This report examines how Naira scarcity impacted upon the inhabitants of an underserved local government area. Baruten local government has just one bank serving its entire population. To access banking services the locals have to congregate at the bank located at Kosubosu, or cross to Shaki in Oyo state. They make use of the CFA, the currency widely used in Benin Republic and Francophone West Africa. The brand-new Naira note can be purchased at Kabo and Parakou in Benin, while inhabitants of nearby Baruten have not set eyes on the currency. Majority of the locals are farmers and they are unbanked. Illiteracy, poverty and historical neglect of the area combine to limit this agrarian population. This is the story of large-scale institutional failures across a border area in Nigeria, which made the region ‘infrastructurally deficit’ in many ways, and therefore unprepared for Nigeria’s new cashless policy. Two trips were made to Baruten in February in order to measure the impact of the new policy on yam and cattle farmers, and other groups in rural communities.
‘In last 5 days’
“I have not seen a single Naira note in the last five days. I sent my secretary to take all my old naira notes to the bank. I asked him to withdraw some money, and he was not able to do so,” says Sabi Idris, the Emir of Gwanara. Four districts make up Baruten local government in Kwara state, and Gwanara is one of them.
The soft spoken widely travelled Emir mentions that his people are slowly being impoverished, owing to the scarcity of the currency. Hundreds of feeder roads lead to countless villages and hamlets in the hinterland of the local government, where huge farming populations reside.
The cash swap policy of the federal government announced in the last quarter of 2022, has implications for this massive unbanked population living in remote locations. A report indicates that Nigeria is one of the three unbanked countries in the world, with 40% of its population without a bank account. The local government occupies 9,749 kilometers. One source states that the local government has a population of 500,000 persons. Google indicates that the census of 2006 provides a figure of 209,459 for Baruten local government.
‘Living from hand to mouth’
“People here are living from hand to mouth, and they are not making enough money. Illiteracy is also a factor here, as many people think that the banks will steal their money. They say that if they keep their money under their pillows, they would have easy access to it,” Idris emphasizes. Hardworking farmers use simple tools to eke out a living all over the local government.
The road from Ilesa to Gwanara passes through many small villages flanked by valleys and small hills, and at this time of the year the Cashew trees on both sides of the road are fruiting. People gather in their numbers carrying long sticks to harvest the fruit.
No new notes, no old notes
Woruyo Musa, Secretary to the Emir of Gwanara, sheds light on the impact of the cash swap policy. Hear him: “The situation is worse than when you last visited. There are no new notes and no old notes in Gwanara. Things are so difficult. Economic activities are paralysed. The major problem we have is that people don’t have bank accounts. So the cashless policy is difficult to implement here. Like the butchers who are selling meat, they are not accepting old money and don’t have accounts. Therefore, transactions become impossible. Also, the percentage of women with bank accounts is zero.” For these people cash swap is a euphemism for the slow pauperization of their agrarian community.
CFA rising
Umaru Usman Sariki is the Emir of Yashikira and he comments on the use of the Beninoise currency in Baruten. His words “Definitely, the use of CFA currency is an obligation in the border communities, more so, during this period of change of Naira notes.”
He draws attention to numerous agricultural communities “From Shekugbe (border with Niger state) to Kosubosu, we have not less than fifteen communities/villages. Some of them such as Karonji, Chikanda, Yashikira, Kuburufu, Gure, and Yanri have large foodstuff markets.” The CFA stands as a great help to these communities in the local government which had no access to the new Naira notes.
One bank
Baruten has only one bank, located at Kosubosu, the local government headquarters, which is 85 kilometres from Ilesa Baruba and 50 kilometres from Gwanara.
Long ago when Baruten was part of ten districts within the Nigerian part of Borgu, the entire region had one bank at New Bussa in Niger state. Many years after the area still has just one bank serving four districts. Nigeria has 24 commercial banks. These used to be 89 in number, until the banking reform which slashed the number, indicates an online source.
Travel to Shaki
When people need to make use of a bank, they travel to Kosubosu, or they cross to Shaki in Oyo state where there are several banks. For instance, inhabitants of Ilesa as well as Okuta may easily cross to Shaki, since it lies close to both districts. Another option many have resorted to is to make use of the CFA, the currency of Benin Republic. This currency is easily available in the local government and is very popular among the locals.
