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Service downtime deepens consumer woes as Internet banking fails

By Adeyemi Adepetun (Lagos), Azimazi Momoh Jimoh and Collins Olayinka (Abuja)
02 February 2023   |   4:17 am
First day into the extended 10 days granted by the Central Bank of Nigeria (CBN) for old N200, N500 and N1,000 notes to be swapped for new ones, the cash squeeze continued across the country, yesterday, as millions of Nigerians struggled to complete transactions for goods and services.

Residents of the Federal Capital Territory (FCT) at a bank in Abuja…yesterday. PHOTO: PHILIP OJISUA

• PoS merchants fleece customers via high charges
• Bank gets N30m new notes for 200 branches, ration currency
• Don’t grant further extension, Atiku tells CBN
• ‘Moody’s downgrade, note scarcity may hurt economy’

First day into the extended 10 days granted by the Central Bank of Nigeria (CBN) for old N200, N500 and N1,000 notes to be swapped for new ones, the cash squeeze continued across the country, yesterday, as millions of Nigerians struggled to complete transactions for goods and services.

The scarcity of cash, both old and new notes, is further compounded by service downtime consumers are experiencing on Internet banking, Automated Teller Machines (ATMs) and Point of Sales (PoS) terminals.

These challenges, especially access to cash over the counter, ATMs and PoS, yesterday, further took a downward trend as banks failed to give out cash to customers. This is even as various ATM terminals visited were not dispensing cash, while those dispensing minimally had huge crowd to contend with.

It is the same story of anger and pain at the PoS outlets as operators lament inability to get cash. However, PoS merchants with cash charged between N1,500 and N2000 for N10,000 withdrawals, as against usual going rate of N200, which was later hiked to 10 per cent in the wake of the cash squeeze.

Others even slashed the amount customers intended to withdraw. For instance, within Ajao Estate, a suburb of Lagos, PoS merchants were only able to give out N5,000 maximum to customers, who wanted N10,000 or more and would still charge as much as N800 to N1,000 for the withdrawal.

They complained bitterly of their inability to get cash from banks and ATMs, adding that the CBN naira swap policy has impacted them negatively.

But the banks have taken the blame to the doorstep of the apex bank. Yesterday, in one of the new generation banks at Airport Road, Lagos, a senior bank executive said their bank only got N30 million new notes for about 200 branches spread across the country.

The bank chief lamented that if nothing is done urgently to remedy the situation, “it will be hard to contain the anger of consumers any time soon. At this branch now, no over the counter withdrawal and the little cash inside the ATMs have been exhausted.”

Still talking, the bank executive said online platforms of the bank have been overstretched, resulting in series of failed transactions.

Indeed, Nigerians have continued to express anger through all platforms, including the social media with the hashtag #NoFuel, #NoCash trending on Twitter yesterday.

THE inability of Nigerians to access cash have forced many to go online, which was actually the target of the apex bank. However, unprecedented rise in volumes of online transactions in the last few days has put serious pressure on the network.

It was gathered that because of the pressure, one of the leading banks, was reported to have disabled its online app on Tuesday, which resulted in the inability of hundreds of thousands of its customers to carry out transactions in the last two days.

A senior bank executive, who spoke anonymously, admitted that there are challenges within the banking sector, stressing that the CBN policy has further compounded the issue.

“To be frank, the new notes are yet to circulate and as people bring in their old notes, they want to walk away with new notes, which are currently inadequate. We had to ration it. For instance, if you bring in N50,000 and you want to go with new notes of N50,000, we can only give you N20,000.

This also means that if you come to change N5,000 old notes to new one, we may give N2,000 and ask you to come back. We know it is a challenge, but that is how we can manage the situation for now.”

Speaking on his experience, David Adeoye, a PoS merchant at Oyingbo Market, Lagos, said with the new policy and network disruptions, he did not think he could still continue with the business.

“When PoS started, a lot of banks used it to support us; I have four PoS machines from four banks, but I had to dump three because I do not get instant alerts on transactions done.

“For instance, if I have 10 customers buy from me and make payment with PoS, their money will not come on that day until the next day. When it eventually comes, it will be difficult for me to know who paid what because it will all come in bulk.”

On his part, Uche Chukwudi, another operator, said several times, money had been wrongly deducted from her account through PoS. “When you go to your bank to lodge complaints, the bank will tell you there is an intermediary that is looking into it. Sometimes, it takes weeks to get back your money,” she said.

IN Abuja, the situation is gradually crippling commercial activities in the Federal Capital Territory (FCT).

At the Federal Secretariat where many ministries are located, most ATMs are not functioning, while two that were paying yesterday were bombarded by workers.

The Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said service downtime usually results from damage to telecoms infrastructure, stressing that this happens in both urban and rural areas.

Adebayo said something decisive should be done to protect infrastructure, adding: “We shall continue to have some pockets of disruptions. We understand the period we are in and I am sure that operators are working to guarantee improved service.

“But we appeal to the public to help us too in protecting these infrastructures that are spread across the country, that we rely on to expand and improve services.”

MEANWHILE, presidential candidate of the Peoples Democratic Party (PDP), Atiku Abubakar, has warned CBN against further extension of the February 10 deadline. The former Vice President, in a statement he personally signed, alerted that some forces opposed to the conduct of free and fair election were ganging up against CBN.

“The CBN should be wary of the elite whose motive for crying out more about postponement of the deadline for the tenure of the old naira notes is sinister and far from being altruistic. I am totally in support of building a cashless economy and reducing the amount of cash in our economy,” Atiku stated.

In his view, “the anti-democratic elements who are pretending to be democrats are the ones ganging up against CBN because of the currency redesigning and the cashless regime it seeks to enthrone. They have been scheming and lobbying day and night to frustrate the policy. Now, their new measure is to lobby for a second postponement of the deadline for the change of currency. I urge CBN and government to ignore their antics. The CBN should not succumb to the current pressure.

“There should be no further postponement of the new naira regime after the expiration of the February 10 deadline. The vote riggers are seeking to push the CBN to extend till after the election when they would have achieved their evil plots. CBN and the Presidency should be steadfast. The merits of the new naira policy far outweigh the little inconvenience we are experiencing,” he noted.

The Chief Executive Officer of Dairy Hills Limited, Kelvin Emmanuel, decried the scarcity of naira notes, explaining that it could be as damaging as Moody’s downgrading of the Nigerian economy to Caa1 from B3 status.

“The recent downgrade to Caa1 from B3 by Moody’s following the watch the Nigerian sovereign rating was placed on in October 2022, is proof that we are in a full-blown crisis.”

He warned that the downgrade would push bond yield spreads above 20 per cent and make it unsustainable for the government to raise recurrent debt expenditure through government bonds, leaving them to Ways and Means facility and bilateral/multilateral sources.

According to him, Nigeria’s Sovereign Rating is officially ranked ‘junk’.