The Central Bank of Nigeria’s (CBN) suspension of the use of the old N1,000, N500 and N200 notes is having telling effects on the economies of the two major markets in the South-East of Nigeria. Traders in Ariara Market, in Abia State, regarded as West Africa’s largest market, and the Onitsha Main Market in Anambra State, say the scarcity of the redesigned currency is choking and has brought commerce in the two commercial cities to its knees. In this piece, NNANNA NWOGU and MICHAEL OVAT look at the tales of woe from the traders in this region.
It is a well-known fact that in contemporary Nigeria the economic main stay of an average Nigerian from the South-East is trading. In the various markets all over the entire geo-political zone, billions of naira are generated daily as people exchange goods for money. The buying and selling activities in the zone run into trillions of naira on a yearly basis. Traders from across the country, daily throng the two major markets, Ariara, in Abia State and the Onitsha Main Market in Anambra State. The majority of these traders go to these two markets with cash, while a sizeable number of them also trade using electronic means of payment.
Until the introduction of the redesigned naira notes in the denominations of N1,000, N500 and N200 late December 2022, trading continued smoothly in the markets. By the time the policy was given life, the attendant scarcity of the new notes took its toll on the traders in the markets, as in other segments of the nation’s economy. What seemed to be a beneficial economic policy, the naira re-designation, has turned out to be a policy that has been choking the economy as well as the citizens. Though the intention of the apex banker, the Central Bank of Nigeria (CBN), may be good, the timing of the policy and its implementation has imposed extreme hardship on the citizenry.
First, it came at critical time when the country was set for its general elections in February and March 2023. The CBN, while arguing the desirability of the policy, said that it was intended to mop up excess money outside the banks and enthrone cashless transactions on the citizens, among others. The swift and almost sudden implementation of the policy instantly imposed untold hardship on the citizenry, as the non-availability of the new notes after the deadline strangled many businesses and families.
As a result, people resorted to buying and selling the naira notes, particularly the N500 and N1000 notes. President Muhammadu Buhari had announced the suspension of the withdrawal of old N200 notes. And, just last week, a judgement by the Supreme Court extended the deadline for the old notes to December 31, 2023. But in spite of the Supreme Court judgement that ordered that the old 500 and 1000 naira notes be returned into circulation, banks in Abia State are yet to heed the order, even as the new notes are also difficult to get. While this scenario persists, the Abia State Governor, Okezie Ikpeazu, moved in to reassure Abians on the need to survive the adverse naira non-availability condition.
According to the Abia State Commissioner for Trade and Investment, John Okiyi Kalu, Governor Ikpeazu was deeply worried about the effects of the new cashless policy of the CBN and redesigning of Naira notes on traders in the state. Speaking to newsmen in his office in Umuahia, Okiyi said that the state government was looking at multiple ways to ease the negative effect of the policies on the traders, hence the announcement by the Governor that Abia State Board of Internal Revenue Service should immediately suspend collection of 2023 revenue from all markets in the state till June 2023.
He said: “The governor has visited many markets in the state since the cashless policy came into effect along with the scarcity of new currency notes as a result of the naira redesign and observed that traders in the state are possibly the worst hit. Many of our traders are unable to transact with buyers as the policy implementers failed to capture their peculiar needs while rolling out the new policies. The traders are really bearing the brunt, and as a responsible government, we are looking at various options to support them. One of those options is what the governor announced during his visit to Good Morning market, Aba, that, henceforth, state and LGA revenue collections in the markets will be suspended for at least six months starting from January 2023.”
The commissioner called on banks in the state to immediately deploy enough point-of-sale (POS) machines to all markets, superstores, and other trading centres in the state to enable buyers to utilize their automated teller machine (ATM) cards for transactions. He also called on the CBN to ensure that the new notes are made available to traders and citizens of the state in sufficient volume to avoid a breach of peace and security that might result from the massive suffering occasioned by the new transaction regimes.
“We are not against the new cashless regime and redesigning of the naira notes by the Federal Government but the governor is deeply worried about the effects on our hardworking traders as a result of the poor implementation strategy, which failed to take into cognisance the peculiar needs of rural and urban traders. Many rural traders are unbanked, and even if they wish to join the banking system, the branches are not even there, hence, they might have to travel several kilometres to neighbouring communities before they can carry out their transactions.
“Quite a number of them may also not have enough formal education to help them operate the POS machines. So, the policymakers should have made provisions for their needs before rolling out. The immediate solution is to inject enough new naira notes into our rural economy through special intervention by the CBN to avert the looming socio-economic dislocation that might lead to anarchy”, Okiyi canvassed.
In spite of the above, investigations revealed that in banks in Aba and Umuahia, old notes have yet to find their way into the ATMs.
According to a bank manager in Aba, who pleaded anonymity, “we are waiting for a presidential confirmation before we can rely on that to see start issuing out the old notes”.
A bank staff in Umuahia, who also spoke on condition of anonymity, said, “Customers in Umuahia will not accept the old notes despite the Supreme Court pronouncement. Public confidence in the old notes has to be restored first, otherwise, the Umuahia public will not accept them.”
A further check on POS operators in Abia showed that they do not accept the old notes and some who have them, said customers don’t accept them.
According to an Aba resident and president-general, Coalition of South-East Youths Leaders (COSEYL), Goodluck Ibem in Aba, it is the same scenario as in Umuahia and other parts of the state. He disclosed that in Aba, cash —both old and new—was scarce. He added that the new naira notes were not available and the old notes were not accepted by people. “So, no one is collecting them in Aba for now.”
