Naira Scarcity Crippling SMEs, Financial Operations as Banks Battle Public Backlash
If the Central Bank of Nigeria (CBN) had known that redesigning the N1000, N500 and N200 notes could threaten the economy of the nation as it appears, maybe it would have had a second thought or plan the policy better.
Since the redesign policy came to operation, it has been a litany of woes, not only to the financial institutions in the nation, but to the Small and Medium Scale Enterprises and Businesses.
Checks by Investors King showed that since the scarcity of Naira notes has bedeviled the country, average Nigerians who have accounts at various commercial banks have been left frustrated while some who appeared to have been pushed to the wall, have launched attacks on some banks in some parts of the country.
In Ibadan, some angry bank customers attacked some banks and destroyed Automated Teller Machines (ATMs), vehicles owned by bankers and customers alike because of the inability of the banks to release cash to them.
Notwithstanding the threat of sanctions by the nation’s apex bank, cases of alleged naira hoarding has not abated across the country as revelations of bank managers allegedly hoarding new notes have been hitting the public in torrents.
Officials of CBN had exposed some culpable bank officials and warned them against unethical practices. Also, operatives of the Economic and Financial Commission (EFCC) and Independent Corrupt Practices and Other Related Offences Commission (ICPC) have arrested some bank managers and other principal officers in some parts of the country for allegedly hoarding tye redesigned notes.
Nonetheless, the nation still battles cash scarcity as banks continue to witness crowd of customers who make frantic efforts, even to the point of fighting and engaging in chaos, to withdraw their money.
Apprehensive of customers’ wrath, Investors King gathered that banks’ officials have now improvised a new way of leaving the bank premises without being noticed by angry customers who have refused to the financial institutions environments even after close of work.
In Asaba, Delta State, some bank workers were seen scaling through fence when they could not make cash available for customers who had already been held stranded at the entrance.
While some Nigerians have accused Point of Sales operators of extorting them whenever they want to transact, the operators have justified their acts of increasing their charges.
Operators now charge between N500 and N1000 for N5,000 withdrawal across the country.
Some of the operators who confided in Investors King claimed that they had to pay or in some cases buy the new notes from banks officials, citing these as reasons for the increased charges.
Others said they had to tip some Nigerians to get the money in their through ATMs before they could get money to do business with.
A POS operator who simply identified himself as Adex said, “people should not blame us much because since this naira scarcity started, we go through a lot to get cash to do business with. Sometimes, I have to get my friends’ ATM cards so that I can withdraw the sum of N20000 which is the daily limit of withdraw in order to have enough cash to do business with.
“There is no way I will get ATM cards of people and borrow their money for business that I won’t give them some amount of money. So, the charges that we are collecting are part of the means of settling those whom we have already given tips. My other colleagues have to buy the naira from some bankers before they could work. Those who can’t go through all these things have closed their businesses,” he said.
As a result of failure to get cash, no fewer than 50 per cent of PoS operators have closed their shops.
The National Chief Aggregating Officer of the Association of Mobile Money and Bank Agents in Nigeria, Hussein Olanrewaju, stated that the impact of the ongoing shortage of new and old naira notes had worsened the conditions of their members.
Hussein noted that the ongoing policy meant to swap cash in unbanked areas might not achieve its mandate due to the low number of agents selected for the scheme.
He added that including more agents remained the best solution to easing the financial stress Nigerians were currently facing.
Meanwhile, proferring a headway to the crisis,, Vice President Yemi Osinbajo called on major players in the FinTech space wade in.
Some Civil Societies Coalition and Peoples Advocates have called on President Muhammadu Buhari and the Central Bank of Nigeria to be sensitive to the plights of citizens and arrest the ugly trend.
In their separate interviews, the leaders of the civil societies threatened to mobilise Nigerians in nationwide protest against scarcity of Naira as they lamented that small businesses were already shutting down.
The chairman of Osun Civil Societies Coalition, Waheed Lawal and the Publicity Secretary of Peoples Advocates, Emmanuel Olowu, decried the current hardship Nigerians are battling and informed Buhari that the nation is falling apart under his administration and that if nothing urgent was done to arrest the torturous situation, they would mobilise mass protest in the state.
Lawal said, “While we are not questioning the sincerity of the Federal Government on the financial policy, we are constrained to give volume to the murmuring, groaning and cries of Nigerians who have been badly hit by the economic dragon. Considering the pains being experienced by the common men in getting cash for their livelihood, it would not be out of place to declare that the President Muhammadu Buhari-led Federal Government is inconsiderate and insensitive to the plight of the citizens.
“The Central Bank of Nigeria led by Mr Godwin Emefiele has clearly been playing hide-and-seek game on the circulation of the new naira notes. We acknowledged the fact that there are saboteurs among the top echelon of the banking industries, but the CBN has not also released enough amount of the redesigned denominations to banks through which they can be disbursed to the generality of people. This is responsible for the ridiculous amount of cash being paid to the people over the counter.”
According to Olowu, the redesigning of the naira has turned to unjust punishment for Nigerians, adding that many small scale businesses have collapsed due to cash scarcity.
“Economically, the scarcity of cash has crippled many businesses and further push millions of Nigerians far below the poverty line. Petty traders do no longer make sales because of cash transaction which their trading depends upon. We make bold to say that this financial policy of the Federal Government is doing more harm than good presently. There should have been another way round to maintain a balance between cash control and the wellbeing of the people,” he said.
Osinbajo Lauds China on Loans Offered to Africans, Repayment System
Nigeria’s Vice President, Prof. Yemi Osinbajo has commended the Chinese government for the loans given to African countries and its repayment system.
According to Osinbajo, the Chinese loans have reduced the reliance of Africans on international financial institutions like the World Bank, and International Monetary Fund amongst others.
