Calabar Residents Express Worry Over Cash Scarcity  

FOLLOWING the directive issued by the Central Bank of Nigeria (CBN) to Deposit Money Banks (DMBs), a few days ago, to ensure that Nigerians have unfettered access to cash through Automated Teller Machines (ATMs) or Over-The-Counter withdrawals. In this special report, our Executive Editor, Anthony Ekpo Bassey, went around Calabar metropolis, to ascertain the situation on ground and obtained opinions of residents in their efforts to access cash for their respective pursuits.

Respondents react

Residents of Calabar Metropolis have expressed worry over the prevailing cash scarcity ahead of the festive season and are beckoning on both the Federal and the State Governments to intervene in this financial quagmire because of its adverse effects on the socio-economic lives of the people.

Speaking to our Correspondent in Calabar, a Gas merchant, Mr. Paul Oliver, lamented that the current cash scarcity has really affected his business negatively. "This has really affected my business in particular in the sense that I do not have enough customers coming my way due to the fact that the customers have limited cash and some of them have no access to enough funds to paddle their day-to-day activities.  Besides, the gas plant in which I always purchase my product most times, on credit cannot afford to sustain that privilege because they are also in need of quick money because cash is now scarce and really hard to get. So, you see my business as a whole is not moving that fast because this cash scarcity has a huge negative impact on my business." Oliver said.

The Gas vendor further lamented that: "Lately I have been cheating myself because when customers comes to patronise me, and probably demand for change, I will definitely find it difficult to provide change for that person because I do not have cash at hand and I end up giving him/her my product to cover that change which leaves me shorting my product. That amounts to a huge loss. I appeal to the governments at both the Federal and the State levels, to look quickly into this matter as it is bringing our economy to a poor state."

Also speaking, a leading promoter of Plantain Flour, Mr Offiong Bassey, regretted that the government is yet to take pragmatic action in order to end the prolonged cash scarcity. "Well, I am yet to really hear any reasonable justification for the current scarcity of cash in town at the moment. So for now, my overall impression about the issue is the usual Nigeria scenario where the average individual is conditioned by the powers that be to go through unnecessary peril. Let's say it a sabotage somewhere, shouldn't a responsible government act swiftly to ameliorate the sufferings of the people? As I have always maintained, being a Nigerian comes with its own impediment!"

Meanwhile, some concerned citizens have pointed accusing fingers to bankers and POS agents as the major creators of the artificial cash scarcity. According to Mr. Godwin Acha, "It is self-inflicted-pain from our bankers just to make more money for themselves this December period." Corroborating this claim, Mr. Kenneth Ikpeme said:  "The prevailing cash scarcity is man-made. I have said time after time, that bankers' involvement in the business of Point of Sales (POS) will continue to be a constraint to Nigerians and their businesses. I have closely observed that the current artificial cash scarcity does not exactly affect POS operators since they constantly have cash in their possession, but they are taking double charges, saying that there is scarcity. Yes, there is a high demand for cash given the time of the year (yuletide), but that only means that cash should change hands faster than usual. POS operators are charging N200 for N5, 000 withdrawals, one of them at Mobil took a fee of N300 off me for a N5, 000 withdrawal with the excuse that he bought the money for a fee above the usual."

Also, supporting this argument, an ICT Guru, Mr. James Offiong, regretted that the artificially induced cash scarcity, seems to have a place in our polity. "Well, my personal opinion is that artificially induced cash scarcity appears to have become a thing that has come to stay. With the advent of cash scarcity during the last cashless policy period, operators in the sector saw an opportunity, cash in on it, made lots of money and probably decided that it can be activated from time to time. Unfortunately, the Central Bank of Nigeria (CBN), which is supposed to act like a watch dog in favour of the masses appears to be a toothless Bulldog. I saw a publication it made to Deposit Money Banks, directing them to make cash available especially during this period, but somehow, I want to think that after that publication, they choose to look the other way while the Deposit Money Banks (DMBs), continue with their sharp practices.  A lot of the POS you see around town are owned by some bankers who easily have access to cash. They give out different amounts to POS operators for a fee. (POS machines that are not theirs). In the banks, over the counter withdrawals are also made to be difficult and withdrawal limits lower that what is approved by the CBN. Withdrawals at ATMs are also kept at a daily limit that you just have to patronise a POS operator in order to be able to have amounts needed to complete transaction of high amounts. My take is that, the current and previous instances of cash scarcity are artificially induced by the DMBs and the tactical negligence of the CBN. Tactical because it appears as though they are all profiting from the business."

Also blaming the prevailing cash scarcity on bankers and POS vendors, Chief. Michael Nsan, told our correspondent that: "cash scarcity is mostly artificial and most beneficiaries are bankers. They purposely hoard cash and sell to POS Vendors who in turn sell at higher rates to clients. Also this scarcity causes everything to rise. Similarly, it is always a norm these days to notice that during the Christmas and New Year season, fuel marketers hoard fuel to create artificial scarcity, then we find black marketers all over the place selling at incredibly high prices, the main beneficiaries are the marketers. Cash scarcity, with the influx of POS Service providers is artificial and end beneficiaries are the bankers. The Government should intervene."

