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CBN-imposed cash crunch compounds, frustrates petrol purchases across Nigeria, hurts economy


For several weeks unendingly, scarcity of the new naira notes and or inadequate injection into circulation by Nigeria’s Central bank has continued to grind, halt and stifle the economy — the informal sector, SMEs and individuals especially the poor in their day-to-day transactions and purchases.

Even with the claims by the CBN authorities that “enough new bank notes’’ have been supplied into the banking system and the CBN/security forces-orchestrated clamp down on so-called “naira hoarders and sellers’’, it has not been able to squelch the alleged hoarding or refusal by money banks to dispense the new notes.

First, is the initial reticence of the apex bank on the amount of the currency released into circulation, how much the new naira notes was printed (locally or abroad), how much was mopped up through the old notes swap?

Kowtowing to Kaduna Gov. Nasir el-Rufai’s assertion that if about N2 trillion old notes were mopped up from circulation, then the same amount should be injected into the bankng system instead of N800 billion CBN allegedly pumped out through its vault to commercial banks’ vaults.

Outraged by protests, angish and pains of Ngerians in accessing the new currencies of N1, 000, N500 and N200 denominations, the CBN had announced a flip-flop approach to the vexed issue of scarceness of cash. It immediately pushed the panic button by directing that the new notes should be dispensed only at ATMs and PoS and later when it dawn on it that people had queued up for about 10 hours or more to access it, the apex bank back tracked and asked banks to dispense across the counters at N20,000 withdrawal limits.

In Kogi, Ondo, Osun and parts of Ogun states, ATMs were dispensing between N2, 000 and N5,000 while in Abeokuta and some parts of Lagos, they were dispensing N20,000 daily withdrawals.

The CBN, having lost the battle to squelch the fast-tracked cashless economy opposition because of its inefficiencies, has resorted to sponsoring a smear campaign against the Nigerian National Petroleum Company Ltd obstensibly to divert attention from  the economically ruinous currency crunch to current petrol high cost.

Unfortunately for the CBN, poor mobile network has stalled online cash transfer or use of PoS to purchase petrol as most filling stations now reject the cash payment platforms to take petrol and yet no cash to pay for the commodity whether at N198 (at NNPC and some filling stations) or N350 and above thereby further compounding the woes of motorists and users of petrol.

The truth is that there is no petrol scarcity unlike the acute cash scarceness being experienced at banks, PoS or ATMs. Perhaps the annual vacation of CBN Gov. Godwin Emefiele in December 2022 outside the country in the midst of the cashless policy roll-out may have dogged its scrupulous implementation as there was no systematic injection of the new notes into the system.

The much-taunted cash withdrawal limits for governments, companies and individuals have been compromised by the powers-that-be and the political class, according to el-Rufai, who claimed last week Friday that a governor apparently from the North cashed N500 million in this cash squeeze or flimflam season in violation of the directive and yet no bank MD or manager has been arrested and punished for the infraction.

The governor had recently on TVC owned by Asiwaju Bola Tinubu claimed that the currency swap was an incendiary plot to incite voters against APC candidate, Tinubu, with Aso Rock cabals as masterminds.

Till date while NNPCL is frontally addressing the petrol supply and pricing issue to enforce marketers to comply with N198 pump price, there is no pragmatic plan by the CBN to address the crisis the paucity of cash has caused.

In Agbor, Delta State, last week a man slumped and died while in the queue to collect his money from the bank; at the University of Benin, a soldier, who molested students right on their campus, was beaten black and blue at the ATM point for allegedly shunting; video of a woman who stripped to protest non-dispensing of her money and fisticuffs by some men also in the banking halls, have gone viral.

Not forgetting the Ibadan riots where protesters stormed the Governor’s office and destroyed vehicles, exploitation by PoS operators who have cashed in on the situation to charge outrageously. In Abuja, Abeokuta and Lagos, on every N4, 000 they charge N800 for new notes while for old notes of N5000, they collect N500.

