Cash shortage in Africa’s most populated and vibrant economy, Nigeria, has left many stranded while they miss their job to join queues in a bid to change old naira note for a new one which was recently introduced. The issue became so alarming so that the Supreme court of the land had to order for an extension of the deadline which was set for old note to be handed over for new ones.
Worse of the issue is, about 40% of the country’s total population have failed to open bank accounts, a factor which is believed to have contributed to the delay in the entire process. A section of people who have embraced digital payment are somewhat relieved and able to go by their usual day-to-day activities, whereas those who failed to accept the digital development are agitated and frustrated, as they go angry and hungry in their quest to get the new cash even in the build up to the 2023 national elections ending of February.
Business operations are at a halt as people lack cash in had to pay for goods and services. Market women, bus drivers and hawkers are unable to cash in on their products or services but for the corporate sector of the economy where digital payments are mostly incorporated.
The Central Bank of Nigeria (CBN) had given reason that it redesigned the higher denomination notes – 200, 500 and 1,000 naira – to replace the dirty cash in circulation, to tackle inflation, curb counterfeiting and promote a cashless society. The development then ordered for old currency noted to be deposited into bank accounts since October last year; hence the broken financial system, as some financial analyst believe the central bank could not keep up with its responsibility of making sure they worked within given time frame and made available more of the new currency notes.
Paul Alaje, a senior economist at management consultants SPM Professionals revealed “The whole idea was to limit how much cash people have access to, in order to encourage them to make digital payments, so they [CBN] can monitor where money goes.”
Policy analyst and economist Yemi Makinde also argued that “The government has been trying to move the country into a cashless economy for ages,” but the
“Its intention is good, but it is just not feasible, the banking systems were not ready and Nigeria is just used to cash,” he stressed.
Many also believe that the banks are not doing a good job at distributing the money, as some bank managers were report to be keeping a lot of the money aside for people with connections and for the rich. This clearly meant that some banks and bank branches are failing at ensure a implementation of the central bank’s policy the way directed.
Following such reports, agents from the Economic and Financial Crimes Commission, invaded some bank branches and arrested managers who were accused of hoarding the new notes in treasuries rather than putting them in cash machines for distribution.
A new deadline for a proper execution of the program is expected to be introduced in the coming day following the supreme courts order for an extension of deadline since Friday February 10,2023.
Until this morning, queues at banks still spread across various and it does seem to end this soon; even yet people are optimistic.