By Chinwendu Obienyi

There is anger, pain and sorrow in the land with naira notes (old and new) gradually becoming scarce commodities that Nigerians can hardly touch at will.

From the banking counters to the simplest outlets like Automated Teller Machines (ATMs) and Point of Sales terminals as well as agency banking among other channels that are designed to help customers enjoy easy banking transactions, the story today is one of anguish.

Transactions are failing and so is the economy gradually losing steam right from the very first quarter of the year.

At the end of it all, Nigerians are in pain, while PoS operators are suddenly becoming overnight  millionaires having reportedly raised their transaction charges. For example, to withdraw N10,000, customers are often asked to pay as much as N2,000 while they are made to pay N1,000 for N5,000 cash withdrawal.

This development stemmed from the fact that commercial banks across the country are alleged to be lacking cash, and with Automated Teller Machines (ATMs) not dispensing enough cash, the surge in charges by PoS or Mobile Money Operators (MMOs) have continued unabated.

But,since the brouhaha commenced, the Central Bank of Nigeria (CBN) has insisted that it has released sufficient amount of cash to banks to meet the needs of their customers. It has even accused banks of paying money to their priority customers, leaving the vulnerable and retail clients to suffer.

Daily Sun investigations revealed that about four new generation banks resorted to hoarding cash amid CBN’s threats to sanction erring financial service providers.

Recently, the CBN accused some commercial banks in Port Harcourt, Rivers State, of refusing to dispense the sum of N4.5 billion redesigned notes distributed to them.

The controller of the Rivers State branch of the apex bank, Maxwell Okafor, who led an enforcement team on the newly redesigned notes to some commercial banks and markets in Port Harcourt, said that between Thursday and Friday, the apex bank had disbursed about N4.5 billion new notes to commercial banks in the state and wondered why many customers were not getting them.

He expressed worry that some banks in Port Harcourt were frustrating the efforts of the CBN in implementing the disbursement of the new naira notes by hoarding it in their vaults.

Also, the CBN revealed that it discovered N4 million new naira notes hoarded in some commercial banks in Ogun State.

The Deputy Director, banking supervision department, CBN Lagos, Kayode Makinde, said this while monitoring the distribution of the new naira notes. The CBN senior staffer who was obviously angry accused commercial banks of sabotaging the efforts of the CBN to make the new naira notes available.

However, a bank staff who spoke to Daily Sun, said that the supply of new notes gotten from the apex bank were grossly inadequate for banks’ branches with millions of customers. This thus explains why banks in Lagos and other parts of the country have very limited new naira notes in automated teller machines (ATMs) to dispense. 

According to the bank staff, the apex bank has been deliberately rationing them out to banks for reasons best known to it. Either of the situation has, however, created hardship for customers who have since last week been seen in long queues at ATMs across the country.

Further information gathered from another source (bank staff) at Ajose Adeogun, Victoria Island, Lagos disclosed that only one bundle of new N200 notes was allocated to the branch by the CBN. However, Sunday Sun could not confirm how much a bundle of N200 notes could add up to. 

“I have been to the manager begging for cash. But he said there is no cash. When I persisted he told me that the notes were inadequate, I became weak. At PoS, I was offered the new notes at a service charge of N1,000 per N10,000. This cash scarcity may ground a lot of projects. I have a project at hand and need to make cash payments because some of the natives working for me insisted on having cash payment because they said they buy with cash in their locality,” the source narrated. 

Most customers who clustered around banks’ ATM machines at Ajah were stranded because they could not access cash. Some customers who spoke to Sunday Sun said the ATM machines dispense cash only in the morning each day and never get reloaded till the next day.

Felix Alozie, said, “I was here Thursday and Friday last week, I couldn’t get cash from any of the ATMs here. I tried again on Monday and Tuesday no machines dispensed cash. Inside the banking hall, I was told I could only get cash from the ATM. This is worrisome. We cannot completely do without cash, not yet”

PoS operators who have only old naira notes to dispense insisted on a service charge of N1,000 per N10,000 disbursements while those with the new notes insisted on an N2,000 service charge. 

When asked their reason for the cutthroat charges, they explained that they paid heavily to obtain the cash which they said was not even enough for half a day’s operation. 

However, it is important to note that the money is not sufficient and that is because the CBN has said from the beginning that it cannot release the quantum of money released earlier under the old notes arrangement but it will reduce the money it will feed the banks with, because it is expected that consumers will explore other channels of transactions like PoS, eNaira, USSD, mobile money agents and other platforms.

It is widely held that Nigeria is a cash centered economy, while advanced countries have since started exploring other mediums of payment with excellent outcomes.

Right now the idea is to turn Nigeria into a cashless policy and so it is expected that change is not easy to adopt. This move by the CBN will equally help to track transactions because with cash, you will not know who is who anymore but anyone who is using the channels for higher and voluminous transactions that can cause problems like terror financing can be easily tracked.

Researchers hold that awareness and the use of cashless payments channels and instruments have improved considerably within the last decade. However, records show that only 0.7 per cent of people with bank accounts utilised post of sales services, 0.8 per cent of financially included economic agents utilized the internet and below 2.5 per cent utilised mobile devices to facilitate financial transactions.

