By Adetokunbo Abiola
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Bank customers in Ondo State have expressed dissatisfaction with the continued pain involved with getting new naira notes through ATMs.
Customers, who as early as 7am since last Saturday have been on queue could only obtain few of the new notes, while many customers trooped into the banking halls to deposit their old notes.
A customer, Idowu Taiwo, said he was expecting to withdraw new notes but got frustrated when he visited the ATM gallery.
Another customer said it was frustrating as a merchant to get the new notes, despite the extension of the deadline.
He said, “I am fed up with this new policy. I no longer keep large amounts of the old notes. It is frustrating. I hope that they will make the new notes surplus so getting the new notes becomes easier. ”
It is a tale of frustration, and even as the government extends the deadline with regards to phasing out old notes, pain occurs among Nigerians
According to a report titled “The Global Findex Database 2021: Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19” about 64 million of its nearly 200 million Nigerians still do not have an account with a financial institution or mobile money platform. Although, the number of Nigerians with accounts at regulated institutions such as a bank, credit union, microfinance institution, post office, or mobile money service provider increased by 16 per cent to 45 per cent in 2021, still the number of the unbanked remained high.
Another report showed that N2.72 trillion out of the $3.26 trillion in circulation as of June 2022 was outside the vaults of commercial banks across the country, and supposedly held by members of the public. This statistic shows that 84.71 per cent of the currency in circulation are outside the vaults of commercial banks, with only 15.29 per cent in the Central Bank and commercial banks’ vaults.
Still another report said that at least 500 incidents of kidnaping were recorded and 3,420 people were abducted across Nigeria, with 564 others killed in violence associated with abductions in a one-year period. The security report notes that N6.531 billion ($9.9 million) was demanded in ransom in the year but N653.7 million ($1.2 million) was paid as ransom for the release of captives. The report, ‘The Economics of Nigeria’s Kidnap Industry’, conducted by SBM Intelligence and published in August, detailed the country’s security issues, including incidents of banditry and the costs associated with kidnaping for ransom.
In other words, government’s commitment at phasing out old naira notes will continue to cause pains, with so many people wanting to get new notes due to the amount of money with kidnappers, the colossal number of the unbanked, and billions outside the Central and commercial banks.
In December, the CBN said it had withdrawn more than one trillion naira out of the N3.23tn from circulation since the launch of new naira notes in a bid to move cash back into the banking system. In hard terms, Nigerians still hold over two trillion naira outside the banking system.
Unfortunately, over 60 per cent of rural communities in Nigeria does not have a bank branch, agent, or automated teller machine, with women less likely to be financially included than men. For example, while 71 per cent of urban adults have bank accounts, only 40 per cent of those in rural areas have a formal account. More than 60 per cent of rural communities surveyed don’t have a bank branch, agent or ATM. In addition, women are less likely to be financially included than men. While 57 per cent of men in Nigeria have a financial account, only 45 per cent of women do. Women living in rural areas are even less likely to be financially included.
The International Monetary Fund (IMF) said that Nigeria’s banks closed 234 branches and 649 Automated Teller Machines (ATM) in 2020, leading to a decline in the country’s Financial Access Score (FAS) to 4.44 in the year against 4.78 in 2019. The Fund disclosed this in its Financial Access Survey 2021 Trends and Developments. The Fund uses two indicators, the number of commercial bank branches per 100,000 adults and the number of ATMs per 100, 000 adults. According to the report, Nigeria recorded declines in these two critical indicators and 12 other indicators among the 64 indicators measured by the FAS. This was caused by the decline in the number of commercial bank branches in Nigeria from 5, 392 in 2019 to 5, 158 in 2020. In the same manner the number of ATMs per 100, 000 adults made it possible for the country’s financial access score to drop from 17.19 in 2019 to 16.14 in 2020. The actual number of ATMs declined from 19, 459 in 2019 to 17.19 in 2020
With the decline in the number of commercial banks in the country, as well as their shortage in rural areas, plus the dearth of ATM machines, millions of people face suffering, if the federal government doesn’t give a sufficient time for many to change their old notes to new ones.
Stakeholders have asked the CBN to extend its deadline for the phasing out of the old N1,000, N500 and N200 notes from January 31 to June 30, 2023. They urged the Central Bank to review the February 10 deadline upwards noting that “up till now, so many people haven’t seen the new naira notes. Whether the Central Bank will heed to the suggestion is another matter altogether.
