banks have begun to limit huge cash withdrawals and it may be because of the deadline of December, but we don’t know,” he said, adding that “BDC operators usually get cash in minimal quantities at the banks.”

A store owner, Chukwu Ani, said he had to limit cash transactions with suppliers as customers rarely come with physical cash and “banks hardly give the required cash withdrawals.”

 “We don’t understand the situation and we hope it won’t be the situation like the early part of this year when we suffered for cash.”

 CBN’s assurances

This is coming weeks after the CBN had affirmed that it had enough currency notes in the market and hence no need for panic withdrawals by members of the public.

In a circular titled ‘All Banknotes Issued by the CBN Remain Legal Tender,’ signed by the director, corporate communications, Isa AbdulMumin, the bank stated that it was aware of the reported scarcity of cash across some major cities. It noted that there had also been concerns among some members of the public over the legality of old Naira notes.

 “For the avoidance of doubt, while reiterating that there are sufficient banknotes across the country for all normal economic activities, we wish to state unambiguously that every banknote issued by the Central Bank of Nigeria (CBN) remains legal tender and should not be rejected by anyone, as stipulated in Section 20(5) of the CBN Act, 2007,” the circular read in part.

 It cautioned members of the public to avoid panic withdrawals and stressed that it had enough currency notes to facilitate normal economic activities.

PoS operators

However, a PoS agent who spoke with this reporter said cash started to become scarce in Abuja early November and that things became severe this December.

 “We first noticed that it was difficult to access cash in early November, however, by December it had become difficult. We heard that commercial banks were mopping up the old legal tender and wanted only the new ones in circulation. Things have become so bad that we now charge N400 for N6, 000 withdrawals,” he said.

 Another PoS operator, Simisola Adedeji, said, “It has been tough withdrawing huge volumes of money in banks and what we are hearing is that they want to withdraw the old currency. We only plead that we should not experience the scarcity witnessed during the cash swap because many people lost their lives.”

An Abuja resident, who identified himself simply as Mr. Chukwuemeka, said, “I went to many banks and they were not dispensing money. I went all the way from Mararaba to Wuse in Abuja before I was able to withdraw in a bank.”

He stated that many PoS agents had been withdrawing all the cash lodged at various ATMs.

 “Immediately the bank loaded money on the ATM, they (PoS agents) are the first people to know; they would just use their cards to withdraw the money; that is what most of them normally do.

 “I had to trek a long distance, going from one place to another until I got to where I was able to withdraw cash,” he said.

 Bank staff

A bank staff, Aisha, told this reporter that the scarcity was caused by people hoarding cash for fear that another scarcity would happen next year.

 She said, “There is cash scarcity because people are scared of the scarcity itself. A lot of people are starting to hoard their cash, which is restricting cash circulation. Usually, people would bring cash to the bank, but these days we barely get enough cash for daily transactions.”

Another bank staff who spoke on the condition of anonymity blamed the cash scarcity on weak supplies from the CBN.

“It is the CBN that is responsible for this cash scarcity. We are not getting enough from them. They are just causing unnecessary suffering for the masses,” he said.

 On his part, another bank staff, Aliyu Hameed, said supply was low; hence the shortage.

 On why traders, especially in village markets, don’t accept transfers, he said, “Many of them, especially in the North, have been short-changed by some unpatriotic elements.

 “It has happened several times, especially during the cash crunch in February and March. Some dubious people would make phantom transfers to the traders, especially in the villages, and by the time they go to the bank, nothing is in their accounts.

 “It has also been difficult for such people to lodge complaints in banks because apart from the telephone numbers of the people that duped them, there is nothing to show as evidence.”

An expert’s take

In a chat with this newspaper, an economist, Femi Ayoola, said more needed to be done in terms of increasing alternatives to cash.

He said, “This news surfaced a few weeks ago, and some of the banks I visited gave out cash to their customers. If there is a limitation at all, then it means something is driving it. But I see no reason because there is no issue regarding whether it’s new notes or old notes; that problem has already been resolved. But if anything is driving this report, I think we need to find out.

 “Maybe they want to encourage online banking and things like that. But I don’t think there is anything like a cash squeeze now. I will try to visit some banks and see for myself. The information I have now doesn’t suggest anything like a cash squeeze.

 “The CBN hardly has control of the whole cash issues, and they need to be very clear on if it is the old currency we are using or the new; they are the custodian of our currencies. However, we as a country are on a good trajectory. In terms of raising other channels of payments, more needs to be done.”