Nigerians complain of cash crisis and gasoline price rises disrupt livelihoods

YINKA OLUKOYA, PAUL OMOROGBE, JUSTICE NWAFOR and YOMI AYELESOin this piece, report the disruption of livelihoods following the arbitrary rise in price of premium motor spirit (aka petrol) and the unavailability of the newly introduced naira notes.

At the Farin Dada Market on Bauchi Road in Jos, Plateau State, Abubakar Musa, 56, stands cross-legged over his sacks of cucumbers standing nearby, watching. Abubakar quickly scans the coves, looking for anyone who appears to be carrying some cash. Expecting to sell quickly, Abubakar arrived at the market around 8am. However, by 2 p.m., only one bag of the eight bags he brought had been sold, which is unheard of for him.

In the Hausa language, he told the Nigerian Tribune on Monday: “I have never had such bad sales in a long time. People used to come and pay for the cucumber and within two hours I was done for the day. But now they are all complaining that there is no cash.”

They are not short of money; rather, according to Abubakar, they cannot withdraw money from the bank. “Even when I lowered the price, no one was willing to buy,” he added.

Abubakar is just one of many buyers and sellers in the crowded market struggling with cash shortages and declining sales. The low sales, the Nigerian Tribune found, have left their businesses in serious trouble as many buyers now prefer to stay away from the market.

According to numerous sources in the market, fewer people are visiting the market due to the lack of cash and at the same time sales and profits have fallen significantly. This is especially problematic for suppliers like Abubakar whose products are perishable and have a short shelf life. Other market vendors told the Nigerian Tribune that due to low sales, they would have to throw away many of their products and suffer losses.

For example, baskets of tomatoes were packed in the tomato section of the market, which was unusual two weeks ago.

“I rely on this business to feed my family and everything that affects this business affects not only me, but the lives and well-being of my children and wives,” said Abubakar.

The current economic climate is not ideal for business owners, entrepreneurs and the majority of Nigerians across the country, just as it is for Abubakar and other vendors in the Farin Dada market: it is difficult to get cash, sales are dropped and the fuel shortage has made things worse.

How did this start?

On Wednesday, October 26, 2022, Godwin Emefiele, the governor of the Central Bank of Nigeria (CBN), announced the top bank’s intention to redesign and issue new N200, N500 and N1,000 banknotes.

According to the governor, President Muhammadu Buhari had given his blessing to the development. Therefore, Nigerians who hold cash in any of these denominations must return it to their bank before the January 31, 2023 deadline.

He added that the new currency will enter circulation from Thursday, December 15, 2022, citing additional reasons for the change, such as the hoarding of banknotes by Nigerians, the increasing risk of counterfeiting and the lack of clean and suitable banknotes.

The issue date has been reached; there were hardly any new bills in sight, and the old bills prevailed. As the January 31 deadline approached, chaos ensued at banks’ ATMs as customers rushed to get their hands on the new cash. Two days before the deadline, the apex bank extended the deadline by 10 days and assured that there were enough notes to serve the Nigerians. But the situation seems to contradict the top bank’s assurances. Long queues remain and point of sale (POS) operators now charge up to 20 percent of any amount withdrawn. Initially, only the new notes were hard to come by, but reports indicate that even the older notes are now in short supply.

While this bites, fuel scarcity across the country has made the situation even worse. While Nigerians are not new to long queues at gas stations, especially during holidays, the spillover to January and now February seems to be a highlight. In some parts of the country, a liter costs as much as N450 in gas stations, while on the street, a liter costs as much as N500.

The economic hardship of many Nigerians has been exacerbated by this double whammy. With inflation still hovering above 20 percent and the unemployment rate above 30 percent, the impact of this crisis is really deep. For Nigerians in remote communities and those without access to banking services, this situation is even worse as there are few or no resources to obtain the new banknotes.

‘Aunty B’, as she is popularly known in her neighborhood, is an adult single woman living in Ibadan, the capital of Oyo state. She was at a store not far from her home on Monday morning to pick up some snacks — “egg roll” and drink — before heading out for the day.

Before paying, she asks the snack saleswoman if Timileyin, the POS operator in the area, showed up that morning. Aunt B asks so she doesn’t have to go through the unprecedented and unusual process of paying for snacks via bank transfer as she did when she came to buy snacks earlier in the weekend. The answer to her question is negative. Timileyin has been unavailable for the past four days. Timileyin has yet to get money for his business from the bank.

ATMs of several banks were found empty while the few carrying cash were besieged by customers.

The Nigerian Tribune made the comment after visiting a number of bank branches in highly commercial areas of Ibadan, including Mokola, Dugbe, Queens Cinema and Oke Ado.