Shadow of itself
In Ilesa Baruba the Kara international cattle market is now a shadow of itself, and cattle were purchased there using CFA a few weeks ago. There is a room in the market where CFA can be readily purchased in broad daylight. It is an unforgettable market. Huge wooden stakes are driven into the ground, and cattle are attached to each stake, giving the market a special character of its own. Around these impressive stakes pastoralists, buyers and dealers gather and bargain all day long. Small dusty paths criss cross the entire market. Kara market receives cattle from Mali, Niger and Benin republic each week. It forms part of a huge border economy.
‘Nomads don’t have accounts’
Ardo Gideri, Chairman of Miyetti Allah Cattle Breeders Association of Nigeria (MACBAN) in the local government, comments on the impact of the cash swap policy on the pastoral Fulani. Many pastoralists gather in the MACBAN office very close to Kara market as we speak “Most of the Fulani dont have accounts. If they go to the bank to open accounts, they are asked to bring their national identity card as well as NEPA bills, which they don’t have.” He adds “Yesterday was the Kara market day, and over two hundred cows were returned home, because there was no money to do the transactions, and most of the nomads don’t have accounts.”
N100m Lost
“If people bring old notes, we collect. If they bring new notes, we also collect,” says Fati Salihu, a cheerful milk maid at Kara market, adding that she does not have a bank account. Nigeria has 38 million financially excluded adults states marketingedge. She is one of them. Gideri mentions that 100 million Naira has been lost as a result of the lull in trade at the Kara international cattle market.
Gideri highlights varying prices triggered by the cash swap “Ram and goats that we used to buy at N65,000 before the currency swap, are now bought at N25,000 -N30,000 respectively, using either the old or the new currency.”
8 trailers, now 2
At the Chikanda cattle market which lies more than a hundred kilometres away from Ilesa, Sido Umar, an official at the market, speaks of a sudden decline in trailers bearing cattle “Before the currency swap policy we used to receive a minimum of eight trailers of cattle at this market every day, but now we receive just two each day. We are suffering seriously here. Apart from the CFA which we use to transact business, there’s no money here. A big cow is sold for CFA 400,000.”
‘I buy yam in the bush’
Aishatu Mumuni, the elderly slightly dramatic Head of Yam flour traders at Chikanda, confesses when we meet her that she has less than Two Hundred Naira in her purse.
She provides insight into the way farm produce is sourced in rural communities “I stopped trading in Yam flour two weeks ago because there is no money to use to trade. I always go to the bush to buy yam and other foodstuff from the Fulani and other groups, but they rely on cash. If you don’t have money, then you cannot purchase foodstuff from them.” She reveals “If the Fulani bring crops to the market, there is no money to pay them. So, today no transaction, no trading is taking place.” The economy slowly grinds to a halt.
No regular source of income
“The income of many people is so low; they believe they don’t have business having a bank account. I think there is a lot of ignorance about banks. The people don’t have a regular source of income. Again, our mentality in Nigeria is still cash based. We have this cash-based mentality, but here in Baruten, I think the issue is ignorance, and a very low level of income,” explains Abubakar Halidu, the Emir of Ilesa Baruba.
He reveals “Now, people are willing to take the old notes since there is this extension. Even then you can’t get the old notes. Last week the cattle market couldn’t hold. People came all the way from Lagos. It couldn’t hold. There was no cash, either old or new.”
‘Banks not viable here’
Speaking on the question of banks in the local government, the royal father who is also a Professor of Public Finance, says “Setting up banks here is not viable because all you can get are small deposits, and banks don’t grow on small deposits. They need much more, credit facilities and so on. I used to be very keen on having banks here. It doesn’t make much economic sense for banks to establish here. Even where they establish rural banks, they have problems of banditry.”
‘Economy cannot support banks’
He adds “We have to look at it from the point of view of a banker. The economy is such that it is not so buoyant. The bank at Kosubosu relies largely on the local government for patronage, paying salaries and so on. Apart from a few individuals who are into business around Chikanda area, I am not too sure there are many Baruba people who have up to 50 million Naira in their accounts. The economy here is not one that can support so many banks. If this place was developed it would have an economy that could support numerous banks.”
5,000 women
There are bags of yam flour stretching as far as the eye can see at the popular Okuta market, and there is also the pleasant smell of the product confronting you at every turn. More than 5,000 women participate in the Yam flour trade in this community. Yam flour also referred to as elibo, is placed in basins or piled high in bags. People are busy filling the bags with the product, while others wheel bags of yam flour to various vehicles. There is a pause in the trade and though it is not yet noon a few women have already fallen asleep.
