New Telegraph

Cash crunch: Nigerians lament despite CBN’s efforts

•…As Apex Bank insists there’s N1trn new notes available

Despite directives by the Central Bank of Nigeria (CBN) that banks can now dispense and accept the old N500 and N1000 notes following the Supreme Courts judgment, Naira scarcity still persists in Lagos and other parts of the country. PAUL OGBUOKIRI reports that many customers are besieging banks for the cash, which the commercial banks say that they don’t have

Where are the new, old Naira notes?

It was been observed that though most of the Deposit Money Banks(DMBs) in the country have confirmed that the Central Bank of Nigeria (CBN) has directed them to start accepting old Naira deposits and disburse same to customers, most of them complained that the old Naira notes they have not been directed to start paying customers those they collected from customers earlier, which have been accounted for to the Central Bank. Hence, they do not have enough to dispense to the customers. Sunday Telegraph saw customers in large numbers at the entrance of some commercial banks visited around Iyana-Ipaja, Ikotun, Ikeja, Sango, Oshodi, Cele and other areas of the state with a hope to get cash. A bank customer, Debora Opoola, expressed worry, saying that the cash crunch still persisted, in spite of the CBN’s directive on the recirculation of the old Naira notes and willingness of the public to accept it. “I just entered the bank but I was told that there was no cash. Both the old and new Naira notes were not available for us to collect. There are still so many queues at the banks and many of the banks were not paying yet.” She lamented that PoS operators still charge as much as N300 for every N1,000 they pay to customers. This is as a PoS operator at Cele Bus stop, who simply identified himself as Alfa, disclosed that he has started collecting and paying out the old Naira notes but he’s yet to get them easily from the banks. He urged the CBN to ensure return of money into circulation, saying that “we are tired of going back and forth. “I will suggest for us to have access to money. CBN should set up a merger with government agencies like non-interest banks, discount houses, finance companies, among others, to ensure banks comply with the order.” Mrs. Odusote, a cold room operator in Alimosho, expressed joy over the declaration of the old Naira notes as legal tender till December. She, however, said that she wished the banks would begin to pay the banknotes without delay. “CBN should make the money available to banks and put strict measures in place to ensure that they pay and also collect it back when customers come to deposit. It is taking too much time, and may lead to panic,” she added. Meanwhile, our correspondent, who visited some major markets in the state reports that many traders are already complying with the CBN directives as many traders were collecting the old N500 and N1000 notes from customers. The CBN, in a statement early in the week, signed by its acting Director, Corporate Communications, Mr. Isa Abdul- Mumin, directed the commercial banks to comply with the Supreme Court judgement of March 3. CBN said: “Accordingly, the CBN met with the Bankers’ Committee and directed that the old N200, N500 and N1, 000 banknotes remain a legal tender alongside the redesigned banknotes till December 31.”

Emefiele tenders apologises for e-payment glitches

The Central Bank Governor, Godwin Emefiele, said the bank has printed and pushed out into circulation about N1 trillion new Naira notes, adding that the apex bank has aligned with the Supreme Court’s judgment. He assured Nigerians that the Central Bank would continue to pump more currency into the system but with caution. The CBN boss expressed confidence in the nation’s commercial banks, stating that they have remained resilient with capital requirement at 13 per cent, non performing loans at 4.2 per cent and cash reserve of the banks rising to N14 trillion. He further apologised to Nigerians for the glitches experienced while trying to effect various e-payment transactions. Since the apex bank started the implementation of the forced cashless policy vide naira redesign, which began acute cash scarcity, several transactions on the e-payment channels had been hanging and this has caused several crises and misunderstanding amongst clientele and many Nigerians. Emefiele made the apology at the post- Monetary Policy Committee (MPC) briefing in Abuja early this week. He noted that some “isolated cases still persist” but these cases were being resolved.

