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  • Features
  • Updated: January 29, 2023

How Vendors, POS Operators Are Cashing Out Massively From Naira Redesign Debacle

On February 10, 2023, the old denominations of N1,000, N500 and N200 notes will become ordinary papers with zero value in Nigeria.

The new notes are strangely not in circulation as required but some Nigerian vendors and POS operators who dubiously possess them have seen the shortages as their means of cashing out and exploiting ordinary Nigerians.

President Muhammadu Buhari, in an interview with Premium Times, said there is no going back on the new policy while the Central Bank of Nigeria’s anchorman, Godwin Emiefele also insisted that the three months given for Nigerians to change their money into the new notes is sufficient if one’s source of riches is legitimate.

Despite pleas and pressure, the authorities in charge of Nigerian currency only extended the expiration of the old notes for just a few days.

But POS operators such as Fausat Oyeniyi in the Owode area of Oyo town are exchanging N1,000 old notes with a meagre N200 of the new notes. 

She, alongside many others who are taking advantage of the new naira shortages, is having a free hand because bank customers cannot make withdrawals through the Automated Teller Machines (ATMs) as most of the machines have been shut due to the non-availability of new notes, while the few dispensing cash have long queues of desperate customers.

Naira Note Exchange: A New Business In Town

Fausat has become the new notes distributor in the neighbourhood.

She has not been humanitarian about it; it is strictly business. 

Sources told AllNews Nigeria that she has been on the cash swap trail for more than two weeks.

Via a phone conversation, our reporter disguised as a potential customer engaged Fausat.

He told Fausat that he had N60,000 of old currency he would like to swap for the new notes.

"This is how I run it; if what you want to swap less than N10,000, I charge N200 for every N1,000.

"But if what you want is from N10,000 upwards, I charge N500 for every N1000", she said.

Fausat told AllNews Nigeria that she was left with no choice because she heard in the news that very soon her POS business would soon become unsustainable.

"Let me be frank with you because I seem to like you.

"This is my chance to have my way at least. I took the pain to get the new notes.

"This is business. You are left with two choices; either you do my bidding or you wait till the money becomes useless", Fausat added.

We asked her how she got the new notes and she said she "manoeuvred her way through it and also had to settle some forces".

How will Fausat exchange the old notes?

She said a top official she refused to name assured her to come to the bank on Sunday to change them. 

"It is not free. I will also pay for the exchange. Everyone is cashing out from this one-time business", she quipped.

At Whose Expense?

Ordinary Nigerians are the direct receivers of the naira hardship and illegal business dealings.

A student of Obafemi Awolowo University (OAU) who identified herself simply as Aderiike told our reporter vendors in and around the institution have been requesting the old notes since last week.

She added that even supermarkets, stores and eatries have rejected the old notes since January 26, 2023.

"We are struggling in Ife here. Vendors and transport operators rejected the old notes even before the deadline.

"At a time like this when transport fares are above board, they would say N1,000 old note equates to N500 now."

In Ondo State, Kolade Michael, a private school teacher, told AllNews Nigeria that they couldn't even get hold of the new notes in areas like Omi Ifon, Ikare Akoko and many other places in the state.

"I find it appalling that those who have the new notes are selling it.

"POS operators here sell N1,000 old notes for N500 new notes.

"They need to understand that the old notes are also the money we received through legitimate means.

"Some of us received our salary in December in cash.

"To change it now, it is double what we received. This is a national wickedness."

Nigerians Are Losing Patience

Kolade Micheal said with the irresolvable business patterns going on with the cash swap, Nigerians could turn their back on due process and attack commercial banks if care is not taken. 

AllNews Nigeria's correspondents across the country reported that customers surrounded bank branches in different parts of the country on Friday in attempts to withdraw new notes for use during the weekend and deposit old notes to avoid the monies becoming counterfeit before Tuesday’s deadline, which has now been extended.

Our reporters in Lagos said security guards at bank branches could hardly control the huge crowd trooping into banking halls over the weekend.

More depressingly, it is almost becoming a rigmarole degenerating into clashes between bank officials and customers.

Customers in some banks visited by our correspondents over the weekend complained that customers resorted to attacking bank officials because they had waited for long hours with no positive takeaways.

To curb the imminent social disorder, banks have taken extra security measures to prevent angry customers from attacking their branches and destroying facilities.

Who Is Lying? 

The Central Bank of Nigeria (CBN) has repeatedly assured Nigerians that there are enough new notes to cater for the swap.

But a bank manager in Ibadan who spoke to our reporter in confidence said the assurances by the apex bank are nothing to go by because commercial banks are not getting enough.

"Honestly, the cash with us is inadequate. My branch received N9 million in new notes to be loaded into four ATM terminals.

"Ordinarily, each ATM takes at least N8 million in N1,000 notes.

"Technically, we will now make do with N3 million in only three terminals.

"Before long, the money in them would be exhausted."

“Not only do we have to contend with shortages, we also don't get the money regularly.

"We got just N4 million on Friday which didn't take long before our ATMs were emptied."

In Dugbe Ibadan, another bank manager disclosed to our correspondent that bank officials now work in fear of security breaches. 

"The effect is that armed policemen who were not always visible in banks now parade bank premises.  

At the First Bank branch at Iwo road, Ibadan, only one ATM dispensed N100 notes to customers.

A customer, Ruth Adenrele, who attempted to deposit N50,000, had to abandon the bank and patronise a Point of Sales agent outside the premises, who charged him N7,000 to collect the old notes from him.

The Technical Deficits And Repercussions 

A top official in another bank revealed that CBN does not provide sufficient new notes for banks to the needs of customers, adding that the apex bank was giving the banks only 10 per cent worth of new notes for the volume of old notes they returned.

"The CBN gives us just 10 per cent of new notes of whatever amount of old notes we collect from customers and take to the CBN. 

"It means that when we receive N1 billion in old notes from customers and take that to the CBN branches, the most we will receive is N100 million in new notes to load into our ATMs."

When the structural inadequacy struck, he said banks were rationing their little in the ATMs and mixing old with the new notes.

He added that CBN compounded their woes when it banned banks from loading the old notes into their ATMs. 

"All we do until these shortages are addressed is to load the machines with the new notes and N100 (that is not redesigned) and when they get exhausted, we shut down the machines and await the supply of the new notes, which does not come promptly", the banking guru added.

Because of these unending new notes crises, people such as Causat cash out while ordinary Nigerians crash out of cash.  

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Yusuf Adua
Yusuf Adua

Yusuf Adua is an investigative journalist passionate about politics, solution-based reporting and f...

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