CBN ‘Releases’ Mopped Up Old Notes To Banks Today
The Central Bank of Nigeria (CBN) has instructed commercial banks to immediately collect the old naira notes they deposited in its branches to ease the cash crunch across the country.
Recall that the apex bank had mopped up the old N1, 000, N500 and N200 notes in response to the introduction of new ones as part of the cashless policy of the federal government.
At the height of pressure from various stakeholders for the CBN to relax its stance on the cashless policy to ease the pains Nigerians are going through, CBN governor Godwin Emefiele had claimed that all the old notes withdrawn from circulation had been destroyed.
And despite the Supreme Court judgement that directed the old and new notes be used together up till December 31, the money in circulation remained scanty as Nigerians struggled to live a normal life.
Kwararafareporters had reportedted that despite the announcement by the CBN to banks to issue and collect the old banknotes in response to the Supreme Court judgement and a statement from the presidency, credible sources said the financial institutions soon ran out of cash after they issued what remained in their vaults as there was no new flow from the apex bank.
Banks to get supply from today
But credible sources at the CBN told one of our correspondents last night that starting today, the commercial banks were free to withdraw the old notes they kept at the apex bank.
“The CBN said banks have been instructed to collect the old naira notes they deposited and that before the end of the week, the country would be awash with naira notes,” he said.
This latest move and instruction from the apex bank came hours after the Nigeria Labour Congress (NLC) directed all workers to picket all branch offices of the CBN nationwide starting next week over the current naira scarcity in the country.
Old, new notes remain elusive
Kwararafareporters reports that despite the claim by CBN that cash in circulation was up to N1 trillion, investigation revealed that the scarcity of cash has continued to bite the citizenry amidst last-minute preparations for this year’s Ramadan season.
Checks at Zenith, FCMB and Jaiz Bank branches in Abuja showed that they were out of cash in the banking hall and at their respective ATMs.
In Lagos, while most of the banks were still not dispensing, those that dispensed only paid a maximum of N5,000 to customers, which is barely enough to carry out any transaction.
In addition, many small business owners in major cities are also not collecting transfers insisting on cash payment.
Our correspondents report that the situation is worse in villages where most people are unbanked, and alternative sources of payment are not available.
“I was to buy bread and other food items from a shop yesterday but the person told me frankly that she was not collecting transfers. The excuse she gave was that her boss who was to confirm the payment was not around,” a Lagos resident said.
Investigation by Daily Trust showed that many small businesses have continued to groan over declining sales due to cash scarcity.
Checks at some markets in Lagos indicated that the cash crunch is affecting shopping in preparation for the Ramadan and other daily shopping routines nationwide.
Same in Kano, Jos
Residents of Kano City and environs have been trooping to the major markets selling food commodities, juice, and other valuables needed in the month of Ramadan amidst scarcity of cash, which hit the state owing to the new naira redesign policy.
Kwararafareporters also gathered that both retailers selling goods in supermarkets and shopping malls, and traders in metropolitan areas have been patronising the major markets, thereby causing traffic and congestion within the markets and their surroundings.
The markets that witnessed this boom are the Singer commodity market, Sabongari market, Dawanau grains market and vegetables and spices markets in the state metropolis. While some pay their purchases with cash, the majority are paying via POS or transfer, which adds to the difficulties of the process.
Our reporter gathered from some of the markets that some commodities are sold at different prices, depending on the mode of payment.
For people with cash, they got cheaper prices while those that will pay via bank or transfer paid slightly higher prices and they stayed longer in the market because of the procedure and network availability.
Speaking to Kwararafareporters, Nuhu Danliti, one of the dealers in Singer Market said: “Unlike last year’s Ramadan, this one has come with new challenges, top of which is the cash crunch.
“People don’t have cash and the difficulties have almost multiplied now. Although there is not much hike, prices of some commodities that are badly needed in this period have gone high. Like sugar, yesterday, we didn’t even have it in the market. But today it is sold at N34,000 unlike last week when it was sold for N31,000,” he said.
Hassan Malam, a trader in Jos said buying and selling of goods have slowed down due to cash crunch.
“There are traders who are willing to collect transfers but the infrastructure is very slow.
“Some traders have recorded losses because of poor internet connectivity. You give your goods to someone and after seeing that they transferred the money to you; but you wait for hours and in some cases, days without getting the alert.”
Hannatu John, a trader at Gada Biu also in Jos called on the CBN to make small denominations available to facilitate easy transactions.
“It is evident that the so-called one trillion naira they released is not enough because people are still feeling the heat.
“And it appears that the CBN is not ready to bring back the old naira notes…This is despite the verdict of the Supreme Court.
“My advice is that they should fear God and do the right thing. The businesses of millions of petty traders have collapsed,” she said.
Small businesses suffering over cash scarcity- Expert
Speaking with our correspondent yesterday, the Lagos State Chairman of the Nigerian Association of Small and Medium Enterprises (NASME), Dr. Adebayo Adams lamented that many small businesses are suffering from the cash scarcity.
According to him, many banks are still not paying either the old or new notes.
He said, “The currencies have not been circulating. The CBN has not been fair to the masses by not giving them money. Thank God people have started collecting old notes but the funds are still not available.
“The issue is that the money is not circulating. You can’t have cash like before when you could have like N100, 000 in your pocket…
“This is making the prices of goods go up. Because there is no cash, people have increased several things. Pure water now has been increased to N50.”
The President, National Association of Nigerian traders, Barrister Ken Ukaoha said: “The cash crisis has persisted because the CBN had only partially complied with the Supreme Court judgment.
“Yes, the legal tender status of the old currency notes has been grudgingly extended to December this year by the CBN. But the CBN has deliberately cut down the currency in circulation by about 70%. That is the crux of the matter. “
Supply in limited quantity- Commercial banks
A number of commercial bank officials who spoke to Daily Trust on the grounds of anonymity said the situation became worse after they exhausted their stock of old N500 and N1000 notes.
A manager with one of the new generation banks said: “Since we exhausted what we have, we now rely on the limited supply of new notes from the CBN.
“The major problem we have is that people are not making deposits back at the branches and we cannot sustain operations with just what we get from the CBN.”
Another top bank official who does not want to be named noted that commercial banks are trying their best to ration the available cash among their customers.
“We can only work with the available cash. However, CBN has assured of more cash before the end of the week. The scarcity should be over soon,” the source noted.
NLC to shut CBN offices nationwide
The leadership of the NLC has directed all workers across the country to picket all CBN branches nationwide starting from next Wednesday over the current cash crunch in the country. But it is not yet clear whether the congress will shelve the idea following the recent development.
It specifically directed all its affiliate unions and the state councils to begin mobilisation on Friday for the nationwide mass action, saying the federal government and the CBN have not shown any commitment to address the situation.
NLC President, Joe Ajaero, who gave the directive on Wednesday at a press briefing in Abuja, said the decision became imperative following the apex bank’s failure to comply with the one week ultimatum given to it to make cash available for Nigerians.
CBN urge more reliance on alternative payment platforms
Another source at CBN said they would continue discharging their duty of regulating the money supply in the economy.
“As the governor disclosed during the monetary policy briefing, currency in circulation has touched N1 trillion.
“We are also monitoring banks on a daily basis to ensure the efficiency of our alternative payment platforms and you will notice that the incidences of failed transactions have improved considerably.
“So, we encourage Nigerians to adopt alternative payment platforms which is one of the goals of this policy,” he said.