Home Business Economy Businesses grounded, commuters, others facing hard times as naira scarcity bites harder

Businesses grounded, commuters, others facing hard times as naira scarcity bites harder


The continued naira scarcity in all parts of Nigeria has grounded countless small and medium businesses and pushed millions of families to increased poverty.

Their troubles stem from the fact that it is cash that drives their businesses, and although many of them are willing to go cashless, there are many hurdles to cross.

Deposit Money Banks had last week begun to pay their customers the old N1,000 and N500 notes but a lack of official approval by the Central Bank of Nigeria led to mass rejection of the old currencies by businesses and individuals.

The cash crunch continued days after the Supreme Court delivered a ruling in the naira redesign suit and extended the validity of old notes to December 31, 2023.

Despite the pronouncement by the Supreme Court, the Central Bank of Nigeria had yet to make a pronouncement to approve the use of the old notes as legal tender as of Sunday.

Also, the Federal Government had yet to comment on the Supreme Court judgment even though the Attorney General of the Federation was served a copy of the Supreme Court ruling on Friday.

Customers have kept besieging banks on a daily basis with the hope of getting new notes.

In towns and villages, thousands of bean cake (akara) and fruit sellers, vulcanizers, roadside bukkas (food vendors), barbers, wheelbarrow pushers and bricklayers have disappeared.

According to a 2022 report by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the National Bureau of Statistics (NBS), there are at least, 39,654,385 (thirty nine million six hundred and fifty four thousand three hundred and eighty five) micro, small and medium enterprises (MSMEs) in Nigeria as of December 2020, contributing 46.31 percent to the country’s gross domestic product (GDP), and accounting for 96.7 per cent of businesses.

The figure showed a 4.5% decline from 2017 when there were 41,543,028 million MSMEs in Nigeria, indicating how small business owners struggle for survival in Africa’s largest economy.

Checks indicate that some business owners, especially petty traders, do not have cash at hand to transact with, a development that has pushed some of them away from active business engagements.

Mostly affected are petty traders whose net worth is less than N10,000. Those dealing with perishable food items such as tomatoes, peppers, onions, fruits are the worst hit.

Daily Trust on Sunday gathered that the e-banking system adopted to solve the challenges doesn’t work perfectly. Small and medium enterprises have diverse means of receiving money from their customers or suppliers who feed them with working materials, but none can substitute for cash; and the delay from these alternatives is grossly affecting their businesses.

Also, the rejection of old notes by transport operators, fuel stations, traders, and other businesses has placed many bank customers, workers and commuters stranded in various parts of the country.

Several people found very difficult to go to their workplaces and business places as the scarcity of the new naira notes bites harder amid a mass rejection of the old notes.

Several commuters, who spoke with our correspondents, said the worsening naira crisis had got to a near unbearable situation with many workers already missing work due to lack of cash to go to their offices.

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