The non-existence or lack of banking presence in rural areas could also mean that a good number of the universe of rural settlers have no access or minimal access to formal banking services and payment channels and instruments.

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No doubt, a safe and efficient cashless payment system is seen as the gateway to improved access and usage of bank financial services. However, it is safe to say that a cashless payment system that is unsafe and inefficient could impair penetration, access and use of bank financial services.

This is why the CBN’s cashless policy is geared towards safeguarding the interest of Nigerians as represented in the bank’s 5-Year Policy Thrust (2019 – 2024) which was launched by the CBN Governor, Mr. Godwin Emefiele at the inception of his second term in office.

According to him, all infrastructure that is needed to ensure a smooth working cashless system such as the CBDC, online banking, Payment System Banks (PSBs), point of sale terminals (PoS) agent banking, mobile banking and ATMs have since been deployed.

“The destination as far as I am concerned is to achieve a 100 per cent cashless economy in Nigeria. I know that those who doubt us will say that 100 per cent cashless is unattainable. Yes it is true, but Nigeria must move from being a predominantly cash economy to a predominantly cashless economy,” he stressed. But at a recent briefing with newsmen on Friday, Emefiele expressed sadness at the scarcity of notes and appealed to Nigerians to exercise patience, describing the development as a transient and temporary phase.

Emefiele said some of the unscrupulous bank officials who were involved in the sale of the new notes have been arrested by security agents and will face trial.

He stated that the CBN is mindful of the challenges some Nigerians have either faced or is facing and is hell bent on addressing them.

“Unfortunately we do see that there will be some transient or temporary pains, but we are appealing to Nigerians and we are begging. We are on our knees begging people to please show understanding. 

Do not destroy bank properties because bank properties are meant to serve you. At this time that we are facing this temporary and transient situation, we crave everybody’s understanding. Please be calm”, he pleaded.

The CBN Governor further disclosed that the bank will meet with telcos, mobile money operators over surge in charges as regards cash transactions.

Earlier, President Muhammadu Buhari indicted some banks’ Chief Executive Officers, and CEOs on the scarcity of the naira notes in circulation, accusing them of selfishness and inefficiency, saying that they have not done well in circulating the new notes.

The President also urged Nigerians to give him seven days to resolve the cash crunch that has become a problem across the country from the policy of the CBN to change high-value Naira notes with new ones.

The President spoke to All Progressive Party governors who met him at the Presidential Villa to seek a review of government policy on the Naira, arguing that a review would ensure solutions to the cash crunch which they said was threatening the good records of the administration in transforming the economy.

Reacting to the President’s speech, the Association of Corporate Affairs Managers of Banks (ACAMB) has insisted the financial institutions do not have any reason to hoard the currency in the face of enormous hardships facing Nigerians.

The association also argued that banks have invested over N100 billion in the past few years in setting up and maintaining cutting-edge electronic channels as part of the ongoing commitment to building seamless customer experience and real-time digital financial transactions.

ACAMB in a statement signed by its President, Rasheed Bolarinwa, also said it is fully in support of the enhanced cashless policy championed by the Central Bank of Nigeria (CBN). 

This was even as the body added that it is working with other stakeholders to urgently address constraints in the implementation and ensure that Nigerians suffer no untoward pains in the transition process.

“Nigerian banks remain committed to continuing investments in seamless and secured digital banking that excite customers to voluntarily use and rely on the various digital and alternate payment systems available.

In view of its numerous benefits and the cutting-edge capability of the Nigerian banking sector, ACAMB fully supports the enhanced cashless policy championed by the Central Bank of Nigeria (CBN)”, he said.

According to him, Nigerian 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. 

“ACAMB affirms without any equivocation that banks are not in any way hoarding or holding back naira notes or engaging in any act inimical to our avowed commitment to exciting customer experience. 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”, he stated.

Bolarinwa further urged the Nigerian banking public to exercise patience and not to resort to any untoward behavior against bank staff or banking facilities. 

He said, “Banks and customers are inseparable stakeholders as they exist for one another. It is therefore detrimental to the interest of the general banking public to disrupt banking operations by untoward actions against Bank staff or vandalisation of banking facilities”.

The truth of the matter is that as painful as the development might be to Nigerians, the cost of currency management is high when we depend on cash, thus, with the cashless policy of the CBN, more people are going to come into the banking sector. This would ensure that the CBN has an idea of how many Nigerians are in the banking sector and then design monetary policy on that figure.

Highlighting the benefits of the naira redesign policy, Emefiele said that generally currency redesign policies (sometimes called demonetization policies) are designed by countries to strengthen the performance of key macroeconomic parameters and equally combat social improprieties.

He added that the policy is expected to reduce the amount of cash in the underground or illicit economy, truncate the activities of racketeers, and obliterate rent-seeking businesses in the black market. “By reducing currency outside banks, it will shrink money stock and accordingly lower the long-run path of inflation. The ensuing deflationary pressure could elicit interest rate cuts that will in the short- to medium-term boost economic activities, spur aggregate demand, and enhance output growth. The macroeconomic impacts of currency redesign are multidimensional and could seem uncertain especially at this early stage when its inconvenience is widespread.