About two weeks after the Supreme Court voided the wholesale brutal implementation of the cashless policy of the Federal Government and its attempt to set the limit of cash a bank customer could withdraw from his or her account, LUCAS AJANAKU reports that individuals, small businesses and vulnerable members of the society are counting their losses.
Madam Bona runs a small scale retail and wholesale business in Abesan Estate, Ipaja, Lagos. Things have been tough for everyone in the country over the last one year but life continued. Like others, she continued to hope until her husband died last year. After the burial, she returned to Lagos in January to confront the harsh reality of life imposed by the forceful implementation of the cashless policy.
Faced with an existential threat without cash to even feed her four children, she started accepting cash transfers through her Ecobank account. Then the unexpected started happening. “I have lost about N200,000 to the cashless policy because some people say they transferred cash to me for goods bought. At their end, they get debited but at my end, I didn’t get credited.
“When I try to use my banking app to check, sometimes the thing just rolls, rolls and rolls without connecting. I then got a book in which I write customers’ names, numbers and cash transfers hoping to check through very early in the morning. The situation remained the same. No cash credited. Some of the customers will ask me to go and check with my bank. At my age, I don’t have the strength to wake up at 5am to pick a tally number so I could enter the banking hall to complain,” she lamented.
Eighty four-year old Pa Ajayi Bamidele is a retiree. With old age had come all manners of health challenges. But Engineer, as he is fondly called, has a major health problem. He spends between N30,000 and N40,000 monthly to buy drugs and other things. A widower, during his active years, he had saved money in the bank in the hope that he could withdraw the cash for his upkeep to augment whatever might come from his children in his old age.
He said: “I was born in 1939 and I am treating prostate. I buy two drugs: Contiflow XL and Azodart every month on the recommendation of the doctor to treat myself. Now, this cashless policy has dealt a terrible blow to me. The other time, I managed to go to the bank and ask for N10,000. The teller looked at my age and gave me N4,000 in N20 notes. Now, I am unable to get money to run my life. In other countries of the world, a senior citizen like me will not be going to queue in the bank and beg for the money I saved with the bank.”
He said he had never seen anything like this in his life, adding that even during the civil war, the federal side had their currency while Biafra had theirs too. Life, he said, went normal.
He asked rhetorically: “How can I have money in my bank account yet starve to death?”
Iya Eni is a food seller within the neighbourhood. A widow with two grown up kids that are in the university, she supports herself and the children with proceeds from what she sells. Like a thunderbolt, the cashless policy came. Initially, she was accepting transfers but when she could not withdraw cash from either the banks or point of sale (PoS) operators, she closed shop.
Hear her: “I sell food for students every morning. People in the neighbourhood also patronise me. But the cashless policy was introduced and people no longer had cash to pay. For two weeks or so, I struggled; accepting transfer but suddenly, things became more terrible. There was no cash at all. The PoS operators that were initially accepting N1,000 for N10,000 too ran out of cash. And I cannot go to Oke Odo Market in Abule Egba without cash. The Hausa sellers of pepper and tomatoes do not have bank accounts let alone accept transfer. So, that was how the government killed my business and dream. To feed and support my kids now is a Herculean task.”
Like Iya Eni, Madam Esther recalled her experience at the popular Oke Odo foodstuff market over the weekend. According to her, the Mallams no longer accept cash transfers. They say when the trucks bring in goods from the northern parts of the country, they insist on payment with cash. This development has affected sales because people don’t have cash and the sellers are not prepared to accept bank transfers.
She said: “The Mallams complained that they don’t have bank accounts. Those that have said they have money in their accounts which they are unable to access because of a strange punitive economic policy from the Central Bank of Nigeria (CBN).”
One of the sellers who identified himself simply as Abubakar lamented that he has suffered colossal losses to the policy. Pointing at several baskets of rotten tomatoes and pepper, he said it cost him several millions of naira.
“I don’t know why baba is punishing us. Baba will be remembered more for these needless hardships than his good intentions. It is very sad that this is happening. People are hungry not because they don’t have money but because baba deceived them to bring their money to the bank and baba locked the money up,” he said through an interpreter.
