Businesses in Nigeria are facing a double whammy as new naira notes remain in short supply, even as the deadline for the old ones approaches.
The situation has forced many businesses to opt for electronic channels to carry out transactions in an effort to reduce the volume of old bills that arrive from their customers.
Following the redesign of the N200, N500 and N1000 notes, the Central Bank of Nigeria (CBN) began distribution of the new notes on December 15, saying that the old ones would cease to be legal tender on January 31, 2023.
But almost a month after the redesigned notes went into circulation, they are still difficult to obtain from banks. Many ATMs and Point of Service (PoS) agents still dispense only the old naira notes.
BusinessDay realized that some business owners in some parts of the country were not accepting the new notes due to their scarcity.
“I haven’t seen the new naira notes even when I go to the bank or use the POS machine, but they say the deadline for using the old notes is soon,” Ezinne Gabriel, boutique owner in Fadeyi , Lakes. said she.
“But these days I prefer my clients to pay by transfer so I can reduce the volume of old bills with me.”
An Apapa merchant told BusinessDay: “Customers who come to my store no longer pay cash; they prefer to make transfers to me. I always make sure I get an alert before I deliver my products to them.”
The CBN has repeatedly said on its verified Twitter page that the current series of N200, N500 and N1,000 banknotes remain legal tender until the deadline of January 31, 2023.
“Customers should be encouraged to use alternative channels (internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to carry out their banking transactions,” it added.
In 2012, the main bank introduced the cashless policy, which was aimed at curbing excessive cash handling and reducing the volume of cash in circulation.
The policy was introduced to boost the development and modernization of payment systems capable of placing Nigeria among the top 20 economies in the world.
The Nigerian Interbank Settlement Scheme (NIBSS) said in a recent report that the COVID-19 pandemic had changed the landscape of electronic payments and accelerated the adoption of instant payments as people switched to electronic channels for the exchange of money.
According to NIBSS, instant payment transactions from January to November 2022 amounted to N311.81 trillion and PoS transactions amounted to N6.85 trillion, indicating a strong uptake of digital payments in the country.
In September 2022, the value of instant payment transactions increased to 32.8 trillion naira, an increase of 39.5% compared to 23.5 trillion naira in September 2021.
The October figure stood at N34.5 trillion, a growth of 42 per cent on the N24.3 trillion recorded in the same month of 2021.
Instant payment transactions rose to N38.9 trillion, up 50% from N25.9 trillion in November 2021, according to NIBSS data.
Some business owners in parts of the southeast do not accept the new naira notes, many of which were brought by travelers from the Federal Capital Territory and other parts of the country who returned home for the festive season.
When one of our correspondents visited a shop in the Agwuata area of Anambra State to buy some items with the new naira notes, the shop owner refused to accept the new N500 note.
Adaku Okafor, 45, who works in cassava processing in the Ihie area of Abia state, said he had not seen the new notes in his business transactions since the notes were launched.
“I haven’t seen the money yet; In all this town and surrounding communities where I carry out my business, we still use the old bills; you can’t see the new notes anywhere. I won’t even take the money when it’s offered to me because it’s not popular here and I might tie up my cash. I don’t know how long it will be before the notes start circulating here,” she said.
A community resident, Emmanuel Chikeziri, said he is looking forward to seeing the new bills but will not accept them as they may be useless for a while.
“No one in this town knows what the new bills are like; we continue to buy and sell with the old notes that are still very valuable to us here, despite the fact that the government has set a deadline for the money to be taken off the streets,” he said.
“I won’t take the money unless you give it to me for free,” said another trader and farmer who gave her name simply as Chinyere. “I can’t accept it because no one will accept it here,” she added.
Also Read: Traders Express Concern Over New Naira Shortage
Beatrice Ezennaya, a small shopkeeper in Bwari, Abuja, said she had not yet received the new notes. “We are still operating with the old bills; new bills are very rare here. My clients still bring the old bills to buy things.”
The Senate has urged the CBN to extend the withdrawal date for old banknotes from January 31, 2023 to June 31 to avoid imminent hardship for Nigerians, especially citizens who live in rural areas and may face extreme difficulties in accessing to the new banknotes. .
The CBN aims to solidify the growth of electronic payments, continually offering competitive services to consumers and absorbing industry innovation, while contributing to Nigeria’s economic growth.
“By 2025, the country aspired to have an efficient, cashless electronic payment system infrastructure that would facilitate financial services across all sectors of the economy,” the main bank said in its Payment System Vision (PSC) 2025 document.
There have been strong increases in the volume and value of electronic payments. Defining the industry roadmap for the next two years, PSV 2025 focuses on initiatives such as contactless payments, big data and open banking, and artificial intelligence, among others, that will further drive digital innovations and electronic payments. in nigeria.
“By 2025, the Agent Banking Initiative and other industry solutions will further help improve financial inclusion in Nigeria,” he said.