Eko Hot Blog reports that Uchenna Godfrey, a 30-year-old businessman, who owns a supermarket in the Ojodu area of Lagos, complained that he had lost a great deal of revenue in the last two weeks.
He had been unable to pay some of his suppliers during this period because he could not lay his hands on cash. The naira scarcity that has raised social tensions across the country had made him shelve taking delivery of certain products pending when the situation would improve. This has caused his inventory to deplete significantly, resulting in a substantial drop in his profit during this period.
“Since I started this business, there is a particular set of suppliers that I pay with cash,” Godfrey said during a chat with Punch
“The woman that supplies me cake, I pay her through cash. In fact, apart from products that I buy from the market, for many products here, especially snacks, I pay the suppliers with cash. I always pay cash. So, for some weeks now, I haven’t been able to buy from some of them because almost all my customers are now paying through POS.
Amid the dramatic switch to e-payments, which in itself has been fraught with technical difficulties due to the increased pressure on the bank payment platforms recently, Godfrey’s inability to take delivery of products from some of his suppliers has been further compounded by a barrage of requests by frustrated customers in need of cash to carry on with their daily endeavours.
“Because the POS charges are very high now, many of my customers do not want to withdraw from the operators. They come to me because they believe that since I run a supermarket, I will have excess cash. So, they beg me to use my POS and take money from their accounts and give them cash. It is not easy for me, but I try to help those who are my loyal customers.
Godfrey’s story signposts what many businesses challenges currently contending with because of the acute scarcity of naira notes in the country.
In fact, when the story of cash-strapped businesses is told, Godfrey would likely stand behind a long queue of victims who have shelved business transactions due to the inability to access naira notes.
Further down the road, not far from Godfrey’s supermarket, a distraught Chinonso Madueke, who also runs a super store said his business recorded an all-time low in sales this week due to challenges associated with the current paucity of naira notes.
Not only was Madueke unable to take delivery of his supplies due to a shortage of cash, but he had also recorded many failed transactions after several customers opted for e-payments to save themselves the trouble of paying through cash.
“I have never seen this kind of a thing. Since Monday, it has been one problem or the other. It is either my POS breaks down or a particular bank’s card will begin to develop issues. UBA in particular, I have had so many failed transactions from UBA. Sometimes, for hours, UBA cards would refuse to work. I have lost so many sales because of this,” he lamented.
Chinedu Anyaene, a Bolt driver, who also shared his frustration with our correspondent, did not hold back his criticism of the government’s inability to get a grip on the fuel and naira scarcity that has crippled his business lately.
He said, “It is not easy for us. We have to deal with fuel scarcity, naira scarcity and all kinds of scarcity. Yesterday, after queuing for hours to get fuel, I carried a passenger from Ikeja to Lekki, the trip was N11,200. He said he was going to do a transfer because he didn’t have cash. You won’t believe this guy tried for more than one hour, but he couldn’t transfer the money.
“It was so messed up. Usually, transfers don’t really take time, and if it does, a customer can easily use an ATM and pay you, but he couldn’t because there was no ATM around that was dispensing cash. That was how I had to wait for him for almost two hours because of one useless policy that the government is using to frustrate Nigerians. Imagine how much I lost while queuing to buy fuel and having to wait for that guy to pay.”
CBN Governor, Godwin Emefiele and President Muhammadu Buhari with the new naira notes
Little surprise wonder that virtually all the interest group under the aegis of the organised private sector of Nigeria have voiced their discontent over the government’s handling of the redesign of new naira notes, which birthed the current naira crisis that has hit every nook and cranny of the country like ripples in a pond.
The Lagos Chamber of Commerce and Industry said that the Central Bank of Nigeria’s inability to properly plan and implement phasing out of old naira notes has caused a serious strain on many businesses.
In a statement signed by its Director-General, Chinyere Almona, the chamber noted that the naira redesign has triggered varied reactions and feedback that suggest that related issues like the phasing of old currency notes, withdrawal limit, and the scarcity of new notes may have started to impact businesses and social livelihood beyond intentions.
The statement, which was titled “LCCI statement on phasing out of old naira notes” added that while banks had endeavoured to meet the current demands of their customers through Automatic Teller Machines, and electronic transfers, the scarcity of the naira had rendered their efforts ineffective.
The statement read in part, “With the launch of the redesigned naira notes last December, expectations were high for the smooth transition to the use of the new notes for business transactions across the country.
“We regret to note that expectations have been dashed, business deals impeded, and loss of time and value experienced by many. The Central Bank needs to enlighten the public on grey areas about the scarcity of the new naira notes in addition to strengthening its policy implementation capacity. This is the minimum expectation in the face of a currency crisis in which we find ourselves.”
According to the statement, businesses have been left to suffer the consequences of the CBN currency management policy lapses.
In the same vein, recently during an interaction with journalists, the President of the Manufacturers Association of Nigeria, Otunba Francis Meshioye, equally lamented the toll the naira notes scarcity was taking on the productive sector of the economy.
Meshioye said the current scarcity of naira notes had negatively impacted business activities by disrupting the proper flow of goods.
According to him, the current naira scarcity and the challenge with e-payment platforms, have negatively affected the free flow of goods.
He said, “I want to assume that this is a very short-term problem. It is general. Even if you want to do e-banking, there are some things you cannot do at the moment. We have problems. POS is not working.
“There is no way any scarcity of something that is essential to the consumer will not affect the producer. We feel it because it hinders the proper flow of our goods to the end user. What effect is that going to have? It means we will pile stock, and when we pile stock, it means cash is trapped. We pay high-interest rates and they won’t yield good returns and investments go to where returns come regularly.”
He added, “No investor wants to play with his money. This is a very big issue in the economy now. If you put all these together, you will agree with me that we are really facing a critical time as manufacturers.”
On his part, the Director-General of the association, Olusola Obadimu, said the money-changing exercise had been largely disruptive to the economy.
According to Obadimu, the management of the currency exchange exercise could have been done in a better way, as the past few weeks had been quite traumatic for a lot of Nigerians and small businesses particularly, especially in view of the lingering fuel scarcity.
He said, “Throughout yesterday (Saturday), no single ATM that I visited (both around Ikeja in Lagos and even Abuja) had currency notes, including the airports. This is not decent enough.”
Obadimu further stated that bad government economic policies over the years had impoverished Nigerians and disabled them economically, thereby turning the masses into beggars.
He noted that the Nigerian economy remained significantly cash transactions-based as most small businesses depend almost entirely on cash.
This, he said, meant that the CBN ought to have ensured that enough notes were issued to effectively go around to adequately replace the old notes by the new deadline date of February 10.
“The CBN should not be rationing cash. In fact, it behoves the CBN to ensure that there is enough cash in circulation for people’s needs. Cash in circulation is not equal to available money and it remains, at most, just about six per cent of available money in circulation as most monies are stored up in banks and other electronic systems,” Obadimu added.
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