Undoubtedly, the currency squeeze has done incalculable and unmitigated damage to the economy and the weal of Nigerians.

The huge threat to national security that the existing severe scarcity of the newly introduced Naira notes poses worries the Human Rights Writers Association of Nigeria (HURIWA).

The group said the manifest inefficiency and ineffectiveness of the governor of the Central Bank of Nigeria is a pointer to why Nigeria needs an independent Governor of the Central Bank and not the politically tainted and compromised head that we have now.

HURIWA’s National Coordinator, Comrade Emmanuel Onwubiko, in a statement, observed the organized chaos and rancorous situation of lack of new Naira notes and the attendant hardships experienced by millions of commoners in Aba, Abia State, Onitsha Anambra State, Lagos, Ogun, Oyo, Kano and Kaduna States among others.

“HURIWA is of the opinion that the haste with which the redesigning project of the national currency was handled by the Governor of CBN and President Muhammadu Buhari is shrouded in politically organized witch-hunt and confusion.

“How can a governor of the CBN be carrying out such a monumental financial initiative about the same time that he couldn’t move freely due to fear of arrest by the Department of State Service on allegations of suspected financing of terrorism and also the governor is facing a court case in the USA allegedly filed by his brother in law over purported failed joint business ventures?

“Then again how is it that the CBN governor is going about this exercise as if he is targeting politicians thereby making an economic policy to become politically tainted thereby exposing the otherwise national finance policy that is lofty to become polluted by political infighting even amongst the ruling All Progressives Congress under whose platform this same governor of CBN sought unsuccessfully to be made the handpicked Presidential candidate of APC?.

“Is the CBN Governor waging a political vendetta but by so doing exposing millions of Nigerian commoners to unwarranted but excruciating hardships encountered in their frantic search for the artificially scarce new Naira notes which are sold from the backdoor by CBN and money deposit banks to politicians for votes buying?”, he said.

HURIWA, therefore, called on President Muhammadu Buhari to do the needful to check the internal saboteurs within the banking system that are hijacking the new notes from CBN and selling them to politicians and rich elites.

In the same vein, the Manufacturers Association of Nigeria (MAN) has also cautioned that the lingering cash strap could result in a 25 per cent downturn in purchase of locally manufactured products.

According to MAN Director-General, Mr Segun Ajayi-Kadir in Lagos, the failure of CBN to ensure a seamless transition from old naira to new naira notes will be inimical to manufacturing.

“The current hardships being experienced in accessing money has persisted for the next three weeks, there would be a possible drop of 25 per cent in monthly sales of made-in-Nigeria goods.

“As purchases from the retail end, mostly transacted in cash, dry up, there would be a sharp drop in wholesale purchases leading to a glut of unsold inventories in factories.

“The development would also deny the government the revenue that would have accrued from consumption taxes and result in the disruption of the daily life and needs of the average Nigerian. To be clear, there is no doubt that the currency redesign is desirable; there are socioeconomic and political imperatives for the change.

“With our growth prospects heading further south, we can ill-afford a downturn in our Gross Domestic Product (GDP). The negative impact it portends for local producers, the agricultural and distributive segments of our economy is huge. It may worsen the bashing our economy has received from both external and internal shocks in recent times,” he stressed.

Also on the effects of the currency crisis on businesses in the country, especially Small and Medium Enterprises (SMEs), Mr Muda Yusuf, the chief executive officer at Centre for the Promotion of Private Enterprise (CPPE), said: “The scarcity of naira notes could put the country’s N100trillion component of its national GDP at risk.

“The crippling of business transactions at the distributive trade end amid the currency crisis would not only undermine the trade and agricultural sectors but would also have a knock-on effect on the manufacturing value chain and the services sectors.

“This is because whatever is produced has to be sold. The trading end of the chain has been greatly disrupted by these crises. The trade sector contributes about 14 percent of the country’s GDP at an estimated N35trillion while agriculture contributes 25 percent, valued at an estimated N62 trillion.’’


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