Cash crunch stalls transactions, fuel breaches as banks

Sopuruchi Onwuka

Glitches in the phase out of old currency notes in the Nigerian markets have led to acute cash shortages, transaction failures and worsening hunger across cities; forcing desperate customers to breach security rules as they demand access to their monies.

The situation, The Oracle Today reports, is worsened by the prevailing acute fuel shortage which has led to jumps in the prices of goods and services at a time of severe cash shortages.

At markets, shopping malls and fuel retail outlets, transactions have in the past one week run into impasse as all cash outlets including bank ATMs, POS vendors and cash-back units of megastores run dry.

The situation follows attempts by the Central Bank of Nigeria (CBN) to mop up high currency notes from circulation in a move that is widely seen as attempts to constrain criminal transactions that demand large cash hauls, including kidnap for ransom, vote buying and money laundering.

These transactions rely on large cash movements to evade tracking of beneficiaries of crime proceeds.

With the 2023 polls fast approaching amidst reports of vote buying during gubernatorial elections in some states, politicians are suspected to have piled up cash with which to influence voter decisions in the upcoming polls, prompting the moves by the CBN to accelerate e-transactions.

Besides, pervasive scourge of kidnapping in the country thrives on huge cash ransoms that are normally mopped from banks to rescue kidnap victims.

Again, sundry crime proceeds are transmitted in cash to blindside anti-corruption agencies.

Thus, the currency redesign which is coming at the end of deleterious Buhari administration is perceived, just like the prevailing fuel scarcity, as attempt by the outgoing administration of the federal government to take away the dining table after having a good meal.

And the ruling All Progressive Congress (APC) which wheeled Buhari into power on a bullion van appears to have been duped by the president. The party is accused of vote buying in recent gubernatorial elections in Southwest Nigeria. The governors of the party which visited President Buhari at the weekend have secured a promise that government might revisit implementation of the cashless policy.

The APC’s presidential candidate in the upcoming election, Bola Tinubu, declared that the cashless policy and the fuel scarcity were caused by the outgoing Buhari administration to impact his chances at the polls.

Meanwhile Presidential candidate of the opposition Peoples Democratic Party (PDP), Atiku Abubakar, has called on the government not to step back from the ongoing implementation of cashless policy.

Out in the streets, the chaos surrounding cashless policy and petrol price deregulation in the economy is pushing the people to the extreme, with parents struggling everyday to get enough cash to buy food for their children, and in most cases going home without cash to meet basic family needs.

The scramble for cash is made worse by the licensed bank and financial services agents popularly called POS operators who are accused of mopping up available cash from banks to sustain their roadside services at exorbitant rates.

A survey of most ATMs in Lagos showed that most of the POS operators come in droves, besieging the banks early in the day with innumerable ATM cards in order to beat the regulated cash withdrawal limits of N20,000 per week for each account holder. And with numerous debit cards, the street cash vendors rapidly drain bank ATMs of cash each day, leaving desperate account holders helpless at banking halls and unable to buy what they need.

Although the deadline for transaction with the old notes has been extended to February 10, most of the city residents are already without cash after they rushed to deposit their old notes ahead of the earlier deadline of January 31. Sellers also reject the old notes or charge more for old notes in consideration of the risk of being trapped in the shaky deadlines.

The situation, The Oracle Today reports, has impaired transactions and affected the fate of businesses in the country as businesses shut down, and the related frustration is forcing the people to revolt against their banks which are also accused of sharp practices in the dissemination of cash.

Videos circulate in the week showing customers breaching orderly processes at banks when they were unable to access their money in cash. A woman was recorded stripping to underwear while a  man was seen mounting and sitting on top of tellers’ counter to press home their demands.