Naira Scarcity: Businesses Record Losses

Some small-scale industrialists and business owners in the Federal Capital Territory (FCT) have kept track of their losses due to the ongoing shortage of new Naira notes.

They said the scenario was harming their companies as they continued to see poor patronage, they told the NAN on Sunday in Abuja.

The revamping of the naira is truly a good concept, but the implementation happened at the wrong time, says Dr Solomon Vongfa, the National President of the Association of Small-Scale Industrialists (NASSI).

Vongfa asked the Federal Government to act immediately to remedy the crisis, expressing worry that the country's commercial activities were being negatively impacted by the Naira shortage.

He said that the businesses of most members of the association were going down thus bringing hardship to them.

“Also, the time limit they gave for the exchange of the money has brought untold hardship on Nigerians, people are fighting in the queue as they can’t withdraw their money.

“It is not a palatable thing. It has really affected a lot of people as so many businesses are down because of this situation.

“Some people may not be able to recover from this experience that they have had because many businesses are shut down.

“These are people who depend on daily activities to get small money but they are finding it very difficult.

"Some of them do not have bank accounts.

“For those who have bank accounts, you may say after the storm they will still go back to their banks and get back their money but people who depend on daily activities to run their business using cash may not survive it,’’ he said.

However, Vongfa encouraged the Central Bank of Nigeria (CBN) to step up efforts to make sure that cash is distributed through the POS to all areas of the nation.

Vongfa encouraged the Federal Government to provide the necessary technologies to improve electronic cash transfer while expressing concern that some people would take advantage of the possibility to cash out.

He stated that because the infrastructure needed to run this item is not as readily available as anticipated, transferring is a challenge.

Because there are so many users on the network, it has already been duplicated.

“It is not an easy one and even to see the cash is also another problem, the people who manage to get it to take advantage as a business and start marketing it,’’ he said.

Similarly, Dr Abdulrasheed Yerima, the National President of the Nigerian Association of Small and Medium Enterprises (NASME) said that the scarcity of the Naira notes has much negative impact on the operations of SMEs in the country.

“We cannot fend for some of our needs and at the same time, most of our Micro Small and Medium Enterprises (MSMEs) cannot pay their staff, especially the casual workers.

“More so, there are no banks and poor network coverage where they are operating, therefore, they cannot operate optimally.

“Some of them don’t have accounts, especially those in the rural areas and some of them cannot afford a smartphone to enable an electronic transfer.

“Their businesses depend on daily activities in the rural areas and they are also battling with the issue of power supply, so it is a lot of stress for them and it is affecting their businesses negatively,’’ Yerima said.

He encouraged the Federal Government to permit both the continued use of the old naira notes and their gradual phase-out.

The owner of a provision store in Wuse Market, Major Anosike, lamented the policy's poor customer traffic.

“Whether we like it or not, we cannot do away with cash generally.

"At least there is a certain percentage of Nigerians that must still need cash to run their businesses,’’ Anosike said.

Similarly, Beatrice Erekosima at Garki Model Market said that she mostly sells via electronic money transfer.

“But when I go to restock my shop, I cannot easily withdraw the money to buy my goods and this is affecting my business,’’ she said.

According to economist Cika Deezim, not enough time was given to allow individuals to make plans for the implementation of the Naira redesign programme.

Deezim also criticised the policy's implementation at a time when the nation was preparing for national elections.

“Electioneering year economically is not too viable because people who want to come and invest will be thinking of the incoming government.

“Investors are sceptical, they are observing this period of political issues.

“People are looking at it that politicians want to use it to share money, no, even a lot of people will not like to bring in their money for whatsoever reason.

“Till the elections are over and we know the winner before they start negotiating how they can come in and invest.

“I expected the monetary policy to have looked at this.”

He claims that due to the several setbacks that occurred between January 2022 and December 31, 2022, investors won't bring in their money during the election year.