Rural communities and internally displaced persons (IDPs) camps are hard hit by the Central Bank of Nigeria-induced cash crunch, with many Nigerians protesting the situation.
According to World Bank data, there are 100.840 million people in the rural areas of the country, representing 47 percent of the country’s total population.
Francis Emmanuel is a point-of-sale (POS) machine operator in Saura, Nassarawa State, and one of the persons living in the country’s rural areas. Before the Central Bank of Nigeria (CBN) announced the redesign of the naira, his POS machine had been the hope of several people who needed money due to the location of commercial banks in faraway Keffi, Nassarawa State capital.
But Emmanuel now has to seek cash for himself and his customers. To get to the nearest commercial bank in Keffi, he spends over 30 minutes on his motorbike, thanks to the poor state of roads connecting Saura to Keffi.
The people in the community usually feel some relief upon the return of Francis from Commercial banks; at least, they hope to withdraw.
Emmanuel told Dataphyte that he had stopped his POS business due to his inability to access the new naira notes and because he was only allowed to withdraw N5000 from one of Nigeria’s commercial banks.
Residents of the community who primarily relied on him for cash cannot get it, he said.
“Our community is far from banks because you need to get to Keffi to access them. Even this POS machine that gave people some succor in the past cannot function again. This is what we manage despite network challenges we face, but we do not even have much to manage again,” he noted.
In Saka, an area in Nassarawa State, the situation is the same, as residents told Dataphyte that lack of access to banks and poor internet connectivity had continued to deny them access to financial services, making it hard for them to survive.
The challenge of Saka residents is worsened by bad road network and the distance to the nearest town, Keffi.
The situation is not different in Awala, Osun State. To access commercial banks, residents have to embark on over one-hour journey to Apomu, from where they can access commercial banks.
Aresident of Awala, Omotola Adetayo, told Dataphyte that the absence of commercial banks had remained a crucial issue and the poor internet connectivity in the Village meant that POS machines were not fully effective.
“From Awala, you need to take a vehicle to Apomu, and that is over one hour, before then boarding another vehicle to the bank location in Apomu,” Omotola told Dataphyte.
Due to this development, businesses have stalled, and the new redesign policy of the CBN also has affected traders in the village.
The village’s POS machine operators have also been unable to render financial services due to a lack of cash, Dataphyte understands.
IDPs hurting
The IDPs are also affected by the crisis, as they cannot access financial services, Dataphyte understands.
The Executive Director of Evergreen Initiative, Alibob Cinwon, shared with Dataphyte the experiences of IDPs who could not eat due to lack of access to money and being cut away from financial services.
He stated that the POS machines, which should serve as cushions, were not functioning.
“I am just returning from the new Kuchingoro IDP camp, which is very worrisome. These persons cannot even feed themselves nor transact because POS machines that used to be of succour to them no longer work due to the absence of cash. The people living in the IDP camps do as little as N200, N300 transactions just to feed and survive – just for you to understand their plight.”
He opined that the CBN failed to factor in various groups, including the IDPs who were victims of conflicts, in its policy formulation.
An IDP advocate, khadeejat Shuaib, said that the situation was worrisome as IDPs hardly survived due to the absence of cash. She noted that getting support for them was becoming more difficult as the little money they (IDPs) had could not be spent because they did not have access to new notes or financial services.
“It has become emotionally draining for IDPs because they are finding it hard to survive. No one is paying attention to their own plight. They barely have N1000, so they dont even have access to banks or financial services, or even the support that usually comes because of the inability to transact,” she stated
Data from Statista show that there were 2.730 million displaced Nigerians as at 2020, most of whom were victims of insurgency and other violence in the countr
What data say
The Enhancing Financial Innovation and Access (EFInA) study, a UK’s Foreign Commonwealth & Development Office-supported programme, noted that only one-thirds of rural areas was banked.
The report stated that only 38 percnt of adults in rural areas in Nigeria were within proximity of financial access points or financial service providers. About 84 percent of these adults are within proximity of financial access points and rely on financial service agents, and only 4 percent of this number rely on bank branches.
In North-West Nigeria, only 16 percent of the population is banked, according to the survey, while 50 percent of the crisis-ridden North-East Nigeria is excluded from financial services.
The EFInA report stated that there were 38 million financially-excluded adults in Nigeria’s rural areas, with 43 percent of this number in the North-West region of Nigeria.
The World Bank’s most recent data noted that there were 4.3 banks for every 100,000 adults in Nigeria.
The report also stated that there were 16.15 automated teller machines for every 100,000 adults in the country.
Data published by the Global System for Mobile Communications also noted that 63 percent of Nigerians living in rural areas were unconnected.
The internet penetration of the country also stood at 55.4 percent of the total population in 2023, according to data sourced from Datareportal, meaning that 45.5 percent of the country’s population is not connected to the internet.
According to the Nigerian Communications Commission (NCC), broadband penetration in the country stood at 47.36 percent as of December 2022. This implies that 52.56 percent of the country’s geographical location lacks broadband penetration.
Expert Reacts
Apolicy analyst, Samuel Atiku, while weighing in on the development, noted that Nigeria’s apex bank should be prevailed upon to review the naira redesign policy.
He opined that the CBN was pushing Nigerians to alternate means of transactions, thereby defeating the transactional essence of the naira.
“It is essential to note that the essence of the naira in the first place is transactional. It becomes a problem if the people are allowed to look for other means of exchange other than the naira.”
Atiku also warned that Nigeria might be toeing the path of worrisome inflation if money would not be provided to aid supply and actual purchase of goods and services, stating that this might lead to further inflation and push more persons into poverty in the country.
The policy analyst asked that the CBN to rethink its poorly thought-out policy to ensure that the country did not suffer the ripple effects.
Buhari’s intervention
Meanwhile President Muhammadu Buhari has asked the CBN to re-circulate old N200 notes till April 10 to enable Nigerians heave a sigh of relief. He said this during his broadcast on Thursday morning, noting that he was concerned about the impact of the monetary policy. He said those in possession of old N500 and N1000 notes could return them to the CBN by April 10.