The few shop owners that have PoS added transactions cost with charges ranging from between N200 on every N1000 transferred to N300.
Anti Hadija who sells foodstuffs said she accepts transfer, adding however that she would need to buy cash for transport home. A PoS operator in the market that gets cash from who knows charges N6000 for N20,000.
According to her, rural farmers were worst hit as they are unable to get cash to live their lives. “Farmers have been calling me to come with any amount of cash to come and carry foodstuffs. Corn is ready, dried plantain and yams used as powder for elubo (a local delicacy common with the Yoruba people) are ready. They need cash to run their local economies in the farms but since my cash is locked up by the CBN, I am unable to go and restock my shop,” Hadija said.
Avalanche of failed transactions
Complaints about hanging transactions have become very rampant. Bank customers that were forced to use alternative channels including electronic, have been licking their wounds.
Alhaji Yunus, a welder in the Ladipo, Oshodi area of Lagos, said he used his banking app to transfer N45,000 as payment for materials for him to start a contract. The transfer was done twice and he was debited. The client got one of the transactions while the other remained hanging in the air.
Another woman said she transferred N20,000 for payment of purchases and got debited. The shop owner didn’t get the credit alert.
In one of the banks visited, customers were locked out while the security men manning the iron gates gave them forms to fill essentially for failed transactions. No other banking services were available.
Strangely, the policy took the banking sector back to about two decades ago when customers would come to the bank with mats in their hands because they knew they were going to spend productive hours in a long queue. Bank customers in some parts of Lagos wake up as early as 5am to go to the bank and get a tally number.
Banks not prepared
Telecom operators on whose infrastructure the transactions, be it USSD or internet rode, said commercial banks were not prepared for the full blown cashless programme of the CBN. According to them, as a gateway, transactions that pass through their infrastructure go seamlessly but when they get to the banks’ server, they develop hiccups.
Acting under the aegis of the Association of Licensed Telecoms Companies of Nigeria (ALTON), they believe the success rate of e-transaction that has plummeted on account of the withdrawal of old notes without a concomitant increase in the supply of the new notes that has led to the use of e-payment channels has shown that the banks were ill-prepared for the programme in terms investment in requisite infrastructure.
Its Chairman, Gbenga Adebayo, who was reacting to the sharp decline in the success rate of electronic transactions in recent times, said the mobile network operators (MNOs’) infrastructure remained resilient adding that the failure was from the commercial banks side.
He said from the traffic report monitored on the transactions that pass through the network, the fault was not that of the MNOs. He said the operators only serve as a highway and have no control over what happens when the transactions get to the server of the banks.
“We think the banks are not prepared for this. The banks are overwhelmed,” Adebayo said, adding that if the problem was from the MNOs, people would not have been able to access the internet on their mobile devices.
In a separate interview, the President, Association of Telecoms Companies of Nigeria (ATCON), Ikechukwu Nnamani said the flip-flop service of electronic banking has nothing to do with the strength of current network infrastructure.
Nnamani who is the Chief Executive Officer of Medallion Communication Limited, said the inability of bank customers to make use of either the USSD or app is purely a fault of the banking platforms.
President, National Association of Telecoms Subscribers of (NATCOMS), Chief Deolu Ogunbanjo had blamed the development on pressure exerted on the network owing to the knee-jerk CBN’s cashless policy implementation. He said the current state of access to telecoms services is very poor because of the pressure on the network.
“Cashless is good because it is a global phenomenon but it must be implemented gradually. With the current state of infrastructure now, you will be lucky if you make 10 cash transfers and get alert for two. As a matter of fact, the success rate of electronic cash transfer since the problem started has slumped to between 20 and 25 per cent. The CBN should extend the timeline,” he had said.
Call for action
An ICT and infrastructure development company, PPC Limited, has advised financial institutions to strengthen their e-payment platforms.
Its Director of Operations/Head, ICT Division, Dr Patrick Ede, said the inadequacy of the e-payment channels to withstand the deluge of transactions as a result of the surge in the use of such channels for payment is causing many failed and unsuccessful transactions.
