By Enyeribe Ejiogu, Bianca Iboma (Lagos), Laide Raheem (Abeokuta), Obinna Odogwu (Awka), Scholastica Onyeka (Makurdi), Sola Ojo (Kaduna), Joseph Obukata (Warri), Joe Effiong (Uyo), George Onyejiuwa (Owerri)
Mixed reactions have continued to trail the current phase of the Central Bank of Nigeria (CBN) cashless policy, first initiated by the apex bank in 2012, which brought in its wake the widespread use of Automated Teller Machines (ATM) and followed by USSD and mobile banking via phone-based apps.
The Governor of the CBN, Godwin Emefiele, on October 26, 2022, announced that new Naira notes would be introduced to replace the current N200, N500, and N1,000 notes.
He said that the circulation of the redesigned notes would take effect from December 15, 2022 while the old notes would cease to be legal tender from January 31, next year.
The CBN had maintained that these initiatives were aimed at drastically reducing cash transactions and the huge attendant cost of processing cash deposits and reprinting of the volumes of mutilated and very dirty notes.
Moreover, extremely high levels of hoarding of cash by political actors for the purpose of vote-buying and other manipulations/subversions of the electoral process with a view to rigging the elections, as well as ease of laundering ill-gotten funds, led to unsustainable volumes of the national currency to outside the control of the CBN.
To bring back sanity and enable it have firmer control on the volume of cash in circulation, the CBN announced the re-design of the N200, N500, and N1,000 notes, the three highest denomination of the nation’s currency.
The new notes went in circulation on last Thursday with the imposition of strict withdrawal limits – N20,000 and N100,000 per day for individuals and N500,000 for corporate bodies.
In the run-up to the re-designed currency notes going into circulation and commencement of the new withdrawal limits, Sunday Sun reporters went out to feel the pulse of traders and other groups who primarily do transactions in cash, to learn how they will cope with the latest phase of the CBN cashless policy as the Yuletide buying season gathers momentum.
LAGOS
A businessman, Basil Okafor, who deals in Nylon production sales said that the policy would hit businesses, especially those of them in MSMEs.
“The challenge with the banks, you can make a transfer and it would not get to the other person because an error occurred. The bank on their part would bring in its policy before you can get a reversal this will affect the business.
“If other channels are well-organized, then it is good. However, every other thing is going to affect us because, as from today December 15, 2022, most people will be skeptical about accepting old notes.
“Most people will not like to discard old naira notes with them because there is no point in taking away the one I have to the bank and find out the new naira notes are not yet available.
“How can you say I can’t access more than N100,000 in a week? What do I do with N100,000? So, it is going to have a serious effect on the local market. These people are selling on a daily basis at Mammy market, ASPAMDA, Balogun, Alaba, Okokomaiko and Iyana Oba markets, most of them do not have PoS. So, it will affect the speed of transactions and movement of goods.
“Now, it is people with cash that will be able to buy goods. Because if I say I want to transfer and no one is taking the transfer from me, they will tell you they cannot accept that mode of payment because they have no bank account.
“Let’s view menial jobs like bricklayer or people who work in farms and receive daily payment, where you have large numbers of workers who are uneducated and did not see the need to have a bank account, and they must collect their daily cash. After their hard labour for the day, you will now tell them you have reached your limit in your withdrawals. These persons eke out a living from the daily job and they must get their earnings, all of them. I would suggest a review; we cannot just create a system without solving a challenge.
“Now, CBN is talking about N100,000 a week, but how will that work when a bag of rice is close to N50,000? So, if a bag of rice is bought won’t you buy other things to eat? We should wait until the following week to buy another item.
“It is a very bad policy and will affect every small business owner because they won’t have money for transactional purposes,”Okafor pointed out.
On the impact of the new policy on individuals and the economy, Okafor said that it would be really tough as transactions in Nigeria’s economy is still cash-based.
He said: “Nigerians should brace up, as this is a challenge that the CBN has put out to Nigerians to embrace technology. However, the difficulty would be felt as we still have a lot of transactions done with cash, especially those that are below the pyramid such as the market women and men who are petty traders, because this in essence means that they have to operate online and when they don’t understand it yet they face so much trouble making business transactions and it would affect sales.”
