By Rosemary Iwuala
Following Monday’s declaration by the Central Bank of Nigeria (CBN) elongating the validity of old N200, N500 and N1,000 naira notes, Nigerians have been seen reacting in various ways to the development.
Checks by BUSINESS METRICS on Tuesday revealed that while many Nigerians have accepted the reality of welcoming what many have tagged as ‘the second coming of the old naira notes’, many individuals were still sceptical, seen rejecting the currency.
Visit to a few banks in Lagos by this reporter also showed that in some cases, the banks are struggling to meet the avalanche of cash demands from their customers.
Long queue at the Automated Teller Machine (ATM) galleries resurfaced as the machines, loaded with the old notes were besieged by Nigerians who have starved of cash for months as a result of the Naira redesign and cashless policy of the CBN.
Meanwhile, Operators of Point of Sales (PoS), who became the major channel to access cash during the period of acute cash scarcity and charged between N200 and N500 for every N1,000 withdrawn by customers in the Lagos metropolis have adjusted their charges.
What Nigerians are Saying
Mr Marvellous, a POS Associate at Isheri-Idimu, said that he is happy with new declarations made by the CBN, saying that most people prepare to have cash at hand than making transfers to sellers.
“Concerning the charge rate, of course, I will reduce the charges but that’s if I am able to get the old notes. If the old notes are in circulation, I will definitely go back to the normal charge rate of N100 for N5000 and N200 for N10,000 and thereabout,” he said.
A Cloth seller at Orisumbare market in Ejigbo, Lagos, Mrs Nkechi said that businesses are going to improve, now that the apex bank has directed that the old N200, N500 and N1000 banknotes remain legal tender alongside the redesigned bank notes.
She added that since the shortage of cash, businesses became very slow and poor, and that she hardly sells her clothes because there were few or no customers at the market.
According to her, “As a cloth-seller, I wasn’t comfortable with the transfer process from my customers, because most of the time, I don’t get to receive alerts from them due to the poor network from banks, which results in me going to the bank to clarify the issue. However, I expect transactions to normalise due to these new developments.”
Mr Innocent Obasi, a civil servant is another Lagosian who spoke with BUSINESS METRICS. He expressed optimism that now that the CBN has showed readiness to comply with Supreme Court order, this will bring an end to the plight Nigerians are facing due to scarcity of cash.
“At least now, it will revive business activities and also reduce the rate of hardship in the Country, when the money finally starts circulating,” he said.
Miss Chizoba, a cobbler, said that, nothing has changed on her end and that even with the latest developments, it is still a barrier for her.
“I do not want to start accepting the old notes for now because most people I buy my materials from don’t collect the old notes, despite hearing it from the CBN Governor yesterday.
“Some people are not even informed about the announcement made by the apex bank, only a few are aware.
“Even the new money is not even in circulation, likewise the old money too, so it’s still affecting us till now, I hope things get better soon, and we can have access to both the new and old notes,” she added.
Nzewi Onyedikachi Miracle Mario, a small-scale business enterprise owner said that since the inception of this new cash and cashless policy, making ends meet has been excruciatingly difficult and banks don’t pay old cash nor new cash.
He said: “POS charges are outrageously high. So, going by the new declaration of making the old note a legal tender till 31st December, it will ease the suffering of the masses. Today at the ATM, I was able to withdraw N20,000 cash of old note.”
Concerns on Cash Availability Linger
Despite the announcement of the CBN extending the validity of the old notes till the end of 2023, there are concerns that it would take time before Nigerians see respite from the cash flow disruption triggered by the policy.
Muda Yusuf, Chief Executive Officer of Centre for the Promotion of Public Enterprises, had said the policy was gradually grounding the economy to a halt because of the collapse of payment systems across all platforms.
He lamented that digital platforms were performing sub-optimally because of congestion; since physical cash was unavailable because the CBN had sucked away over 70% of cash in the economy.
“It easier to mop up cash in the system than circulating it. Unless serious efforts are made to release and circulate both new and old notes, Nigerians will continue to suffer from the negative impacts of these policy to months to come,” a market analyst said.
Recall that President Muhammadu Buhari had said that out of N3.23 trillion cash in circulation as of October 2022, the CBN had withdrawn more than N2.1 trillion in its bid to phase out the old notes.
This indicates the huge gap that must be filled by the apex bank to alleviate the sufferings of Nigerians now that it has been ordered by the Supreme Court to release the cash for the smooth running of the economy.