He added that the congestion and resultant system downtime are negatively affecting the commercial activities of merchants as transactions have become slow, delayed and sometimes incomplete due to the fact that the banks were never ready for the level of surge they are currently experiencing.
He called on banks to implement measures that will ensure all electronic payment channels can process simultaneously, quickly and efficiently.
Ede said: “The rising demand on the digital channels of banks calls for increased investment in reliable payment systems that speedily deliver on transactions.
“To alleviate the congestion on payment channels, banks should carry out an audit of payment channels to identify gaps and loopholes in the system with a view to phased resolution. This first step will ensure that banks raise the standards of experiences they provide to customers and ensure that customers remain at the centre of their business models.”
He urged banks to consider upgrading their server, network and hardware infrastructure to handle peak-time operations, adding that this move will ensure that all electronic payment channels can process transactions swiftly and efficiently.
Ede advised the financial institutions to enhance their security protocols to ensure that all electronic payment channels are secure, protect customer data and prevent fraud.
According to him, there may also be a need for financial institutions to expand their existing payment channels in order to accommodate more transactions.
PPC’s expertise in the deployment of high-end ICT and engineering infrastructure has assisted several organizations in the public and private sectors to create secure, robust and scalable systems suitable for a broad range of commercial uses.
The Supreme Court had on March 3 nullified the Federal Government’s cashless and naira redesign policy, declaring it as an affront to the 1999 Constitution.
It had also held that President Muhammadu Buhari breached the constitution in the manner he issued directives for the redesigning of the banknotes by the CBN, arguing that the unlawful use of executive powers by the president inflicted unprecedented economic hardship on the citizens by denying them ownership of, and access to, their money.
The court, in a unanimous judgment delivered by Justice Emmanuel Agim on behalf of the seven-member panel of Justices of the court, voided and set aside all the directives issued by President Buhari in respect of the naira redesign and circulation on the grounds of illegalities and abuse of executive powers.
The court held that the president ought to have put in place adequate provisions before giving the directives for the change of currency and added that the demonisation directive of the president is not consistent with the provisions of the law.
The apex court took a swipe at Buhari for disobeying its interim order of February 8 to the effect that the old naira notes of N200, N500 and N1,000 denominations be allowed to be in circulation.
Justice Agim held that the president exhibited and took the disobedience to the highest levels with his broadcast of February 16 in which he allowed the N200 notes alone.
The court held that the rule of law, which the democracy of the country is founded on, would become a misery if the president refused to obey the order of the court.
Sixteen state governments had challenged the Federal Government at the apex court on the controversial naira redesign and cashless policy.
The sixteen states, led by Kaduna, Kogi and Zamfara, prayed the apex court to void and set aside the policy on the grounds that it was inflicting hardship on Nigerians.
They accused Buhari of usurping the function of the CBN in the introduction and implementation of the policy and asked that the directive issued by the president be voided.
On its part, the Federal Government challenged the jurisdiction of the apex court on the grounds that the CBN was not joined as a party and that the dispute on the policy ought to be directed at the CBN so that the suit could be referred to the Federal High Court.
In the unanimous judgment, the apex court dismissed the preliminary objection raised by the defendants against the suit of the plaintiffs.
According to Justice Agim, the directive of the president to the CBN on the amount of money for withdrawal by individuals and corporate organisations is invalid.
The court held that the president acted ultra vires by his glaring failure to consult with the National Council of State, Federal Executive Council (FEC) and the National Economic Council (NEC) before directing the CBN to unlawfully introduce new naira notes.
The court held that the unconstitutional use of powers by President Buhari on the naira redesign breached the fundamental rights of Nigerians in various ways.
It said such use of powers by President Buhari is not permitted under democracy and in a pluralistic society like Nigeria.
The Supreme Court’s judgment came as an elixir to citizens that had long been subjected to untold hardships, with many losing their lives because of inability to access the needed cash to pay for medical bills and get prescription drugs. Others died protesting against the state-induced hunger and starvation.
