LAGOS – Though the Trade Union Congress of Nigeria (TUC) has told President Bola Tinubu to call the Central Bank of Nigeria (CBN) to order over the scarcity of naira in the country, investigations have revealed that the currency is being hoarded.
The TUC believed that the unfortunate development has continued to subject Nigerians to needless excruciating hardship by insensitive and heartless agents and agencies of government, whose actions and inactions are really difficult to fathom and impossible to defend.
However, not many will believe this, but it is true.
The main reason why Naira has not been circulating freely among Nigerians is not that the banks and the Central Bank of Nigeria (CBN) are not circulating enough, but investigations revealed that traders and point of sales operators (PoS) are hoarding it.
Independent analytics can authoritatively reveal that traders, small business owners, and PoS are the major reason for the scarcity of the currency and the reason given was that they were doing this to prevent the experience of last year and early this year when the CBN redesigned N1000, N500 and N200 denomination.
Naira notes have been scarce in recent times, even though the Federal Government had secured a ruling from the Supreme Court extending the deadline for the use of old bank notes indefinitely.
The CBN had blamed hoarding for the cash crunch
The Central Bank of Nigeria (CBN) last week warned banks and point of sale (PoS) operators against “hoarding” and “colluding” to impact liquidity.
The bank said its attention has been drawn to alleged cases of collusion between some banks and PoS operators to disrupt the circulation of the naira.
The financial regulator said it is investigating the cases, as they are capable of undermining the smooth running of the economy.
“The attention of the Central Bank of Nigeria (CBN) has been drawn to alleged cases of collusion between some Deposit Money Banks (DMBs) and Point-Of-Sale (PoS) operators affecting the availability of cash and disrupting the seamless circulation of the Naira,” CBN said.
“The CBN frowns at such inappropriate actions by certain individuals and is investigating the reported cases capable of undermining the smooth running of the economy.
“The CBN has, therefore, warned banks and PoS operators to desist from such activities as relevant sanctions shall be meted out to those found wanting.”
CBN advised members of the public to use alternative payment channels and report any cases of unauthorised activities, such as capping and hoarding by banks or PoS agents, to the CBN branches in their locations.
For instance, the CBN about two weeks ago pumped N2 billion into banks in Kano and less than five hours later, banks vault were empty.
Some grassroots farmers and petty traders have expressed frustration over the lingering cash crunch in the country, saying the unfortunate incident has been taking a toll on their businesses.
Some farmers and traders who spoke to our correspondent, said they stopped keeping their cash in the banks to avoid the funds getting trapped.
Small and medium-scale enterprise associations who spoke to our correspondent, said the cash crunch would further weaken the government’s efforts to drive financial inclusion, especially at the grassroots.
Abubakar Jindim, a Kano-based farmer and trader who followed his goods to Lagos last week. confirmed that he and his fellow traders no longer accept e-banking transactions and opted for cash instead.
He said, “We are traders, we are always at the receiving end at the end of the year. It was worse in 2023 with the new naira notes. I have told my customers that I would prefer cash.
“I paid the operator of the vehicle that took me and my goods to Lagos N800,000 in cash. This is what we do at this time”.
We gathered that traders in major cities of Lagos, Ibadan, and Abeokuta hoard the naira and refuse to take it to the banks but instead, they are keeping it for their customers who won’t take bank transfers.
Mrs Taibat Adekunle, a trader in Ketu market in Lagos, who claimed she has over N600,000 cash with her, told our correspondent that she has enough cash with her to give her tomato supplier from Sokoto.
Her words, “We are keeping the money for our suppliers. We are not hoarding. I think those who are the suppliers who said they prefer to keep the cash than drop it in the banks.
Mrs Ibukun Ajiwe, a rice trader in the Ogba area of Lagos was more direct in her response to questions from our correspondent when she said, “I don’t hoard naira but I have enough cash to run my business. I can’t wait for the government, CBN, or the banks to help me run my business.
“e-banking platforms not helping in running our business. We are helping ourselves by keeping enough naira”.
Reacting to the development, An analyst, Joseph Maduka, said the CBN has a lot to do to ensure confidence in the banking sector.
He said, “If the CBN is serious, it should look into the activities and operations of PoS operators. They operate without coordination. Nobody is willing to bring them to order. They impose any amount as charges and also engage in hoarding the currency till a time their charges will increase and make life difficult for Nigerians”.
FG and saboteurs
The Federal Government said it will, from next year, go after economic saboteurs who made lives difficult and unbearable for Nigerians.
The Leader of the Senate, Senator Opeyemi Bamidele revealed this in a statement.
He expressed concerns about the activities of economic saboteurs who were doing everything to keep exchange rates high against the Naira or trying to make the Naira unavailable to the people who kept their money in banks.
He, therefore, revealed that the Federal Government “will, from next year, go after economic saboteurs who are making life difficult and unbearable for Nigerians. The government will charge, prosecute and punish them for their acts of economic sabotage.
“All these will take place next year. In the long run, those who mopped up the Naira and Dollars from the markets will face the consequences of their actions. Those who mopped up the Dollars to keep commodity prices will not escape justice.
“Those who are speculating are also on the watch list of the Federal Government. At some points, the government will have to go after them,” the senate leader revealed the plan of the federal government.
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