Mrs Ikponmwosa Okodua, who deals in clothing, said that the cashless policy’s intentions were understandable, but the implications are not good at the moment.
“Personally, my plight is the timing which is not right. How many people have access to the Internet. There are basic issues to be addressed. They have to find a way to limit us from using cash.
“Agreed that the government wants to encourage electronic transactions, but there are hundreds of thousands of cases of failed transactions.
“There is hardly any week without complaints in the banking hall. You will see people shouting with regard to transfer failures. We have to tidy up the process and ensure strategic structure to fix the hitches in the banking industry. When everything is in place, then we can accept the policy. That market woman who does thrift will not accept transfer transaction. The government needs to do more public education to make the masses accept the new policy.
“If all of us, including market women and men, have to go online today, can the infrastructure carry all of us through successfully? This question should be able to deal with some of these things.
“This will stall businesses. For example, the market woman going to buy foodstuffs needs physical cash. Where will she do online banking without having knowledge on how to do it? And can N20,000 today solve that problem for one week for a family? That’s not possible, so there might be a need for a rethink unless you are targeting people in the towns.
“Even in towns, I do not see the effectiveness of this policy let alone in the rural environs. It is a good policy, but we should streamline it to suit the kind of economy we operate, especially with inflation at double-digit. The practical situation on ground does not support this policy,” she said.
Mama Chisom said that the CBN in limiting withdrawals, and they are trying to reduce cash in circulation and drive financial inclusion, which is good, “but na poor person he go affect.”
Also, Nigerians do not trust their systems enough to keep their money there. The issue of people losing money in their bank accounts to cyber-theft could discourage them from keeping money in banks, she argued.
She, however, urged the banks to ensure that they address the issue of cyber theft, to make Nigerians have trust in the system. Once there is cyber-security the people would accept the CBN initiative.
OGUN
A wholesale dealer in FMCG (fast moving consumer goods) at the Kuto Market, Abeokuta, Mrs Ilori Adeola, lamented that the cash limit would greatly affect her sales, noting that the majority of retailers who patronize her pay for goods in cash.
She expressed worry over the inconvenience and confusion the new cashless policy would bring on business enterprises like hers.
Mrs Adeola, however, told Sunday Sun, that she had applied for additional PoS machines from her bank to cope with the new directive.
She also said that she had since informed and prepared her customers ahead of the deadline on the new monetary policy, as payment could either be made via a PoS terminal or mobile transfer.
For Adigun Ibrahim, a butcher at the Omida Market, Abeokuta, the CBN directive may pose serious issues as many people are used to paying in cash, especially people in the informal sector of the economy.
“This new cashless policy of the CBN will have a serious toll on my own line of business. I mean, most of my customers pay for meat in cash, even as high as N50,000. Look at me, I don’t even have a PoS machine, so, what do I do in case I engage in transactions involving a huge amount of money”? Adigun queried.
But for Monday Chiaka, a dealer in second hand electronics, the new CBN cashless policy is a welcome development, which he said should be embraced by the people.
According to him, the situation whereby some Nigerians stack raw cash away from the circulation would be eradicated, while it would also reduce holding of excess cash.
Chiaka, however, called on the telecommunication network operators to raise their game and deploy more switching capacity that would improve interbank transactions, and thereby reduce transaction hiccups.
ANAMBRA
In Anambra State, people don’t seem to be worried about the new policy of the CBN. This is because many of them are already used to the new mode of payments done electronically.
In various markets, shops and some other business places in the state, many traders and operators of filling stations make use of the PoS machines for payment transactions.
At the popular Eke Awka Market, some traders there said that they had already gone digital, making use of the PoS machines and accepting electronic money transfers from their customers.
One of the traders, Chinedu, who gave only his first name, said that he had been receiving payments through bank transfers and as such does not have issues embracing the new policy of the CBN.
“There is nothing wrong with the new policy. My only concern is that those who prefer to make cash payment may find it a little challenging. But for me, I don’t have a problem with that,” Chinedu said.
For intercity transporters, especially those who charge above N1,000, they don’t have issues with the new policy also.
