Banks in Lagos began paying out cash to their customers Tuesday morning, a day after President Muhammadu Buhari said the Central Bank had no good reason not to obey the ruling of the Supreme court restraining the central bank.
At several bank branches visited by our reporters in the commercial capital Tuesday, bank customers were seen at ATM queues taking out cash.
Others were seen inside banking halls filling out withdrawal forms to obtain cash from their accounts.
Many of the banks did not impose any withdrawal limits as had been the case before now and their ATM machines were also fully loaded with the old notes. Customers were overhead cursing those in the central bank and the government for the suffering they had been through for more than a month..
The untold hardship faced by Nigerians because of the Naira shortage had led to business closures and daily paid workers losing their jobs.
Mohammed Abdulsalam, a 56-year-old farmer and father of five, is worried as he watches his source of livelihood gradually go down the drain.
Abdulsalam’s 10 hectares of tomato farm in Karu Local Government of Kano State has become a shadow of itself over the persistent naira scarcity in Africa’s biggest economy.
Ahead of the initial deadline (January 31) for the country’s currency swap, he was stuck with about 200 baskets of fresh tomatoes he could not sell owing to the scarcity of naira and his inability to have a bank account.
The cash shortage in the country has reduced the demand for goods and services as cost-conscious consumers are finding it difficult to meet their daily cash needs for transactions, forcing many to cut down on purchases as most of the businesses, especially in the food sector, are informal and heavily cash-reliant.
“The business from which I have earned my income is almost collapsing,” Abdulsalam said. “I had to sell each basket of tomatoes half the production cost as people were not willing to buy owing to naira scarcity.”
He said he had to reduce prices so he could sell his goods “or I would lose everything as my produce is highly perishable”.
He is unable to accept online payments as he does not have a bank account. “I have incurred a huge loss due to the scarcity and am yet to get enough resources to go back to the farm again,” he said in a voice devoid of hope.
He has suffered an estimated revenue loss of about N1.5 million owing to the short shelf life of tomatoes.
Many farmers like Abdulsalam across the country who grow perishable produce have suffered severe losses due to cash scarcity caused by the naira redesign policy of the Central Bank of Nigeria.
The situation has impacted their livelihoods negatively, with many shutting down their businesses. It has led to a surge in post-harvest losses currently estimated at $9 billion.
It is also threatening the jobs created in the agricultural sector in recent years. President Muhammadu Buhari had said in December that the agricultural revolution by his administration had led to the creation of over 13 million jobs.
“If the naira scarcity persists till May when the Buhari administration hands over to the incoming president, several jobs will be lost in the agricultural sector,” said Abiodun Olorondenro, operations manager at Aquashoots.
Read also: Banks dispense old naira notes after CBN’s directive
According to him, several jobs are being lost as farmers lament losses and cut down on production. Nigeria’s unemployment rate stood at 33.3 percent as of the fourth quarter of 2020, based on the most recent job data from National Bureau of Statistics.
In December 2022, the Central Bank of Nigeria (CBN) launched the currency redesign programme to tackle inflation and mop up excess liquidity outside the banking system.
But the policy, which has been poorly managed by the CBN, has failed to tackle inflation and is now a threat to farmers in Africa’s biggest economy who are currently battling high costs of input, logistics, and changing climate.
Kabiru Fara, national president of the Agro Inputs Dealers Association, said the naira redesign policy has badly affected the agricultural sector as most of the rural farmers do not have bank accounts.
“In Zamfara – a top agricultural producing state — only has banks in two local governments; then how do you drive a cashless policy in such a place?” he asked. “I hope the policy is looked into and reversed if possible.”
Farmers have continued to count losses owing to the cash scarcity and they fear it could trigger a looming food crisis in Africa’s most populous nation in the second quarter of the year as production declines.
The sector, which recorded its lowest growth in a decade in 2022, will see a further drop in growth over the lingering naira scarcity that has forced many farmers to cut down on their production hectares, according to experts.
“The persistent naira scarcity is killing lots of farming businesses. It is going to negatively affect crop production and the sector’s growth in the first quarter,” said Debo Thomas, chief executive of Hastom Farms in Ogbomosho, Oyo State, said.
