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Prices of all commodities – particularly food – are being slashed because of the scarcity of new naira notes in northeast rural areas

13 February 2023
Reading time: 6 minutes

Traders in the rural parts of northeastern Nigeria are begging the government to do something urgently to stop the scarcity of the newly redesigned ₦1,000, ₦500 and ₦200 notes because they are being forced to sell their wares for next to nothing just to get some cash in hand.

Commodities, particularly food, are nowhere near the prices they were before the new naira notes were introduced in mid-December and just about everyone in Nigeria – even in the cities – is complaining about the shortage of the new currency.

There are simply not enough notes in circulation, traders say, and this is so, particularly in the rural areas of Adamawa and Borno states.

Abubakar Shettima Kyari, a trader in Yola, the capital of Adamawa State, told RNI that he used to travel to rural areas and border towns to buy and sell commodities and he made a good profit and a good living.

“Before the notes were redesigned and issued, I sold one bag of maize for ₦18,000 or ₦19,000 in rural markets; in urban markets the price was between ₦22,000 and ₦23,000.

“But now, because there are so few new notes in circulation, the prices of food have fallen drastically. When I travel to rural markets in Adamawa, I see that bags of maize are being sold for ₦12,000 or ₦13,000 and still there are no – or very few – buyers because they do not have enough cash in hand. Most of the buyers and even many of the traders do not have bank accounts and so they cannot even do cashless transactions. The result is we’re all having to drop our prices drastically just to get cash.”

Kyari said traders were pleading with the government to do something about the shortage of notes “because it is making life difficult for us – instead of making a profit, we are losing money. We are not selling 40% of our commodities because we cannot get the prices – that side of our business has just come to a standstill.”

Shehu Bapetel Namtari, a buyer in Yola, said: “The prices of goods are declining in all the rural areas. When I went to Ganye Market to buy yam, I discovered that the price had drastically fallen. Also, I saw that bag of maize was sold for ₦11,000 or ₦12,000.

“One week ago I bought one plate of groundnut at a cost of ₦1,500 but now it is selling at ₦800. A big plate of groundnut that was selling for ₦1,700 before is now going for ₦1,000.

Before, one big plate of beans was sold for ₦700 or ₦800, now it is selling for ₦400 or ₦500. This is how the new naira notes have affected markets. There are just not enough notes to go round, so people are dropping their prices drastically.”

Some food traders in Muna in the Mafa Local Government Area in Borno State have also slashed the prices of food items just so that they can get their hands on the new naira notes.

Even the old notes were hard to come by, traders said.

Bashir Malami told RNI that the scarcity of both old and new naira notes was crippling traders’ business activities because they were having to slash the prices of their wares just so that they could get cash in hand.

“Before, we sold a bag of beans for ₦20,000 but now we are selling it at ₦14,000 or ₦15,000; a bag of maize used to cost ₦30,000 but now we are selling it for ₦22,000 or ₦23,000. We used to charge ₦650 for one plate of maize, now we are selling it for ₦400 or ₦500. We charged ₦1,000 for a plate of beans, now we are selling it for ₦650 or ₦700. And what makes it even worse is that there are still no buyers because they do not have cash either.

“The situation is affecting both sellers and buyers. Every day we are counting our losses instead of our profits. We are very worried about the situation in which we find ourselves. It is becoming critical. We are not making money anymore. And people don’t have cash to spend – not because they are poor, but mainly because they do not have cash. Commodities, particularly food, are now going for prices even the poor could afford if they had cash.

“With the help of the Almighty Allah, we hope the government will rectify this troubling situation. No one has enough cash now.”

“We have slashed the prices of food, such as rice, maize and beans – as well as other products – because we can’t get our hands on cash,” said Muna trader Mohammed Alhaji Shittu. “We are not familiar with cashless transactions because most of our trading takes place in rural areas where banks don’t exist and everyone has always traded in cash. That means we are solely dependent on cash to conduct our business activities.

“Now a lot of our trading has come to a standstill. Without cash, we can’t sell and people can’t buy. It’s really damaging our businesses and having a negative effect on our livelihoods.”

Umar Sanda, a public affairs analyst, told RNI that the scarcity of the ₦1,000, ₦500 and ₦200 new notes was making both buyers and sellers suffer and everyone was affected.

“The fact that traders in rural areas are slashing their prices shows how desperate people are becoming. Business for many has ground to a halt.

They are selling commodities at such reduced prices that they lose money rather than make money. They have always worked with cash. Most rural people – traders and buyers – don’t have bank accounts. There are no banks in most of these areas. Cashless transactions are an anomaly to them. They have never done business that way. It’s always been cash or nothing.

“But, in my opinion, traders should not slash prices as they are doing. That is not the solution. It’s just making their businesses fail. Instead, I believe they should adopt the new way of working because it’s here to stay. They should open an account and use point-of-sale (POS) machines and other smart gadgets to enable them to conduct cashless transactions. That way they will stop losing money and will again make profits.

“After all, it’s clear that cashless transactions are here now and clearly that’s the way it will be from now going forward. There’s no point in trying to fight it. Everyone needs to come to terms with it and change their ways of buying and selling. The days of conducting business using only cash have gone. Everyone needs to branch out otherwise they will be left behind.”



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