During a recent trip from Delta State to Lagos State, Onajite Umukoro, who travelled with a popular transport line said she had to part with an extra N2, 000 because she did not have cash and opted to pay for her journey electronically.
“I was told that the trip would cost N12, 000 if I had cash and N14, 000 if they were to take it from my account. So because I didn’t have cash, I paid N14, 000 using my ATM card,” she told TheNewsGuru.com (TNG).
Folake Adeniran residing in Sagamu in Oyo State said she has been unable to stock her house for the past one week due to the scarcity of cash in circulation.
“I have been trying to get cash for more than a week now but it has been unsuccessful. The queues at the banks are ever so long and the POS operators say they also don’t have cash to give.
“At the market here in Sagamu, traders reject online payments and insist on cash. Just today, I tried to buy plantain to prepare food for my family but the seller would not accept transfer. So one has money in the bank but can’t access it. We’re just managing to eat anything we can find. It’s really sad,” Adeniran said.
The slow rate of circulation of money in the economy or low liquidity has persisted in Nigeria despite a Supreme Court ruling last Friday extending the validity of the N200, N500, and N1,000 Naira notes till 31 December.
A seven-member panel of the court led by John Okoro, held that the directive of President Muhammadu Buhari for the redesign of the new notes and withdrawal of the old notes without due consultation was invalid.
Emmanuel Agim, a member of the panel, who read the lead judgement, condemned the President’s refusal to obey the Court’s order given on 8 February, for the old N200, N500, and N1,000 to continue to serve as legal tender pending the determination of the suit filed by three state governors but later joined by 13 others.
Buhari had issued a broadcast on 16 February directing that only the N200 notes should be recirculated, while the N500 and N1000 remained banned.
“It is not in doubt that the President refused to comply with the order of the court that the old 200, 500, and 1,000 naira notes should continue to be legal tender.
“Disobedience of order of court shows the country’ democracy a mere pretension and now replaced by autocracy. This suit is meritorious,” the Court said.
A final ruling by the Court on the matter delivered on 3rd March has not abated the cash scarcity situation and has left citizens more confused about the position of the government, especially as neither the Central Bank of Nigeria (CBN) nor the President have publicly indicated willingness to comply with the verdict.
In some parts of the country such as Lagos, some commercial banks began to reissue the old N500 and N1000 bank notes to customers, but spending the money has posed a challenge as business owners remain sceptical of accepting the old currency in exchange for a product or service.
The Governor of Ondo State Rotimi Akeredolu, on Thursday condemned the rejection of the old naira notes by residents and the informal sector of the economy in a state-wide broadcast.
Akeredolu said: “For the avoidance of doubt, the court ordered that both the new and old notes should not only coexist but be accepted and used side by side by all Nigerians until the end of this year when the proper elimination and substitution of the old currency notes would have been completed”.
TNG observed that in most cases, business owners demanding cash payments would ask to know which version of the naira notes a customer had before commencement of a transaction and although more traders were now embracing online payments, they arbitrarily charged an extra fee which they say is the cost of converting the electronic payment to cash.
Interestingly too, the majority of traders in markets and businesses sampled by this newspaper were not using the traditional online payment platforms owned by commercial banks, especially after most of them experienced service failure in the wake of implementing the cashless policy weeks ago.
Our reporter observed that digital wallet platforms which bridge the financial exclusion gap while making transactions a lot easier and faster, have been the choice for many business owners, especially in Abuja and Lagos.
A digital or electronic wallet is a software, electronic device or online service that enables individuals and businesses to make transactions, such as receive money, send money, buy airtime, pay bills, and make online payments everywhere from their mobile phones instantly.
While some Nigerians are adapting to the new way of doing business, many expect that the CBN or President Buhari, would give a clear directive on whether or not the old N500 and N1000 can be used as legal tender until 31st December, in line with the Court’s ruling.
A concerned Nigerian Nwokolo Uju, said: “The Central Bank should let us know if the old N1000 and N500 naira notes are still legal tenders because they have created confusion in the country. Their silence on this issue is malicious”.