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Anulika Iwoba: POS Terminals: Inside Nigeria’s New Oil Money

Looking out the window of a campus-bound shuttle from Ogige Market Nsukka, the incredibly long lines at banks along University Market Road made no real sense to me until recently. Even with news reports of the anger and disappointment of Nigerians aroused by the scarcity of new naira, the necessities of the situation linger.

As the general election approaches, conversations about the failure of the current administration and the state of the country since 1960 have dominated public discourse. The rate of inflation since 2015 has become more significant, and Nigerians have been reminding each other just how deep a mess they are. But even our understanding of the miserable social and economic climate in which we lived, did not prepare us for the difficulties arising; The unwarranted misery into which the citizens were indulged with the redesign and circulation of naira notes.

On November 23, 2022, President Muhammadu Buhari launched the new Naira banknotes which finally surfaced after intense legislative discussions. By analyzing the possibilities of redesigning the Naira, many Nigerians believed that it would mitigate the circulation of counterfeit products, as well as control the circulation of cash. There was also the more attractive possibility of thwarting the plans of politicians who cash amassed funds to relevant stakeholders as well as voters in order to rig the voting process.
However, for most Nigerians, the most attractive benefit of the new naira notes is their proposed role in reducing insecurity in the country. Prior to the Naira redesign, the number of kidnappings and banditry rose dramatically in the country, with various social classes and ethnic groups targeted.

According to reports from Nigeria’s leading geopolitical intelligence platform, SP Morgan, 2,371 people were kidnapped in Nigeria in the first half of 2021, which means an average of 13 kidnappings per day. Between July 2021 and June 2020, at least 3,420 people were kidnapped across Nigeria, with another 564 killed in kidnap-related violence.

In another special report published by SB Morgen in 2021, the financial value of the kidnapping industry was examined, which revealed that 6.531 billion yen was claimed for the release of the captives while a small part of that amount was 653.7 million yen. paid as ransom in the period under consideration.
As the 21-page report stated:
“We have been careful not to include the subsequent ransom payments for the Abuja-Kaduna train accident as most of these victims were released in July 2022. It was reported on 25 July 2022 that eight Nigerian hostages parted with $100m each, while the Pakistani hostage paid $200m .

With every part of the country and every class of citizen at risk, no matter what policy could handle kidnapping, it was viewed with excitement. Hence the initial acceptance of the Naira redesign by many Nigerians. To be sure, calling for a cashless policy is not fundamentally harmful. As with many other government policies and programs, implementation makes all the difference.

Nigeria is already without money. But in an unexpected and inappropriate way. When implementing the Redesign Policy, the warning from the World Bank that the short transitional period for the Naira Redesign Policy may add to the challenges of poor households and small-scale businesses fell on deaf ears. As a result, the currency redesign has resulted in a much worse situation than the World Bank had anticipated.

In today’s Nigeria, nothing remains of the unwritten rule of decency in bank premises. The thorny nature of the Nigerian markets has found its way into the territories of commercial banks. Fights breaking out inside bank buildings and vandalism are not uncommon sights. To say a few of the new show of blatant nudity in banks by Nigerians who like to register their displeasure and frustration noticeably. On February 3, a man in Agpur, Delta State, fell and died after standing in line for several hours at a bank to withdraw new banknotes.

With new banknotes scarce, Nigerians have turned to mobile banking as an alternative method of processing cash transactions. The sudden pressure on virtual banking has exacerbated its already precarious state. Mobile banking in Nigeria, which relies on an already patchy network system, has completely collapsed in many parts of the country. With poor cash circulation, no mobile banking capability, and an overwhelming waiting list at banks of the kind that could kill you, point-of-sale operation has become the new oil money.

When points of sale (POS) first appeared in Nigeria in 2012, and started to spread rapidly in 2013, Nigerians believed that the end of banking-related challenges had arrived. It was the dawn of ease in cash transactions as it meant there were fewer queues in front of commercial banks’ automatic teller machines (ATMs), and card payments were made in shopping malls that had these facilities. More importantly, it also opened a new gateway for commercial banks to extend financial services to remote and largely illiterate communities, which lack the amenities to attract and sustain real banking institutions.

All this was in line with the commitment of the Central Bank of Nigeria (CBN) to advance its cashless policy. In 2022, the Nigerian Interbank Settlement System (NIBSS) reports that the value of transactions conducted via point-of-sale terminals across the country has increased by NIBSS 1.05 trillion. According to the published data, POS transactions hit an all-time high in 2022 in a 7-month period, increasing by 29% to reach 3.56 trillion and 4.61 trillion in 2021 and 2022, respectively.

The irony is that the same POS, which was designed to provide a more convenient alternative to direct banking services, has today turned into a cash cow at the expense of Nigerians.

POS operators now charge 20% on cash withdrawals of 10,000 naira and above at a rate unmatched by traditional bank charges in their exorbitant amounts. For a country with a minimum wage of 30,000 naira ($65), and 63% of its citizens are multidimensional poor, a 20% fee on point-of-sale transactions is quite a high price. As I drove into town in a cab, I overheard a woman lament her wedding being postponed because she couldn’t afford the point-of-sale agent’s fee for cash withdrawal.

In the midst of mounting economic challenges, Nigerians are coming to terms with the disappointing reality of the similarity between us (the people) and our leaders.

For too long, we have tried to hide the truth about our corruption by paying more attention to the irresponsibility and failure of our government. We have tried for far too long to consider the traits of corruption and exploitative tendencies that permeate the veins of the average Nigerian citizen, bearing a striking resemblance to the typical Nigerian political class. At this time, we can no longer ignore the general trend of exploiting unfortunate circumstances for personal gain. A defect always rears its head in times of deep economic crises and personal misfortunes.

It is tragic enough that the new naira note is nowhere to be found. Even worse, mobile banking has become a matter of luck. But the exploitation of Nigerians by point-of-sale agents presents a deeper ethical problem.

Nigerian leaders are not an independent monolith wholly different from the population. More than we would like to admit, Nigerians are a lot like their leaders.

In Chinua Achebe’s The Trouble With Nigeria, the author writes:
The morning after Murtala Muhammed after Murtala seized power in July 1975, public servants in Lagos were found ‘on their seats’ at 7:30 am. Even the ‘slow’ traffic that defeated all solutions and defied every system vanished overnight. From the streets Why? The new rulers’ reputation for cruelty was enough to change the style and habits of Nigeria’s unruly capital in just one night. The character of one man could prove that the quantitative change in the social behavior of the people was nothing short of a miracle. But it does show that social miracles can happen.” .

Social miracles can also begin in Nigeria with one man’s refusal to succumb to the pressures of ugly times and become an ugly man. Social miracles can begin with our refusal to exploit further miserable situations and deny fellow Nigerians hope and healing.
We are tired of our leaders in our leaders. The last thing we need is to find our leaders in ourselves.

Iuba, a media graduate, wrote from the University of Nigeria, Nsukka, UNN.

Anulika Iwoba: POS Terminals: Inside Nigeria’s New Oil Money

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