Business
As the banks have started to disburse more cash to customers and the long queues beginning to reduce at the Automated Teller Machines, ATM, many Nigerians are expressing mixed reactions to the motive behind the policy of redesigning the banknotes and the pains it inflicted on Nigerians for over 12 weeks. Though some Nigerians agree that the cashless policy is good, but that its implementation was ill-timed and that millions of Nigerians may turn their back to banks and banking services in the country.
By Kennedy Nnamani
FOLLOWING the disbursement of all the denominations of the old banknotes by the Central Bank of Nigeria, CBN, in line with the Supreme Court directive, long queues are gradually disappearing at various banks as well as the Automated Teller Machines and economic activities of Nigerians are therefore beginning to return to normal.
Although this normalcy has generated a lot of criticisms and questions from the citizens ranging from why the Federal Government, FG, and the CBN decided to implement this cashless policy and how prepared were they before introducing the policy and if the policy was meant to favour the minority rich or the majority poor, the question which many have not asked is if the cashless economy is ideal for a growing economy like Nigeria and the extent to which the policy can benefit the public.
Nigerians have experienced a huge cash crunch for over 12 weeks and this, in turn, has caused a great change, adjustment and readjustment in the economic behaviour of the people. And like the era of COVID-19 in 2020, many Nigerians resorted to other ways of getting things done without using raw cash, and a lot of opportunities were also created in the Fintech space to bridge the gap and meet the increasing demand of online transactions.
Meanwhile, many money agents exploited that opportunity to hike their charges for transactions, especially for withdrawal of the limited cash which they also claimed that they bought from the banks. Unfortunately, they will no longer enjoy this exploitation as both banks and ATMs have started dispensing cash, thanks to the CBN and its policy implementation tactics.
At the introduction of the new banknotes which was announced by the apex bank on October 26, 2022, both the FG and the CBN had explained that the purpose was, among other reasons, to mop up excess cash that are out of the vaults of banks and to combat counterfeiting that is on the increase as well as to curb inflation.
Despite the reasons given by the CBN, many politicians criticized the timing of implementing the policy, alleging that the FG took the decision as a direct attack on them so as to prevent vote buying during the February 25 presidential and National Assembly election.
Recently, the central bank announced that it has disbursed banknotes to the commercial banks and that it would ensure that the customers receive the money. Isa AbdulMumin, the Acting Director, Corporate Communications of the CBN in a statement on March 24 noted that the CBN has disbursed a substantial amount of money in various denominations and directed all commercial banks to open for operation on Saturdays and Sundays to meet their customers’ demand.
AbdulMumin added that Godwin Emefiele, the CBN Governor, has directed all banks to load their Automated Teller Machines, ATMs and would personally monitor compliance of the commercial banks to the directive.
While urging Nigerians to be patient, he assured that the current situation would soon ease off with the injection of more banknotes into circulation.
Reacting to the sudden change of mind of the central bank, some Nigerians have expressed mixed feelings towards the policy. To some, it was a waste of time because, according to them, the CBN did not achieve anything with the policy while others applauded the return of cash to the system.
According to a commuter who identified himself as James Adetutu, who spoke to Realnews, noted that the CBN meant well for Nigerians, but the wealthy politicians hijacked the policy to their own advantage.
“I think Nigerian politicians took advantage of the policy just for their own gain. These bad politicians do not want anything that will empower the masses because it will make the youths to be engaged and those politicians will no longer exploit them during elections,” Adetutu said.
In the same vein, Amaka Uzor, a business woman noted that the advantage of the cashless policy would have been huge in the long run if it was allowed to continue.
According to her, the prices of things were already coming down because there was not enough money to purchase goods.
“When customers come to buy something, they don’t have enough cash so they only make use of the little they have and we must sell because we must maintain turnover. In turn, we also go to the dealers and buy at the rate that we can afford; they too must had to sell because they must also maintain turnover.
“So if this policy was left to run for a while, I believe it would have stabilized the price of goods,” she said.
In addition, Realnews observed that the cost of transportation, which gradually reduced during the cash crunch is gradually taking an upward turn since the recent disbursement of the old notes.
It was observed that during the cash crunch, from Ikeja along to Egbeda, Iyana-Ipaja, which used to be N300 at rush hours went as low as between N150 to N200. However, it has returned back to the initial price of N300.
And the intervention of the Lagos state government contributed in easing the stress of the people by announcing a 50 percent reduction on all initial fares with the Bus Rapid Transit, BRT during the cash crunch.
However, the state government, in a statement on March 28, revoked this rebate on the fare, noting that all BRT fare should return to the initial price from April 1.
However, Mayor Akinpelu, Publisher of Global Excellence Magazine, while speaking to TVC news on the programme, Journalist Hangout, criticized both the cashless policy and its implementation and the disbursement of old notes by the CBN.
To him, the CBN made no prior plan to cushion the avoidable effect of the cash crunch despite ordering the commercial banks to operate during the weekend.
He alleged that the commercial banks have not been given enough money to disburse to the public as stated by the CBN.
He disclosed that he went to a bank and was told that the bank has not had money for three days and thus they were already closing their doors.
“I asked the manager and he said the money they gave to them, they started giving to people N20,000 initially, but because of the crowd, they had to reduce it to N5,000 and at a point, they didn’t have enough money again. So they have to close their door because they don’t even have enough money to give to people.”
To Nathaniel Edeh, a spare part dealer, the policy was introduced to prevent rigging during the elections, but it later became a different ball game as it appeared like it was to inflict pain on the general public.
“If their aim was not to cause pain to us, why then did they bring back the money after the election?
“They wanted to see how Nigerians will react to the policy which they have used to divert money to their pockets,” Edeh said.
Generally, the decision of the Central Bank to reinject more of the old notes to the economy at the point when Nigerians are getting adjusted to the system has eased the pain of Nigerians, but the damage to the economy is colossal.
KN
Tags: Amaka Uzor Central Bank of Nigeria Godwin Emefiele Isa Abdulmumin Kennedy Nnamani Supreme Court
