Nigeria’s legal luminary ,Aare Afe Babalola is worried over the negative impact of cash crunch in banks to the well being of the nation’s economy.
He said the dearth of cash in banks is not effectively tackled, it could lead to “serious hunger which can dovetail to high mortality rate, uncontrolled crimes and increased insecurity”.
The Senior Advocate of Nigeria (SAN) and founder,Afe Babalola University, Ado-Ekiti(ABUAD) in a release entitled Cash Crunch By Banks : Damage May Be Worse Than COVID-19,
He implored the Federal Government to critically look into the situation and attend to it promptly.
According to him ,”Cash is useful for payment and for other transactions. It is favoured by the elderly and marginalised, low-income people. Cash becomes especially useful when natural disasters cause power shortages and destroys computers. Cash is the safest of payment and financial instruments for the public in under developed countries like Nigeria”the statement reads in part
” In recent time, the Central Bank and Commercial Banks have inflicted cash crunch on banks customers in the country. The cash crunch was felt virtually throughout the country. Many banks had turned customers back for lack of funds while those who had the misfortune of gaining entrance into the Banking Halls went home disappointed. Customers could not withdraw cash from the ATM machines in my university.
“The banks operating in the University also had no cash to pay to customers. The saving grace was that the students who rely on ATM machines were on holiday.
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He said :”Nigeria used to be a developing country but in the past few years, what we experience is backward development. Time it was that our economy was basically trade by barter. Gradually, traders exchanged goods for cash. Now most Nigerians earn their living from daily sales. These include market women, transporters, hawkers, vulcanizers, plumbers, roadside mechanics, hairdressers and so on. In the absence of sales through cash, these large proportion of Nigerians suffer more than the few wealthy Nigerians by the cash crunch imposed by the Central Bank and the commercial Banks.
The popular African adage is that “when hunger is eliminated from one’s problems, the remaining problems become easier to solve”. A man without cash will certainly go without food. He becomes hungry. Of course, a hungry man becomes an angry man and an angry man becomes violent. A violent man can kill, behave irrationally and even commit suicide.
Covid-19 was regarded as a dangerous and a dreaded epidemic which kills its victims but I dare say that cash crunch kills faster than Covid-19 and certainly will kill more people than Covid-19. According to study by Johns Hopkins “every minute, hunger kills 11 people compared to 7 Covid-19 death”. Hungry families also resort to desperate measures such as sale of babies, child marriage, banditry and kidnapping in order to secure food for the family.
According to Luiz Inacio Lula da Silva, President of Brazil, “Hunger is actually the worst weapon of mass destruction. It claims millions of victims each year.” This corroborates the statement by George McGovern that “Pay attention to the hungry, both in this country and around the world. Pay attention to the poor. Pay attention to our responsibilities for world peace. We are our brother’s keeper…”
“Some might say that in the developed countries, much cash would not be in high demand because of cashless payment policy. Yes, it only works because their governments have created enabling environment for such technology to thrive. In the Nigerian context, a country that prides herself in much of analogue platforms that cannot transmit election results because 301 out of her 774 Local Government Areas (LGAs) could not have access to internet can therefore not effectively run a cashless environment needless to successfully implement the so called “Naija e-wallet”.