He stated these at King’s College, London on March 27, 2023 while delivering a public lecture on ‘China’s Investment in Africa, Investors King reports.
The Vice President lauded China for constantly meeting the needs of African countries which has reduced the burden on the western institutions.
He further mentioned that the loan servicing system was made easy to aid the African economies, especially during the Covid-19 Pandemic in 2020.
Through its Debt Service Suspension Initiative (DSSI), China offered 73 low income economies suspension of principal and interest payments.
“Chinese banks provided 63% of the total debt relief while being only owed 30% of the debt service payments due,” Osinbajo noted.
The VP pointed out that China is the largest provider of foreign direct investment which provides jobs for hundreds of thousands of Africans.
On Chinese investment in Africa, Osinbajo stated that $254 billion was disbursed in 2021 which was calculated as four times the volume of US-Africa trade.
“China remains by far the largest lender to African countries. Chinese companies have also taken the lead in exploiting minerals in Africa, many now in lithium mining in Mali, Ghana, Nigeria, DRC, Zimbabwe and Namibia. Most African countries are rightly unapologetic about their close ties with China. China shows up where and when the west will not or are reluctant.
“And many African countries are of the view that the ‘beware of the Chinese Trojan loans’ advice from the west is wise but probably self serving. Africa needs the loans and the infrastructure. And China offers them.”
“All of Chinese lending to Africa is only 5% of all outstanding public and publicly guaranteed debt in low and middle income countries, compared to 23% held by the World Bank and other multilaterals. Chinese lenders account for 12 per cent of Africa’s private and public external debt,” the vice president stated.
FirstBank Announces a Name Change of its Subsidiaries, Reiterates its Commitment to Boosting Cross-border Payments
First Bank of Nigeria Limited, Nigeria’s premier financial services institution, has announced a phased corporate name change of its subsidiaries in the United Kingdom and Sub-Saharan Africa.
FBNBank UK, FBNBank Sierra Leone, FBNBank Gambia and FBNBank DRC are the first set of subsidiaries effecting the name alignment. They are now known and addressed as FirstBank UK, FirstBank Sierra Leone, FirstBank Gambia and FirstBank DRC. The Ghana, Senegal and Guinea subsidiaries will be next in the phased name change implementation.
The name change is being implemented to align the subsidiaries with the parent brand and to enjoy the strong heritage and brand equity built by FirstBank Nigeria in its 129 years of banking leadership. This will further enhance the quality-of-service delivery resulting in better brand clarity, uniformity and consistency across all the markets where the Bank operates.
A leading financial inclusion services provider, FirstBank Group is committed to its nation-building goal. It has taken giant performance strides on its unique growth trajectory as it continues to build distinctive capabilities through partnerships and the constant drive to reinvent itself.
This performance is evidenced in the numerous awards and recognitions bestowed on the institution. These awards include Best Private Bank for Sustainable Investing in Africa 2023 by Global Finance Awards; Best Corporate Bank in Western Africa 2022 by Global Banking; Finance; Best CSR Bank Africa by International Business Magazine in 2022; and ranked as number one in Nigeria in terms of Overall Performance; Profitability; Efficiency and Return o Risk by the Top 100 African Bank Rankings 2022 released by The Banker Magazine from the stables of Financial Times.
In addition, in Euromoney Market Leaders, an independent global assessment of the leading financial service providers conducted by Euromoney Institutional Investor Plc., the Bank was crowned: Market Leader in Corporate and Social Responsibility (CSR); Market Leader in Environmental, Social and Governance (ESG); Highly Regarded in Corporate Banking and Digital Solutions and Notable: in SME Banking.
Speaking on the name change, Dr. Adesola Adeduntan, CEO of FirstBank Group, said ” the name change which coincides with FirstBank’s 129th founding anniversary (March 31 st , 2023) is indeed a milestone reflective of our resolve to continuously provide the gold standard of excellence and value as we put our customers First. The new identity of the subsidiaries contributes to an enhanced brand presence. It helps our customers and stakeholders better appreciate the value of the diversified products suites, competitive pricing and extensive business networks the FirstBank Group offers. These include our commitment to boosting cross-border businesses including trade and investment opportunities essential to enhancing trade relations amongst countries, thereby strengthening the economies of host communities and reducing poverty,” he concluded.
First Bank Denies Forgery Allegation in Face of Legal Battle with Loan Defaulter
First Bank of Nigeria Limited has issued a denial against the forgery allegation made by Francis Chukwumah Nwufor, the owner of Whiteplains British School.
In the lawsuit marked CR/266/2023, the federal ministry of justice had accused the bank of forging a “tripartite legal mortgage without the consent of Mr Francis Chukwumah Nwufor, with intent to commit fraud.”
In an official statement, First Bank described the accusation as a spurious allegation made by a delinquent debtor, which is aimed at tainting the bank’s loan recovery efforts and legal enforcement of its security collateral interest in line with the terms of the loan.
The bank emphasized that it operates by the highest standards of ethical conduct and will under no circumstances involve itself in any act of illegality. It further assured its numerous customers, stakeholders, and the general public that it remains focused on its mission of providing the best financial services.
The case has been adjourned until May 8th, as the prosecution lawyer stated that all the defendants had yet to be served with the charge.
It is common for loan defaulters to resort to legal battles with banks and this case is no different. However, it is important for both parties to ensure that the matter is handled in a transparent and legal manner.
First Bank’s denial of the allegation is a clear indication that it is standing firm against any attempt by recalcitrant debtors to fritter away depositors’ funds under its custody. The bank’s focus on its mission of providing the best financial services to its numerous customers is commendable and should be the guiding principle for all financial institutions.
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