POS business shrinks as naira scarcity bites

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From: Zainab Aderounmu and Eniola Olatunji

Banks have in recent weeks been struggling to pay many customers who want to withdraw their money due to presumed cash shortage in the banking system. The Central Bank of Nigeria (CBN) attributed the scarcity to the hoarding of the naira noted by some persons due to challenges experienced during the naira redesign project. “The CBN has adequate cash to meet the day-to-day transaction needs of Nigerians. We appeal to Nigerians to be patient while the CBN does the needful to ensure the availability of cash, particularly during the yuletide and beyond,” said Hakama Ali, acting director, corporate communications.
A Nigerian living in the United States who recently visited the country to celebrate Christmas and New Year with his relatives told journalists that every effort he made to access enough naira proved abortive. He said: “About a month before my arrival, I sent N2 million to my sister to help me with cash. Would you believe that she got only N250, 000 cash? This is not good news for me. I have been thinking since she told me how I could stay this season in the country where cash is king. In the USA, cash is not king because every payment channel is effective for all your transactions, so nobody bothers to hold cash anyway. If Nigeria’s payment systems are effective, no one would also bother about holding naira. Our government should do something about this. Now the naira is scarce, how does one even handle the situation this season?” Different POS operators had their opinions on the impact of the cash scarcity on their businesses. They said they have had to explore different sources for cash, and that their businesses are shrinking as they are unable to meet their customers’ demand.
An operator who simply identified herself as Kabeerah of HasbunalLah Ventures said: “We are buying cash from market sellers and traders. We buy N30, 000 with a charge of N300, and N50,000 with N500. Also, we get cash from deposits, but instead of charging, we sometimes do it for free or the owners charge us.” She said she had been unable to withdraw from any Automated Teller Machines (ATM), while the maximum amount of money she withdrew over the counter of several banks was N10, 000.
Another POS operator, Maria of Happy Maria Ventures, said she doesn’t even bother going to the bank at all. She said: “It is time wasting. I get my money from market women, and my customers who want to deposit. Sometimes, they deposit N100, 000.” Although she said that her bank still pays a maximum of N50, 000 over the counter, she prefers to source her cash elsewhere. “I have three machines which I normally use for many customers, but I only use one now. No cash for that,” she said.
Another POS operator who declined to be identified said she gets her cash from her brother who works at a fuel station. “He gives me cash from his petrol work, and I transfer it to the company account. I get enough because of the work.”
An operator in Ikoyi said she was able to withdraw N50, 000-N100,000 over the counter of the bank she uses. Mariam Abebi, a food seller along Badore Road, in Ajah, Lagos, said that the cash crunch has not affected her business because customers pay through her POS machine. “People are buying food. It’s not as bad as the last cash crunch.”
In the Ikorodu area of Lagos, some POS operators at the garage were charging the usual fee of N100 for N5, 000 and several traders were also accepting transfers. “The cash scarcity isn’t as bad as before, although people are scared it might become bad. At Ikorodu where I live, it isn’t scarce but in Ajah where I sometimes trade, I pay more to get cash from POS operators,” Kehinde Akeem, a building materials trader, said.
While some traders have said the cash scarcity has not affected their sales, some who buy their goods from local producers in rural areas are faced with the challenge of how to pay their suppliers. “I have accepted several payments through my POS and transfers but I still beg my customers sometimes to pay with cash or use POS agents so I can get cash,” Chibuike, a wholesale raw food vendor at Ilaje market, said. He said that he does this so he can get enough cash to restock. Despite rising inflation, widespread poverty and insecurity, the Federal Government is seen as more interested in squandermania than providing essential services to ease the economic realities of the recent removal of petrol subsidies. In a country where more than half of the population lives in deep poverty, with bread now a luxury item, the Federal Government’s 2024 budget showed a sustained culture of profligacy such as renovation of presidential residences rather than reducing the cost of governance to free up more resources for critical sectors like health and education. For instance, Femi Gbajabiamila, President Bola Tinubu’s chief of staff, is expected to get a total allocation of N21 billion in next year’s budget estimates presented to the National Assembly by the president last month. Before becoming the chief of staff to the president in June this year, Gbajabiamila spent 20 years in the House of Representatives. A breakdown of the proposed figure, however, shows that Gbajabiamila proposed N104 million for the purchase of computers and printers, while ‘local travel and transport for international training,’ will cost N579 million, and ‘miscellaneous’, N103 million. A further breakdown of the proposed budgetary allocations shows that the reconstruction and repair of the Chief of Staff’s official residence will gulp N10 billion.

Responding to the development, Gbajabiamila on Wednesday said the 2024 allocations to the office of the chief of staff are meant for the renovation of the Presidential Quarters in Dodan Barracks and the Vice President’s Lodge in Lagos. “The allocations are meant to overhaul the information management and communications facilities in the Presidency to meet modern standards and to provide vehicles for the staff of the Presidency,” Gbajabiamila said on X, formally known as twitter.
Further findings showed that out of the N4.45 trillion allocated to the ministry of finance, Service-wide Vote alone accounts for N4.41 trillion or 93 percent. Service-wide vote, also known as Consolidated Revenue Fund Charge, is the country’s contingency fund in the annual budget – the sum of money kept for unforeseen expenditure. “It’s a big issue that has gotten worse over the years. Our budget needs retooling because this process is not working,” Oluseun Onigbinde, CEO of BudgIT said on X.
For Sherifat Ademuloye, a widowed mother of six, living in Ikorodu for more than a decade, the scenario is the same. “Life is difficult,” said Ademuloye, who runs a street-food stall. After the death of her husband, Ademuloye has been finding it hard to sustain her children on a meagre income.
Unable to pay for their school fees, she relies on support from aid organisations to cover the cost of education. “The little money I make is never enough,” Ademuloye said. “I can’t afford to buy them other food.”

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