One of the drivers, Francis Nweke, said that he would not be expecting any passenger not to have his cash while boarding his vehicle.
“But if they don’t have cash, they can make transfer. But you know we are used to touching cash every time. You have to buy fuel, once in a while you buy oil, settle revenue agents and all that. You require cash to do that. However, I can accept transfer from my passengers,” he said.
BENUE
In Benue State, there are mixed feelings over the policy. While many lamented that their businesses would face challenges, others say they have no issues with it.
A trader, Mr Emmanuel Ugwuoke, lamented that the policy will have adverse effects on their businesses.
“I purchase goods worth N500,000. How will I cope with a withdrawal limit of N100,000. It means I will wait for five days to get the amount. It will be difficult. This will affect businesses and I’m sure people will protest.
“Business is about money, and cash at hand. Sometimes your suppliers prefer you give them cash, but with this policy, it will no longer be easy,” he said.
He further lamented that telecommunication network issues associated with the PoS machines would also hamper smooth operation of the cashless policy.
Mrs Olutade Olutoyin, who deals in Coca Cola products told Sunday Sun that CBN policy would not affect her, given that she doesn’t make withdrawals across the counter.
She said: “All my transactions are online. To Coca Cola, I put in cheque. I only deposit money and for my personal transactions, I have a bank app which I use to transfer money; be it to my children or anyone at all. I can’t even remember the last time I withdrew money. So, as they are saying it, it doesn’t didn’t mean anything to me.”
Another trader, Chidi, who sells children’s shoes in Modern market similarly said he has no issues with the policy because over the years, he has been making deposits as he sells and transfer money to his suppliers in Lagos and Onitsha who in turn send him goods by waybill method.
But Mr Aondongu Saaku, a rice and yam farmer, said the policy will give him and other people in his category a headache.
“The shortage of money for us to pay for inputs will be our headache. Some people don’t accept bank transactions, some don’t have bank accounts, they just want cash and if you are at the market that you don’t have a network and can’t transfer, it will affect production especially those who go to transact in the rural areas.
“A yam dealer cannot tell the villagers about bank transfer. You have to give them cash or they won’t sell. Imagine that you have to buy a trailer load of yam.
“So the policy is not good for our business. The N100,000 limit is too small for our business. The government should review it upward because if you want to buy input, fertilizer and other things that will cost up to N300,000 and you are allowed only to withdraw N100,000, if the person is not patient enough to wait for you until the next day, you will lose,” Saaku said.
Meanwhile most of the transporters noted that the policy would not have any adverse effect on their business. A driver who plies Makurdi-Abuja route said they do not charge so much and as such passengers are able to pay for their transportation.
KADUNA
For some in Kaduna, such as the Station Manager, Kaduna Line Bus Terminal, Kaduna State Transport Authority (KSTA), Mustapha Ibrahim Babayaro, there is no cause for alarm over the CBN cashless policy.
According to him, before the coming of the policy, KSTA had already gone digital as it adopted the online booking application for travellers, especially those going to Daura in Katsina State and Yola in Adamawa.
“As far as we are concerned, we don’t have any problem with cashless transactions. In fact, those who want to travel with us can now book online and come to the park to proceed on their journey.
“It may interest you to know that we are encouraging our drivers, especially those that don’t have a bank account to go and open one because all their allowances and money for fuel will now be sent to them through bank transfer.
“We cannot be left behind in this digital world simply because we are a transport company. No. We will continue to research to make everything we do here seamless because technology now drives the world economy and the Kaduna State government has keyed into technology-driven processes to facilitate operations,” he said.
A loader in one of the parks at Angwan Sarki, Kaduna, Abubakar Sani, described the withdrawal limit as “unfortunate” for people like him who earn their living based on goodwill from passengers.
“The withdrawal limit will affect my earnings. This is because when people come here to board, I do help them carry their load and load it in the vehicle. At the end of everything, they will give money.
“My fear now is that many of them will book online and may not have the cash to give me. You will agree with me that many people will not want to transfer small amounts like N200 or N300 and even if they want to, I don’t have any bank account,” he said.
Expressing her views on the CBN policy, a trader, Hajiya Fatima, said: “With the issue of the network, it will be difficult for people like us. Imagine if you are to buy something of N200, how much will your bank charge for the transfer? For now, I don’t think it should be made compulsory for all. It should be about choice until things improve.”