He disclosed that the new naira notes were being “sold” at N300 for 1000, adding that “those selling it also buy it. Some buy at the rate of N200 for N1000 and sell at N300 for N1000, while only a few who bought at N100 for N1000, sell at N200 for N1000.
“Business has not been moving in Aba and many are now living from hand to mouth. It is difficult to eat twice a day for most families, you see, and many entrepreneurs are going to bed hungry because of their inability to make sales as a result of the biting economic hardship. This thing is a big problem to so many families. It is not easy.”
An Ariaria dress merchant, Ndukwo Kalu said the condition of traders at Ariaria “is now critical” as many businesses are suffering the naira re-designation and cashless policy.
“As a person, I love the policy, but the timing and the method of withdrawal of the old notes is something else. It came at short notice when all were not prepared. The CBN and the Federal Government should review the deadline and make sure that the new notes are in circulation. They should also make sure there is a gradual withdrawal of the old notes so that it will not impose hardship on the people.
“Here in Aba, traders have resorted to sleeping during business hours, and even when customers come, they will offer bank transfers, which are most of the time inhibited by the bad network as you will not see your alert to be sure the transfer is successful,” Kalu bemoaned.
Madam Uzoma Nkasiobi, a food vendor, said she never had an ATM card, adding that she has lost many of her customers due to their inability to pay with cash.
“If they pay me with a bank transfer, how am I going to pay for the salt, pepper, and onions I am going to cook with? This is a bad trend for me and many out there,” she lamented.
Uche Ufomadu, a teenager selling electric materials at Ariaria A-Line, said, though he had more money in the bank, “only the living can operate a bank account” and called on the Federal Government to make the new notes available or be specific on the status of old notes.
In the Umuahia area, Chinedum Obasi, who sells motor parts, was of the opinion that the policy should be reviewed, while Chukwudi Ajuzie, a barbershop operator, was of the opinion that the CBN “has a hidden agenda over the exercise,” observing that old N100 naira notes still circulate alongside the new ones after many years.
Most respondents want the Federal Government and the CBN to act in order to reduce the suffering of most people who now have resorted to trekking long distances as they lack the physical cash to pay for transportation or to treat themselves when sick.
Traders in Onitsha lament low patronage
Traders and buyers in Onitsha, the commercial city of Anambra State, have continued to decry their daily ugly experiences in markets as the negative effects of the recent naira swap and cashless policy bite harder on Nigerians. This was observed when the Nigerian Tribune visited Ochanja, Okpoko, Relief, Upper-Iweka, and Head-bridge markets, all in Onitsha, on a monitoring exercise to ascertain how traders and their customers fare under the present situation.
During the monitoring exercise, it was noticed that traders recorded little or no sales, as many of them were spotted sitting idle with no customers to patronise them. Others were seen struggling with either POS machines or smartphones in a bid to transact business with their customers through electronic money transfers. Customers, on the other hand, found it difficult to make payments for goods they intended to purchase due to network issues.
Some buyers, including a civil servant, Mr Ifeanyi Ezeugwu and one Miss Chinelo Osakwe spoke to the Nigerian Tribune. They claimed to have been in the market for over two hours, trying to buy foodstuffs and other necessities without success, as the poor network did not allow their transactions to go through. They called on the CBN and the Federal Government to assuage the unnecessary sufferings of Nigerians in the country by ensuring that either the new naira notes or the old N200 notes are in circulation.
They lamented that many people could no longer feed themselves or solve financial problems despite having money in the banks. The aged and those with little or no technological knowledge were worse off, they noted.
On their part, traders including Mr Emeka Ezechi and Mr Emmanuel Iloanya, explained that their daily sales had drastically declined due to low patronage, even though they had purchased POS machines to make things easier, but were still faced with network challenges.
At the popular Upper Iweka, a POS operator, Miss Angela Ogokwe, said despite the poor patronage, she was currently experiencing as a result of the naira scarcity, she would not collect old naira notes until the Federal Government and the CBN officially okayed them.
“I will not collect the old note. I know that there are poor sales not only in Onitsha but throughout Nigeria. I will start collecting the money only if the Federal Government and the CBN officially announce it. I don’t trust the Supreme Court judgement,” she lamented.
At the Ochanja and Hausa markets, where Bureau de Change operators trade, some people were seen trying to exchange various naira denominations in both old and new notes. But our correspondent observed that the Bureau de Change operators were still rejecting the old naira note despite the Supreme Court directive. They insisted that they would start collecting the old notes only if the CBN and the Federal Government issued a statement to that effect.
Nigerian Tribune also visited some commercial banks in Onitsha to know whether the banks had commenced collection of the old notes. It was gathered that the banks were not collecting the old note from their customers, leading to the latter’s frustration.
Also affected is the transportation sector. Monitoring the situation in various motor parks in Awka, Onitsha and Nnewi, Nigerian Tribune spoke with some people who lamented the situation.
Mr Ugochukwu Onuoha and Mr Emmanuel Chidozie, in separate interviews, said the policy had resulted in the low influx of passengers. They said that passengers find it difficult to pay for their trips and therefore resort to paying through transfers, which are most times hindered by poor network service, causing delays and losses on their part.
According to Mr Etuodichukwu Ezejimore and Mr Emmanuel Agala, managers of various parks, the number of trips their parks cover per day has been greatly reduced because passengers do not have physical cash to travel. They noted that some of their drivers are not technologically savvy, making it difficult for them to make the necessary transactions for trips. They also stated that the policy was not a bad one, but implementation was the major challenge.
Miss Mmesoma Obi along with other passengers that Nigerian Tribune spoke with expressed dissatisfaction with how the policy is being implemented. They noted that they were forced to spend more money to transport themselves as a result of additional POS charges.
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