Anger mounts in Nigeria where cash is king but money runs short

Brawls at banks, police patrols and ATM queues that snake the streets before dawn show the deep financial crisis that is crippling Nigeria, with the government scrambling to douse tensions and the people desperate for money.

Turmoil in the country’s banking sector – which has trickled down to every Nigerian of wealth or of none – was sparked by a government decision to make people swap out their old currency for newly minted banknotes.

The aim was to cut corruption and inflation, both spiralling out of control, but a scarcity of the new naira notes turned a sober plan into a countrywide crisis.

Ahead of Friday’s deadline to exchange old money – or lose it – urban Nigerians have taken to rising at night to get in line for whatever banks dare open their doors to angry customers or wait in thin hope of finding an ATM with money in it.

Many city dwellers say they have run out of cash completely and cannot feed the family or fill the car as the crippling cash shortages bite deep into daily life.

In rural areas, where banking is scarce and poverty widespread, panicked Nigerians worry their meagre savings will soon be worth less the flimsy paper it is printed on.

“I haven’t gone to a bank in a year. I keep the little money I have at home to buy and sell food. I won’t throw old money away,” said food vendor Funmilayo Akanbi, who lives in Patigi, a remote farming settlement in western Kwara State.

CASHLESS SOCIETY AIMS TO CURB INFLATION

Friday is the last day that Nigerians can turn in their old 1,000, 500 and 200 naira banknotes, part of a central bank initiative to curb the vast wads of cash in circulation and control double-digit inflation.

But with the new notes painfully short, chaotic scenes erupted at banks. Nigeria’s top court gave an order on Wednesday to suspend the deadline and the International Monetary Fund urged the central bank to consider an extension to stem the chaos.

The central bank did not immediately respond to the court ruling or requests for comment.

The bank has said that its plan will reduce fraud as the new notes are harder to counterfeit, and says it will foster a move towards a cashless economy.

But that goal is anathema to most people in Nigeria, where cash is king and anger is rising against the authorities, banks, urban elite and politicians of all parties.

“I have to queue for hours to withdraw money at the ATM, and then I will use the money to line up to get petrol at a fuel station,” said shop owner Omolara Mohammed, who makes daily pilgrimages round the ATMs of Lagos in pursuit of cash.

“Nothing makes sense in this country.”