Muslims endure Ramadan with ‘cash crunch’, inflation
After waiting for hours at a UBA branch in the Iwo road area of Ibadan, the capital city of Oyo State, a bank official would announce to the waiting customers that cash was unavailable.
Among the frustrated customers was Sanni Barokah who wanted to collect some cash for transportation to travel back home from her school in preparation for the Ramadan fasting.
“I met lots of Muslims at the bank the last time I went”, she said.
Some minutes later, a whistleblower tipped some customers that another branch was dispensing N5,000 and everyone rushed towards that direction without hesitation.
Barokah was tired having arrived at the bank as early as 6 am. In her uncertainty about whether to join the bandwagon or not, a veiled woman approached her to ask why people were rushing towards that direction.
“I informed her what they said about the bank with obvious facial irritation, and her response was: “Thank God, the amount that is given doesn’t matter. I can’t withstand going home with no money”, she joined the crowd and rushed down to the place”, Barokah recalled.
Such experiences and scenes are not peculiar to Barokah and the veiled woman and Ibadan city. For months, thousands of customers have been filling bank hallways across the country, trying to access their funds in vain. Banks ration funds for customers since banks themselves claimed to be short of cash following the cashless policy by the Central Bank of Nigeria.
As far back as October 2022 when the governor of the central bank, Godwin Emefiele announced that the bank would redesign N200, N500 and N1,000 notes and discontinue the old notes, no one foresaw the pains ahead. The policy was fully implemented in December when Emefiele disclosed that the new notes would be pumped into circulation. The old notes ceased to be legal tender by January 31 which was later extended to February 10.
The chaos subsided a little bit when President Muhammadu Buhari said in a national broadcast that ₦500, and ₦1000 are not eligible but ₦200 remains legal tender till April 10 and further relief came upon Nigerians after the apex bank decided to obey the supreme court judgment on allowing old notes to remain legal tender till Dec 31 but it is far from over.
People switched to transferring money to pay for goods and services but many were frustrated by the poor network service which was evident in the February data released by Nigeria Interbank Settlement System NIBSS NIP transactions where more transactions and less money transferred were recorded.
The implementation brought about protests, deaths and even threats to embark on a nationwide strike as it became survival of the fittest to get hold of cash for daily use.
Amidst the cash crunch, exorbitant charges by Point of Sale agents and hike in food prices, the Islamic fasting begins last week Thursday.
For many Muslim homes now, the concern is about food prices and to a great extent, the scarcity of cash which has been hurting businesses.
During Ramadan, fasting Muslims only eat early morning food (Sahūr) and dinner (Iftār). But the reality is families would spend more on food as a balanced diet will enable them to fast with ease.
Cash crunch collapses into inflation
The past few months were not the best times for Nigerians. The unprecedented cash fiasco hits hard — and still hitting — on traders, businesses, and even beggars on the streets nationwide.
Complicating the crises and the pain for Nigerians, the nation’s inflation rate rose in January after recording a fall in December in the midst of the cash crisis and fuel scarcity.
Marketers attributed the lingering fuel scarcity in the country to the high costs of vessels and inadequate trucks to deliver petroleum products from depots to filling stations across Nigeria.
But then, inflation rose to 21.82 per cent in January compared to 21.34 per cent in December, the National Bureau of Statistics said.
The statistics office said the headline inflation rate rose to 21.82 per cent compared to December 2022, which was 21.34 per cent.
The January 2023 inflation rate showed an increase of 0.47 per cent points when compared to December 2022 inflation rate, it added.
This means that prices of goods and services increased and purchasing power of the citizens decreased.
The NBS report on selected Food Price Watch for February 2023 was not palatable.
It’s a culture among Muslims to buy food in bulk at home, and such food includes yam tubers, vegetable oil, rice onion etc.
But the prices of food increased within a period of time and at least a month before the fasting period.
For instance, the average price of 1kg Yam tuber on a year-on-year basis rose by 28.45% from N339.76 in February 2022 to N436.41 in February 2023.
Also, on a month-on-month basis, it increased by 1.17% from N431.36 in January 2023.
In the same vein, the average price of Vegetable oil (1 bottle, specified bottle) stood at N1,196.68 in February 2023, showing an increase of 25.91% from N950.46 in February 2022. On a month-on-month basis, it rose by 1.10% from N1,183.67 in January 2023.
Furthermore, the average price of 1kg of Tomato increased on a year-on-year basis by 19.08% from N393.08 in February 2022 to N468.09 in February 2023. On a month-on-month basis, the average price of this item increased by 0.22% in February 2023.
The average price of 1kg of Rice (locally sold loose) on a year-on-year basis rose by 19.30% from N436.58 in February 2022 to N520.84 in February 2023. Also, on a month-on-month basis, it increased by 1.17% from N514.83 in January 2023.
Similarly, the average price of 1kg of Onion bulb rose by 18.99% on a year-on-year basis from N378.26 in February 2022 to N450.07 in February 2023. While on a month-on-month basis, the price rose by 0.81%.
Beyond the rise in prices of some food products, citizens have to pay extra charges to traders accepting transfers.
“The food prices aren’t issues as the prices are still like before but you are paying extra charges if you want to pay with a transfer”, said Barokah.
Also, a Lagos resident, Ayoade Sulaiman lamented that some traders accepting transfers add extra charges to cover bank charges, adding that getting cash to purchase goods from unbank traders has been a “terrible experience”.
“On food prices, some sellers add little prices to cover bank charges. Apart from that, getting food was easier when businesses started accepting transfers for food items. But, some people (pepper sellers, and others) don’t accept the transfer and you have to get cash to buy from them”, he said.
The NBS further notes that the average retail price for refilling a 5kg Cylinder of Liquefied Petroleum Gas (Cooking Gas) increased by 0.26% on a month-on-month basis from N4,588.75 recorded in January 2023 to N4,600.57 in February 2023. On a year-on-year basis, this rose by 24.05% from N3,708.58 in February 2022.
On State profile analysis, the NBS added that Kwara recorded the highest average price for refilling a 5kg Cylinder of Liquefied Petroleum Gas (Cooking Gas) with N4,962.86, followed by Adamawa with N4,914.00, and Niger with N4,907.50. On the other hand, Enugu recorded the lowest price with N4,179.41, followed by Rivers and Abia with N4,204.44 and N4,220.00 respectively.
“We’re just managing”, a woman in her 70s, who refused to give her name, said. “It’s those (traders) that accept transfers that have money to buy plenty of food at this time,” said the old woman selling bread in Oremeji, a local area in Ibadan city.