As far as Hamisu Ali was concerned, the issue of a cashless economy was dicey due to the lack of cyber-security in online transactions.
“Some people are criminals. They will buy something and tell you they are transferring the money, which you will never see even when you receive an alert. The fake alert is my fear.
“So, I’ve made up my mind not to receive payment through transfer except with the people that I know very well. Again, I’m not comfortable with the limited withdrawal per week. Some of us transact huge amounts and they do that with cash, especially at the grassroots.
“However, if it will help our economy, we will make the sacrifice and bear it pending the time it will be part of us. I will support it even though we are in bad condition in the country at the moment,” he said.
Chairman, Kaduna Social Protection Accountability Coalition (KADSPAC), Ms. Jessica Bartholomew, said that going cashless would increase the chances of poor and vulnerable Nigerians being included in financial planning.
DELTA
Some motorists and traders in Warri, Effurun and its environs in Delta State, have decried the CBN cashless policy, which put restrictions on availability of cash across the counter or through ATMS, saying that the policy would kill the hustle and bustle in the oil city.
At the popular Enerhen junction and Jugbale market, city residents lamented that new policy may further worsen the low night life in the twin cities as people would not have cash to spend as a result of the limit placed on withdrawal via ATM and POS.
Ngozi, who has a shop at Enerhen junction, said that this year’s Christmas celebration would be boring as many people would not have cash to spend.
He said that barely 10 days to Christmas no bank in the city has loaded the new notes into the ATM machines.
Speaking on the development, Chairman, Board of Trustees, Centre for Human Rights and Anti-Corruption Crusade (CHURAC), Alawei, Cleric Ebikonbowei, thrashed the CBN cash withdrawal limit as retrogressive and anti-people, saying that people who run small businesses and rural dwellers were not taken into consideration while formulating the policy.
According to him, the CBN’s cash withdrawal limit is dangerous to the economy, especially the operators in Micro, Small and Medium Scale Enterprises (MSME) category of businesses, adding that the policy will cause more job losses, thereby worsening the unemployment situation.
Ebikonbowei argued that the policy may trigger humanitarian crisis in some Riverine communities of Delta State.
“Did the CBN ever think of the rural communities before initiating such policy? How can the rural communities survive in such cashless policy when many rural dwellers have no bank accounts? Even if some have, is there telecommunication network for online transactions?
An Udu-based dry cleaner, Alex Anighoro, said that the currency redesign and withdrawal limit would have gross negative effect on businesses like his, run mainly on cash and carry basis and not electronic transfer.
“It won’t be that easy for now because most of the transactions we make as businessmen, we have to do strictly with cash,” he said.
Sunday Sun found that 48 hours after the redesigned notes were officially released into circulation, most commercial banks in Warri and its environs were yet to get the new currency notes.
As at Friday, most commercial banks in Warri metropolis were still paying customers with the old naira notes just as the ATMs were dispensing old N500 and N1,000 notes.
Reacting to the non-availability of the new redesigned naira notes some business owners said the introduction of the new currency notes would not bring anything new since the currency is the same value with the old ones, which would soon go out of circulation.
In separate interviews Mr Afor Bright, Mr David Ibrahim and Nze Francis Onuora disclosed that they were yet to have a feel of the new notes, stressing that the government policy would no doubt check fraudulent activities like counterfeiting in the interim.
They, however, stated that physical cash would begin to be scarce, noting that people at the grassroots would feel the effect more.
IMO
In Imo State, Sunday Sun investigation revealed that the majority of petty traders do not really understand the cashless policy of the CBN, and they planned to warehouse their sales proceeds at home as they essentially engage in ‘cash and carry’ transactions.
Mr Chijioke Amadi, an intercity transporter who plies the Owerri-Onitsha route, condemned the CBN policy, saying that the withdrawal limit would force people to keep their money at home.
“I handle a lot of cash because of the business I am into which is transportation. Now that we are in the end-of-year season, we can’t accept payment through PoS because travellers will have to pay in cash. The policy is good, but you have to understand that Nigerians have not matured for cashless system. It is even going to affect market women more.”
