Regardless of the Central Bank of Nigeria (CBN’s) efforts to fix the cash crisis, businesses and manufacturers are still in pain, struggling to get the new naira notes coupled with the fuel crisis hitting their operation

Nigerians are yet to feel any respite as the scarcity has brought untold hardship which has affected sales and production.

The CBN had fixed February 10 as the new deadline for the swap of old naira notes, having initially moved it from January 31, 2023. The extension granted by the apex bank for the expiration of the old notes as legal tender didn’t appear to have helped the situation.

President of Manufacturers Association of Nigeria (MAN), Otunba Francis Meshioye, said manufacturers are facing a very critical time as a result of the persisting scarcity of the new naira notes and acute energy crisis manifesting in the scarcity of fuel and high cost of diesel, gas and Premium Motor Spirit (PMS) or petrol.

Meshioye said the current energy crisis, especially the scarcity of fuel as well as the hardship being experienced by Nigerians in accessing the redesigned naira notes were hindering the proper flow of goods to end users, resulting in huge pile of stock for manufacturers.

“The crises are affecting us very badly because at the end of the day, everything we produce have to be consumed in one way or the other and if consumers don’t have cash to purchase products, then we are going to have a lot of stock and this implies that manufacturers’ money is tied down.”

The MAN president also said when stock piles, it also means that manufacturers’ cash is trapped, even as they pay high interest rates. He also said the situation is affecting investments. “Investment goes to where returns come regularly. No investor wants to play with his money. So, it’s a very big issue in our economy now,” he stated.

He lamented that manufacturers are contending with a lot of idle time, which they have to pay for. “So, we are incurring a lot of loses by the fuel scarcity and that goes on to so many other lines such as currency and energy, currency, which are abstract infrastructure that enables proper manufacturing.”

Meshioye, while pointing out that “there is no way any scarcity of any essential thing to a consumer will not affect the producer,” however, expressed regrets that it is not yet everybody who can do electronic transactions, coupled with the occasional Internet connection hitches.

Besides, he said it’s not so easy for one to buy a good and he wants to do a PoS transaction at every point. “So, it’s a very big issue in our economy now. So, when you take all these things together, you want to agree with me that we are really facing a very critical time as manufacturers.”

To save Nigerians and manufacturers the pain inflicted on them by the shortage of new Naira notes, Meshioye called on the CBN to put in place an effective monitoring system to ensure that redesigned notes or money released get to everyone. According to him, an effective monitoring system will also douse tension over allegations of hoarding.

The MAN Director General, Segun Ajaiyi-Kadir, lamented that because of the prevailing currency and fuel crises including the acute shortage of forex, manufacturing is becoming an endangered profession.

On the scarcity of the naira notes, which has affected the purchasing power of Nigerians, Ajayi-Kadir, noted that as purchases from the retail end, mostly transacted in cash dry up, there would be a sharp drop in wholesale purchases leading to a glut of unsold inventories in factories.

“To be clear, there is no doubt that the currency redesign is desirable; there are socioeconomic and political imperatives for the change.

“It is a critical element of the CBN cashless economy policy that should have far reaching positive results for the economy.

“However, the continued scarcity of the new redesigned naira notes is quite worrisome.

“The negative impact it portends for local producers, the agricultural and distributive segments of our economy is huge.

For the Chairman, MAN, Apapa branch Frank Onyebu, so much chaos has been created with implementation of this policy that it’s beginning to erode the objectives.

Onyebu said the economy is already suffering as a result of the cash squeeze and may collapse if urgent action is not taken.

“But above all, as we can all observe, the toll on the people is already creating some social disruptions. There are already instances of breakdown of law and order. This could lead to total anarchy if left unchecked.”

He noted that the Supreme Court’s ruling has provided little or no relief because the problem is not with the extension of the deadline but with availability of cash.

“ It is sad that whatever cash that was released in the system was hijacked by a few individuals with the obvious connivance of high-ranking bank officials, and no one is being brought to book. The common man on the street is being made to pay for the acts of a few corrupt individuals. The situation is further compounded by the fact that most e-payment channels are not working optimally. When they work, some merchants reject them in preference to cash which is not available.

People are suffering. Industries are grinding to a halt because workers are unable to come to work due to absence of cash. We still operate in a highly informal environment. Most transactions are still done in cash.

I do not understand what the objectives of the government is any longer. People are making all kinds of allusions but I do not want to speculate.

“The CBN needs to make more cash available because Nigeria is not fully ripe to go totally cashless. We do not have the infrastructure, neither are the people educated enough.”

The chief executive officer, Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf, said the currency swap could put N100 trillion component of the national GDP at risk, with trade and commerce and agriculture sectors being the most vulnerable.

According to him, most of the activities in these sectors are either in the rural areas or in the informal sector of the economy.

“These are the sectors that have been driving the resilience of the Nigerian economy amid numerous domestic and global headwinds. Any policy measure that would negatively disrupt these sectors should be avoided.

“With 133 million Nigerians in poverty, inflicting additional hardship on the citizens would be unfair, insensitive and inconsiderate. The reality is that presently in many parts of the country, more than half of the currencies in the hands of citizens are still old notes.”

Yusuf further called on the government to give a minimum of six months window for the currency swap exercise.

He stated that the crippling of business transactions at the distributive trade end amid the currency swap crisis would not only undermine the trade and agricultural sectors but would have a knock-on effect on the manufacturing value chain and the services sectors.

“This is because whatever is produced has to be sold. The trading end of the chain has been greatly disrupted by this currency swap crisis.

“We call for the urgent intervention of President Muhammadu Buhari to save millions of Nigerians from the anguish and pain of the current stampede of currency swap inflicted by an unrealistic timeline and glaring capacity gaps in the management of the process,” he added. (Daily Sun)

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