Also, a logistics business owner, Mr. Patrick Upla joined in the knock on bankers and POS vendors for instituting the scarcity. "Most of the POS points in town are owned by bankers and managers of various banks. So, it is a deliberate and intentional act so that they could make plenty of money this Christmas season from the masses. Banks are no more putting money in their ATMs so that when your salary is credited to your account, you will be compelled to use POS. It is a strategy to extort money from people this season. CBN need to come in and always check those banks that their ATMs are not dispensing money."

Similarly, a retired civil servant, Mr. Cyril Adinye, expressed dismay that the cash scarcity is fast becoming a perennial issue. "It is becoming a perennial issue. This of course is an aberration. It is alleged that bankers are largely responsible for this endemic situation because most of them are POS operators and prefer to work with their colleagues who are in the same business. My wife told me early October to get money from the banks before the scarcity and it came to pass because it has become a phenomenal thing and unfortunately, those at the helms of affairs either lack the stamina or have decided to be lukewarm."

However, a POS along MCC Road, Christiana Esing said: "We are all in this together. We cannot be blamed for the current cash scarcity. Some of us leave our business premises and queue for long hours at the bank before we can get money. How can we go through all of that and still be the cause of the cash scarcity?" She queried.

Seeing the whole situation from a different perspective, a female Bolt Driver, Mrs. Stella Etim, called on Nigerians to change their lifestyles and adapt to the current situation. "I think we should all learn to adapt to the current situation. Our lifestyle should also change. Our mental health is very important. It calls for adaptation and we have adapted to the current situation." She said.

The cash scarcity biting hard seems not to be limited to Calabar in Cross River State. According to an experienced accountant and financial analyst, Mr. Moses Odey, "the cash scarcity is not peculiar to Cross River State alone, it's a national issue. All the States of the Federation are experiencing same scarcity. The major challenge we are having concerning the cash crunch is that due to the introduction of Post Office Services (POS). Commercial banks have used this as avenue to mop up fund to finance their private POS operators. This is one of the major reasons why the Automated Teller Machines (ATM) installed by the commercial banks are not funded. Attention is focused on funding the POS operators than the ATMs. This shows that personal interest supersedes public interest. The banks are using the Yuletide season like in the past years to mop up fund to finance their private POS operators that is why the cash in circulation is scarce and competitive as a result, the POS operators have increased their charges by 100%." Odey said.

According to Odey, this is one of reasons why the Central Bank of Nigeria (CBN) being conscious of the negative activities of commercial banks, recently decided to mandate all commercial banks to raise cash payments over the counter from #5,000 to #50,000. Also, that the ATMs must be funded. "CBN has put stringent penalties on defaulting banks. It has also put in motion surveillance team to enforce compliance. In my opinion defaulting banks should be sanctioned. This is the only way sanity can return to the circulation of cash in the economy." Odey, stated.

In a swift remark, a seasoned accountant and former MD/CEO of UNICAL Micro Finance Bank, Chief. John Owan, said that: "CBN is not supplying sufficient cash to commercial banks with the desire of driving down the cashless policy seriously. Besides there’s unwholesome practices between some bankers and POS operators. When ATM’s are loaded POS operators and others drain them and hoard cash. You may not believe it but Naira is being sold now like other commodities. Very unfortunate." Owan, said.

Another seasoned accountant and scholar, Dr. John Abang stated that: "The scarcity is the aftermath (de-merits) of operating cashless policy in an underdeveloped economy. The cashless policy in itself is a good policy but, is our economy grown enough for it? Majority of Nigerian are in the low income cadre and are not ready to face the accompanying challenges associated with electronic fund movement. Secondly, the CBN has helped in complicating the situation by putting restrictions on cash withdrawal and this has given rise for cash trading by few Nigerians who seize every opportunity to exploit the poor masses." Abang, opined.

It was observed that N200 was charged for N5, 000 withdrawal. At some business and entertainment spots, the charge for N5, 000 withdrawal, went as high as N300. Also, the charge for withdrawal of N10, 000 which was formerly N200, went as high as N300, N400 and even N500 in some busy yet less competitive POS areas.

CBN issues circular

In view of this, the Central Bank of Nigeria had issued a circular, dated November 29, 2024 and jointly signed by the CBN's acting Director of Currency Operations, Solaja Olayemi and its acting Director of Branch Operations, Isa-Olatinwo Aisha, and directed Deposit Money Banks (DMBs), "to ensure efficient cash disbursement to customers Over-The-Counter (OTC) and through ATMS as the CBN will intensify its oversight roles to enforce this directive and ensure compliance." Given this background, residents of Calabar, Cross River State, can report an otherwise situation to the provided apex bank's email address and phone number (calabar@cbn.gov.ng), (08176657063)