Mrs Njideka Ohaeri who sells foodstuff at the Owerri Relief Market said that people like her who go into the “bush” market to buy garri have to pay in cash because the women in those areas do not have bank accounts and they want their money in cash.
“Last week I went to Ekeeta Igbodo in Rivers State to buy garri and I had N70,000 cash with me because you have to pay in cash before the women will sell to you. You see most of the women in this market sell in cash after the close of the day, they take their money home. This is because very early in the morning they will still have to go to either Ohaji to buy what they would sell, especially for those who sell vegetables. I also hear that you cannot withdraw more than N20,000 a day from the bank. This means that most petty traders like me will just put ours in the house,” she said.
Similarly, Chris Nkwoamadi, a dealer in poultry at the Relief Market too, said that he is yet to understand the CBN policy. When the reporter explained the policy to him, the bemused livestock dealer said it would not be possible to adjust as poultry sales to individuals is done in cash, stressing that even their suppliers prefer cash payments.
Speaking in the same vein, Chika Anayo, a trader at Douglas Road, Owerri, noted that what the government should be concerned about is how to fix the economy and not putting a limit on how much the people can take from the bank or from the ATM and PoS.
“What the government should be talking about is how to fix this bad economy and not about how much people who are doing business can withdraw from the bank or that business should be done cashless. If they said that people should pay through PoS when they buy goods. But the question is how many small traders in this state have account numbers? So, traders prefer to have their money paid in cash and not transferred because most times people will send you a fake alert. I have been a victim,” he claimed.
While endorsing the new policy in principle, another trader, Mr Ibe Akano, expressed worry over the amount that can be withdrawn through the ATM daily.
Akano, who is a major dealer in baking items said: “The new CBN policy is a good one, but the major problem is the amount that is allowed to be paid over the counter at the bank. In my own case some times I may need to withdraw over N200,000 in cash to pay for goods. But since we are not a big company I may be able to do that. That is my problem. And, the CBN can do well to give more consideration to those of us who are not corporate companies.”
AKWA IBOM
Traders and major transport companies in Akwa Ibom State have mixed feeling about the cashless policy on account of the poor network communications in parts of the state.
The Manager of Transit Favour Transport Company, Uyo, Mr Imo Sylvester Etok, told our correspondent that so far, the effect of the policy had not yet been felt in the company as some passengers still pay cash for their fares even though the company provides PoS machines as an alternative payment means.
“For now we do not have any route that costs up to N20,000. Lagos and Abuja routes are N17,500 in Sienna and N14,500 in a normal bus. Calabar and Port Harcourt are N3,000 each. But even if the fare rises to N20,000, we believe, it would pose no problem to commuters in the mode of payment.”
Transport Control Officer at the Akwa Ibom Transport Company Ltd, Mr George Ibembem, spoke in the same vein.
He said the company had started the implementation of the no cash policy through the use of PoS and interbank money transfer.
There were, however, some discordant tunes among some traders and their customers at Itam main market and Akpanandem market, Uyo, where some said the new policy should be encouraged because it would end fraudulent activities by 419 fraudsters who aim to dupe business owners across the state.
A goat meat seller, Mfon Ubom, expressed the same sentiment: “I’m educated, and I understand that if we don’t agree with them they won’t change the policy, so when you come to buy without cash I refer you to PoS, with that I can sell for you, because even alert can be fake. But I still accept genuine transfer.”
While some are trying to adapt to the new policy, others have maintained their “No cash, no sale” policy, saying it is due to the kind of goods they deal in. Idara Ukim, a groundnut seller said: “The deadline for the new policy is January 31, 2023. I will not accept transfer till that time. If you want, come with money and buy. I don’t accept transfer and I don’t sell without cash payment, my groundnut is from N50 and it’s too small for transfer. So just pay cash.”
At Itam market, buyers, like Uyai Emmanuel, are also troubled by the CBN policy. She said: “If I’m going to the market on Wednesday, I’ll start withdrawing from Monday till the money is enough to purchase the goods I need. Or if the trader accepts transfer I will transfer but I’m sure that I’ll withdraw ahead and keep to avoid stories of network and other issues.”