*Super markets, Shops Refuse Old Notes Ahead Of Deadline“GTB, Zenith Others Still Giving Out Old NotesBy John Omachonu
The twin effects of soaring inflation and rapidly falling value of the local currency have led to the emergence of a band of distressed consumers struggling for survival.Consequently, with low purchasing power and heightened anxiety on the deadline for the acceptability of the old notes, most consumers have reverted to the old habits of patronizing the smaller and neighborhood shops.Specifically, the price conscious Nigerians are returning to their old buying habits of even open markets for their daily needs as the economic downturn puts pressure on their stagnant incomes.
In the midst of all these and ahead of the January 31st deadline set by the Central Bank of Nigeria for the cessation of the circulation of old naira notes, shops, supermarkets, small businesses, and merchants have also started to reject the notes.This is even as branches of some deposit money banks like Zenith, GTBank were upto Thursday were still dispensing old notes over the counters to their customers.
For example, Cold stone creamy, a popular ice cream brand and some supermarkets have informed their numerous customers via social media platform Twitter that they will stop accepting old naira notes from January 27 and 25, 2023, respectively.
“Important notice‼‼. Following the Central Bank of Nigeria announcement on the redesigned Naira notes, Cold Stone Creamery NG will stop accepting the old naira notes (N200, N500, and N1000), effective from January 27th, 2023”
These happenings and changes have brought about sudden change in tastes of most consumers, due to inability to purchase desirable goods and services.The effect is the negative impact on high street retailers in the malls as they have been hard hit by dropping sales revenues forcing some of them to cut down on staff and outlets.The hard pressed consumers have shifted to informal stores because of the pocket-friendly prices they offer especially as the harsh economic realities continue to bite harder.
For retailers located in high prices and sometimes dollar “rent” malls grappling with foreign exchange shortages, they have now to compete with informal stores in markets such as Tejuosho, Balogun, Oshodi and other open stores which are luring customers away nationwide.Inflation in Africa’s largest economy climbed to all highs of 21.34 percent while monetary policy rate (MPR) now at 17.5 percent, with heightening multidimensional poverty at over 30 percent.Doors of credit facilities have equally been shut to small business owners whose default risks are considered to be higher, particularly in the growing volatile business environment.Specifically, the maximum lending rate in the banking sector hovers between 28 and 32 percent depending on the risk elements, while savings deposit rates are still at below 5 percent.In fact, CBN money market indicators on its website corroborated it with prime lending rate at 13.85 percent, while the inter-bank call rate was 12 percent.Not even the rates of fixed instruments favour small investors as Treasury Bills rate was 4.35 percent, one-month deposit rate was 8.15 percent, three months deposit rate was 8.68 percent, while 12 months deposit rate was 8.22 percent.According to some analysts, as long as macroeconomic fundamentals remain weak, the inflation outlook, and by implication, consumers’ confidence, will be up trendingThis is because consumers simply do not have the wherewithal to spend, as majority, who are civil servants are being owed salaries and pension arrears.
The argument of some analysts is that rising inflation would make investors demand higher yields to buy government bonds.
Some of the businesses justify their action of rejecting the old notes ahead of time to allow them time to deposit all their old notes before the January 31st deadline.
However, CBN governor Godwin Emefiele, at the last post MPC meeting briefing said that the 90-day window given by the CBN for Nigerians to deposit their old currencies was enough.
“We called on the deposit money banks (DMBs) to extend their working hours, and to work on weekends,” he said. “There is no reason to talk about a shift. The new currencies are available.”
ALSO READ:NASS Calls On NUC To Shut Down Universities, Others For General Elections
Emefiele said the CBN had mandated commercial banks to feed the new notes into their automated teller machines (ATMs) for Nigerians to have equal access.
“We have increased disbursement of the new notes to them. There is an adequate quantity of new notes available. Our mint is producing and we are supplying the banks,” the governor said. “We have super agents in underserved areas like riverine communities, and CBN staff members have been out on mobilisation. We believe that by January 31, the new naira notes would have permeated the nooks and crannies of the country,” he said.
The analysts say CBN should match its request or directive on banks with still sanction, without which the banks would continue to sabotage the policy.
Leave a Reply