Nigeria’s Holiday Season Sees Adjusted Spending Due to Cash Flow Challenges.
Christmas and end of year celebrations is coming on a low key this year as the high cost of living worsened by the unavailability of cash impacted the ability of many to embark on lavish spending, LEADERSHIP learnt.
Inflation, which was at 21.82 per cent, at the beginning of the year, has so far risen to 28.2 per cent as at November this year, an indication that the rate at which prices of goods and services are rising is faster than it used to. The situation for many is worsened by the lack of cash in the system as banks were unable to give out cash to their customers and ATMs across the country remained dry a few days to Christmas.
A visit by LEADERSHIP to some banking halls on Friday, the last working day before Christmas, showed that banks were not dispensing cash with those dispensing giving out between a maximum of N20,000 and N5,000 to their customers.
The few ATMs that were dispensing limited the ability to withdraw more than N20,000 whilst some dispensed up to N40,000. Banks had earlier limited daily withdrawal limits to N40,000 to stem the demand for cash.
A shopper at the Balogun Market on Lagos Island said she was not sure she would be able to buy new Christmas outfit for her kids and the celebration would have to be low key as everything has become so expensive. “Everything is so expensive and even when you want to struggle and buy, the traders are refusing to accept bank transfers. I have been going from ATM to ATM to get cash but I cant get enough to pay for what I want to buy. I also cannot afford to pay the high charges that POS operators are charging. It is looking like I will go back home,” she lamented whilst on a queue at the ATM,” she said.
A retired teacher and a septuagenarian, Mrs Salako said she had to beg the bank manager that she needed to buy foodstuff before she could get N5,000 cash which she said was paid in dirty N100 notes. “It is still better than paying money to collect my money and not having cash at all” she said.
Yemisi Salaudeen said she concluded her Christmas shopping in November, as procrastination until the peak period when prices skyrocket is not a viable alternative due to the alarming escalation of food costs. Furthermore, cash accessibility presents a hurdle, given the constraints on withdrawal limits,” she noted.
The lack of cash had worsened the rising the cost of items as many seek alternatives to the traditional celebrations. John a clothes trader at the Katangora market in Abule Egba area of Lagos popular for used imported clothes, noted that there are more people visiting the market. “To buy new materials and sow is very expensive and new imported clothes are also expensive so people find alternative in cheaper used clothes,” he said.
With food inflation rising to 32.84 per cent in November from 31.52 per cent in October, many Nigerians are also facing a hard time celebrating the year end festivities in grand style. The chicken which is a major player during this season has risen above N20,000. Also, the price of beef had risen form N2,800 a month ago to N3,300 per kilo.
In October, George Oluwaseun, a civil servant, disclosed that she bought just over N15,000 for ten chocolate beverages which currently sold between N17,500 and N18,000. A five-litre container of groundnut oil used to cost N7,500 but now ranges from N9,000 to N10,000.
A derica of beans previously sold for between N500 and N600 are now being sold at prices ranging from as high as N800. The price of good rice fluctuates; it can cost anywhere from between N55,000 to N80,000 depending on the vendor. A crate of egg that once sold at N2,200 eggs is presently valued somewhere in the range of about N3000 and N3,200.
A carton of soap sold for only about N6,000, is now sold for N8,400 or even up to N8,000 nowadays. Even toothpaste brands price that is just around N500 and N600 can be found retailing at prices ranging from a minimum of about N800 to N1000.
At a barbershop, the barber explained the extent to which he went to get cheaper rice.
He said, “rice is expensive these days. A bag is sold for between N60,000 and N75,000. A few days ago, we went as far as the border in Idiroko, Ogun State, to buy good rice. Our budget for a half bag of rice is N16,000.
We went there and ended up buying it for N28,000. This shows that our government want to kill us. Half a bag of rice, N28,000? Jesus, na your hand, we dey o.
And the surprising thing is that nobody is talking again. Nigeria is dormant, and the few people who are talking, they have used money to blind them from speaking the truth.”
Grace Margaret said a crate of tomatoes now costs her N8,000 compared to last year’s N5,000. Unfortunately, this trend continues each year with no signs of abating. The people who are in the food business are the ones suffering most from this. They buy pepper, they buy condiments to prepare the food, and after selling, they do not make their money back.
The Centre for Anti-Corruption and Open Leadership (CACOL) had decried the current Naira scarcity being witnessed in various parts of the country. CACOL’s director of Administration and Programmes, Tola Oresanwo on behalf of the anti-graft organisation’s chairman, Debo Adeniran in a statement said: “We have observed that barely a year after the Central Bank of Nigeria Naira redesign that ended up as a colossal fiasco and subjected our people to untold hardships, Naira scarcity has resurfaced in the country.
“It was reported that since last month, banks started imposing daily individual withdrawal limits of between N20,000 to N40,000 which was mainly due to the shortage of cash in their vaults. Although the Central Bank has tried to assuage the apprehension of the people by repeatedly assuring the people that it had supplied the banks with enough cash but the situation is yet to improve.
“As we speak now, you cannot withdraw more than N10,000 in some banks, this is not a good time for this anomaly as we are approaching the festive season when majority of our people who rely on cash transactions would likely demand for more cash to facilitate their various transactions.
“The federal government and the Central Bank of Nigeria should critically look into what may have been responsible for the current Naira scarcity and nip it in the bud as soon as possible. It is a known fact that the mobile and online transactions are still plagued with numerous challenges that makes some Nigerians not to adopt it. The fact that a vast majority of the people in the hinterlands who don’t have access to the internet and or electricity may only find solace in cash transactions is another factor why we cannot afford to subject them to another round of wild goose chase of a commodity that ought to be readily available whenever it is needed.”
The chairman of Union Bank, Farouk Gumel, speaking recently in an event organised by Singapore-based NTU-Centre, themed “Back to Growth: Priority Agenda for the Economic Revitalisation of Nigeria,” disclosed that, inefficiency in the transportation system of the country is a major cause of food inflation, saying “When there is a good transportation system and a good road network, the high food inflation rate will come down.”