CBN may not recirculate old notes

Sources close to the CBN told one of our correspondents on Wednesday that the apex bank might not release the old notes in its custody to banks anytime soon, arguing that doing so might be tantamount to reversing the “progress” it had achieved on the cashless initiative. Also, a senior bank executive, who spoke on condition of anonymity, said: “The CBN did not print enough new notes and does not want to return the old notes it has collected because it is still driving its cashless policy.” Also, a top industry executive close to the CBN said the apex bank might not return the old notes to banks because it would reverse its cashless policy. The Managing Director of a tier-2 bank said the CBN had yet to officially communicate to banks on whether it would release old notes to them or not. He said: “We don’t know if the CBN has destroyed the old notes in its custody or not. As we speak, we don’t also know if it will release the old notes to banks again but the truth is banks don’t have much of these old notes in their vaults. Sadly, customers are not depositing much again. “Many of us are expecting the CBN to disburse the old notes this week. “People are not depositing old notes again. A branch that gets close to N100million in cash deposit or more, can hardly boast of N1million now. Most of our branches are advising customers to use alternative channels to transfer funds.” He said: “There is no money. We do not have enough cash. We barely opened till 12:00pm today because we had exhausted our cash. Customers are no longer bringing in funds via deposits and the CBN is not giving banks money.” Meanwhile, some economic analysts have reacted to the development. The Director of the Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, said: “What I think should happen is to first ascertain the validity of the statement that all the old notes have been recycled because I do not think that all that money should have been destroyed so quickly. The President needs to carry out an audit. “Secondly, all along, I expected that the CBN should have been printing more currencies because we have been on this for some time. So, I expected that by now the amount of new currency in circulation should have increased.” Meanwhile, findings showed that some commercial banks along Isolo and Airport Road in Lagos disbursed cash to their customers on Wednesday. Findings showed that the First Bank branch in Isolo, Lagos, paid its customers, but there was a large crowd of customers in queues. Also, the ATMs did not dispense cash. Also, a Polaris Bank branch along College Road in Isolo disbursed old notes. Wema Bank and FCMB adjacent to the Polaris Bank disbursed cash but the queues were very long. Meanwhile, all Automated Teller Machine stands visited were empty.

eNaira wallet transactions climb amid cash shortages

Meanwhile, Sunday Telegraph reports that the number of eNaira wallets has jumped more than 12-fold to 13 million since October, and the value of transactions has climbed 63 per cent this year. Nigerians have been turning to the Central Bank of Nigeria’s digital currency amid cash shortages, Bloomberg reports. The number of eNaira wallets has jumped more than 12-fold to 13 million since October, and the value of transactions has climbed 63 per cent to N22 billion ($48 million) this year, the Central Bank governor, Godwin Emefiele, told reporters at a press conference. The CBDC was introduced in October 2021. Nigeria has been struggling with a crippling cash shortage since the apex bank started replacing old naira notes with new ones late last year. Currency in circulation has slumped to about N1 trillion from N3.2 trillion in September, Emefiele said, according to Bloomberg. The shortage of notes has left many people in the country of about 218 million struggling to pay for basic needs. Even so, the eNaira isn’t a straightforward alternative. The country has a $220 billion informal economy that thrives on cash and too few merchants and too little infrastructure for extensive eNaira use.

NLC threatens nationwide strike

The President of the Nigeria Labour Congress,(NLC) Joe Ajaero, has directed public sector workers in the country to embark on strike beginning from Wednesday. He also directed that affiliate unions constituting the Nigeria Labour Congress should also be on standby for picketing exercises across all branches of the Central Bank of Nigeria nationwide. The directive followed an earlier ultimatum issued by the Central Working Committee members of the NLC last week criticising the cash swap policy of the Federal Government. Ajaero said the decision to picket CBN branches became necessary, as the Federal Government and the CBN have not shown any commitment to addressing the situation. He lamented that despite the Supreme Court order allowing the old N500 and N1000 notes to circulate with the new notes till December 31 this year, the situation appears to be getting worse as workers cannot access cash to pay fares to work, nor can they buy food for their families. Briefing reporters on Wednesday at the headquarters of NLC, the apex Labour union also criticised the pricing irregularities in the petroleum sector, which was also a cause for concern. “Last week, we gave an ultimatum for the review of the cash crunch bedeviling the country but we have discovered to our dismay that as at this moment, not much effort has been made to ameliorate the situation.

The government is still foot dragging on these issues we raised. “Based on this, we met again this morning to review our position and resolved that by Wednesday next week, all CBN branches will be picketed. “Workers are directed to stay at home too because people cannot eat, workers can no longer go to the office. We have been pushed to the wall. We have decided to take our destiny in our hands. We have mobilised our workers for this exercise,” Ajaero stated.

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