50k for 10k. 20k for 4k: How we are dealing with Naira notes scarcity – PoS agents tell Neusroom
The crisis created by the scarcity of fuel and new Naira notes in Nigeria is not only creating hard time for Nigerians, but also putting the livelihoods of many small businesses at risk as they struggle to get funds needed to run their businesses.
One of the industries most impacted by the crisis is the mobile money industry which has served as an escape route out of unemployment for many young Nigerians.
Nigeria’s unemployment rate has soared to over 33%, indicating that about 23.2 million Nigerians are unemployed. The unemployment crisis has forced a majority of the country’s young population, aged 30 and below, who also forms about 70 per cent of Nigeria’s over 200 million people, to become self-employed.
It is now common in many parts of Nigeria to see young people operating mobile money outlets popularly known as PoS (Point of Sale). As the number of mobile money agents continue to grow across the nation and with their proximity to residential areas, more people are turning to mobile money agents for banking transactions as a faster option to escape the long queues at ATM terminals.
According to a BusinessDay analysis of IMF survey in 2022, the number of registered mobile money agent outlets per 1000 square meters in Nigeria increased from 141.8 in 2020 to 680.9 in 2021, indicating a 380.2% increase.
The GSMA’s State of the Industry Report on Mobile Money 2021 revealed that over $2 billion were processed daily by the mobile money industry in 2020 across the world and there are 5.2m unique agent outlets globally.
As the unavailability of the redesigned ₦200, ₦500 and ₦1000 notes released by the Central Bank of Nigeria (CBN) in December 2022 and the deadline set for the swap of old notes are causing hard times for Nigerians, some PoS agents told Neusroom how the scarcity is putting untold hardship on them and their businesses.
“At the early stage of this hullabaloo what we do is that we go to the bank then cross anybody that is coming into the bank to make deposit, we plead to transfer the money to them while they give us the cash, but at a point nobody comes into the bank again to deposit,” Babatunde Balogun, a mobile money agent based in Lagos, told Neusroom on Friday, February 3, 2023.
Gbenga Ojatula who is also a mobile money agent said it has been very difficult to get cash for his business.
“The process I went through to get cash was terrible. The bank is now giving us bad ₦20, ₦50 and ₦100 notes due to the scarcity of the higher denominations, and they won’t give us more than ₦5000 and ₦10000,” Ojatula said. “If you need new notes, the bank will tell you to use the ATM and you can stand on the ATM queue from 6 am till around 4 pm. After standing for more than eight hours, one of the staff may come out to announce that they are not loading the ATM again for the day.”
On Thursday, February 2, 2023, the CBN reversed its directive asking banks not to pay the new Naira notes over the counter but only via ATM.
“In line with this resolve, the Governor, Mr Godwin Emefiele, has directed deposit money banks (DMBs) to commence the payment of the redesigned Naira notes over the counter, subject to a maximum daily payout limit of N20,000,” the CBN said in a statement.
Nigerians said they are yet to see the effect of the CBN’s directive as the crisis worsens.
“When I got to a bank at Ikorodu garage in Lagos at 9 am on Friday, I was number 102 on the queue,” another agent told Neusroom. “I left the bank empty handed at 6 pm, I couldn’t get cash. Those who were lucky got only ₦2000 over the counter.”
Ojatula said sometimes after spending hours on the ATM queue, “if you are a customer of the same bank, you could get ₦10000 and other banks ₦1000” which is not enough to run his mobile money business.
Mobile money agents told Neusroom that before the redesigned naira notes, they charge ₦100 for transactions from ₦5,000 and below, ₦200 for ₦10,000 and below, ₦300 for transaction between ₦10,000 to ₦20,000. But since the scarcity started biting harder, they now charge up to 20% per withdrawal due to the difficulties in getting cash to run their businesses.
Balogun said the search for cash has forced mobile money agents to turn to market traders to lobby for cash in order to meet the growing demands of customers. “They (market traders) charge us as high as ₦6,000 naira to get ₦100,000 cash from them, that’s why PoS charges also increased by 10% on any amount.”
“Personally, I charge 10% on every withdrawal, meaning ₦100 per thousand. Ridiculous right? But with these new charges, we hardly make reasonable profit unlike before,” Balogun said. “Some operators are charging as high as 20% per thousand withdrawal just to make substantial profit for themselves. To get cash is a problem, to meet customers’ demand is another problem.”
Ojatula said “sometimes, we spend ₦300 on transport to and from the bank only to come back with ₦10,000. Now nowhere to get cash at all. Without cash I can’t run the business.”
If the crisis continues, some of the mobile money agents told Neusroom they may be forced to take to the streets to protest.
“I heard there were protests in Ibadan today, if I see anywhere youths are protesting in Lagos, I’ll also join them,” one of the agents who spoke to Neusroom said. “The pain is too much.”