Reports from the city’s Molete and Challenge neighborhoods indicated that ATMs in these locations were also mostly empty.

Customers were observed to be wary of collecting old notes from ATMs, while others simply wanted to withdraw money.

How businesses have been affected

In Ibadan, ATM operators have had to increase charges for cash withdrawals. A withdrawal of N5,000 that would normally attract a fee of N100 now attracts a minimum fee of N300, and in some locations up to N700.

Many ATM operators have even resorted to rationing the amount a single customer can withdraw. The limit is N2,000 for some POS terminal operators.

‘My wife could only withdraw N1,000 at a bank counter’

Bola Yohanna, a POS operator in the Molete area of ​​Ibadan, explains how difficult it was to get money to run his business. “I haven’t been able to do any business for four days. When you enter the bank, the bank gives you N1,000 over the counter. If you want more, they direct you to the ATM. When you get to the ATM, the maximum you can withdraw is N20,000. And you have to queue.

“Today my wife stood in line at the ATM from about twelve o’clock. Around 5pm they were told that the money in the ATM had run out! At the moment there is no money for our company. She could only withdraw N1,000 from the other side of the counter!

In another part of Ibadan, precisely Akobo, a saleswoman who called her name simply Titilayo said that the naira scarcity had seriously affected sales in her supermarket.

“People can’t withdraw their own money and that affects sales.”

‘We pay N1,500 for N10,000 by POS operators’

Bad sales aside, she added that “the POS folks here charge N700 for a withdrawal of N5,000. If you want N10,000, the charge on it is N1,500!

She said the situation cannot be sustained for long.

“People are really suffering,” she added. “Three people came to my supermarket asking for money. One of them said he only needed N1,000 to buy food because he couldn’t get money from three POS operators he visited!

“He begged and knelt down and was willing to give me N200 as a charge! He wouldn’t have eaten this morning if I hadn’t given it to him.

In Ogun, some commuters traveling outside the capital have started hitchhiking to their destination. The transport fare from Abeokuta to Sagamu increased from N800 to N1000 since the fuel shortage started, as have other intercity fares.

A leading noodle manufacturing company raised all prices of its products with immediate effect on the first day of February.

Food prices continue to rise daily as the scarcity of Premium Motor Spirit (PMS) bites harder. There is little patronage of foodstuffs, due to lack of money.

Many residents spend hours at various ATMs trying to obtain money that is not available, while many queue endlessly to buy gasoline where it is available.

A trader at Kuto Market, Ms. Afusat Oseojuolohun, complained about the low consumer protection of goods. She told the Nigerian Tribune that five liters of palm oil she sold for N5,500 last week has risen to N6,500 this week.

While another trader in the pepper trade, Modupe Ariyo, said that the prices of tomatoes, onions, chillies and the rest have risen from N3,000 to N4,000 from Ogere market to Abeokuta.

Ms. Funmi Esuruoso, a provisions seller who also works in Kuto market, complained daily about the high cost of goods.

“The people who control the affairs of this nation are not treating us right. We suffer in the midst of plenty. It hasn’t been the same in our business for over a month. No thanks to fuel scarcity and the introduction of new naira notes. I can’t understand why we are going through these difficult situations. I buy a liter of petrol at N350 in my car to take my children to school and my shop. I know how much I spent buying gas.

“You should help us beg those in authority. We are getting tired of these negative events around us,” she added.

In Ekiti state, the increase in fuel and scarcity, including the difficulties of accessing the new N200, N500 and N1,000 naira notes, have subjected more residents to hardship.

The Nigerian Tribune noted of the few stations visited that a liter is sold between N300 and N500, a development that has caused untold hardship for residents across the state.

The scarcity of the naira notes has made it possible for PoS operators to get involved in brisk business by charging exorbitant prices from those who patronize them for the naira notes.

The fuel scarcity has also led to an increase in transportation rates across the state, hinting to motorists about the hardship they face in getting the product at higher prices.

Investigation revealed that Ado to Awo-Ekiti, formerly N300, has been increased to N500; Ado to Oye-Ekiti is now N800 from the original N300.

When visiting the major markets, food prices were also affected by the scarcity of fuel and naira notes.

Students of Ekiti State University, Ado-Ekiti, protested in front of the university gate on Wednesday because of the increase in transportation costs to the campus. The large numbers of students blocked the road leading to the institution and caused a traffic jam.

The president of the student union, Dotun Ogunsanya, announced that the students would not allow the increase in the fare of the shuttle bus from N200 to N400. He called on drivers and school management to work together to bring the fare back to its original price in the interest of struggling students.