A plunge from N16,000 to N10,000
The women open up on their experience under the weight of the Naira scarcity. Hannatu Alhassan is the leader of the Yam flour traders “The scarcity of Naira is seriously affecting the trade in yam flour. A basin used to be sold at N16,000. Due to the scarcity of Naira, those who come with new notes buy a basin at N10,000. Also, buyers are not coming owing to a lack of notes.”
“Our level of income is low, and so there is no money to put in an account. Instead of having money in bank accounts, most of us prefer to buy elibo and store it,” states Ladi Nuhu, another trader.
Poverty, rather than illiteracy
“Most of the women cater for their families, and they cannot do so now because of the lack of new notes. They use money in buying the elibo, and the profit is used to do other things like paying school fees and the general upkeep of the house. When there is no trade everything stops,” explains Alhassan. She argues that it is poverty rather than illiteracy, which explains why most of the women don’t have bank accounts.
Her words “We have nothing to save. The little we have is put into the business. Therefore, there is nothing to save.” Around her women gather and listen attentively, nodding their heads from time to time as she speaks.
Kabo, Parakou
Idris Abubakar, the Emir of Okuta reveals that new Naira notes can be purchased across the border “The new Naira note is available in Benin republic, precisely in Kabo and Parakou, much more than in Okuta where we are. We noticed this about a week ago. People go to Kabo and buy the notes. When you want to buy the new Naira notes, you pay a certain commission to those in the trade.”
CFA widely used
He continues “When government said there will be new notes, I told my people that we are going to suffer because we have just one bank in the whole local government. Our people are suffering. A poor person has a basin of soya beans which recently sold for N8000. On account of the scarcity of new notes, a buyer now wishes to purchase it at N5000. You know that is terrible for our people. Also, the CFA is being spent here because there is no Naira. Even before the cash swap CFA was a welcome currency in these parts, but the scarcity of Naira means that the CFA is more than welcome. People from Ibadan and Ilorin enjoy gong to the Republic of Benin to trade, because they have CFA.”Nigeria’s loss becomes a gain for the Beninoise economy.
70% don’t have bank accounts
According to Abubakar “In our axis it is difficult to get the new currency, it is virtually impossible. If you want to buy anything they will say, go and do a transfer. Seventy per cent of the people here don’t have bank accounts, because they are typical farmers. They keep raw cash against another season. How do you make a transfer without an account? Such persons don’t have bank accounts. They always use cash,” comments Yusuf Jimoh Ige, Oba Yoruba of Yashikira (leader of Yorubas) while speaking on the Naira scarcity.
He states that majority of the women in Yashikira are unbanked, and that people who are lucky to have accounts are N-power beneficiaries as well as civil servants in the area.
‘I don’t have an account’
At Old Runtowa Bekokoru, the headquarters of the Fulani in Baruten local government, Aisha Mohammed, a milk maid speaks on Naira scarcity.
Her words “I do not have an account. I don’t know what an account is. I sell Ororo oil and palm oil which I obtain from Benin Republic.” She mentions that she has stopped buying both Ororo Oil and palm oil because she does not have the new Naira notes, adding that she does not know of any milk maid in the area who has an account. The milk maids in the local government trading without bank accounts are in the hundreds.
Fulani migrating
Yusuf Sale, the Ardo of Baruten reveals that thousands of cattle left Baruten sometime in February on account of the Naira scarcity. His words “Our people are leaving Nigeria taking their wealth, our cows, our resources to another country. The Fulani are migrating. Ghana is receiving them because of the revenue generated from them. More than 25,000 cattle left Baruten recently.”
POS operators absent
He speaks on the cash scarcity crises “We don’t have banks here. We only bring our goods such as cows and foodstuff to the markets. Yesterday, people came to buy cattle and farm produce, and they had to transfer money. But all the POS operators had taken their money to the bank. There was no new currency for them to attend to the customers.”
‘Nomads buy in bulk’
He provides details of typical everyday life among the Fulani “The Fulani buy their materials such as rice, maggi and salt in bulk which will last four months. They are not the type of people that will go to the town or market every day. They live in the bush. If they wish to buy anything, they dispose of their cows and buy what they want. Then they buy items that will last four months. When it is about four months before the goods finish, they sell cows again to go and obtain food items in bulk. This sort of life does not require an account.”
Sale argues “Lack of education is a problem. 75% of the Fulani are not educated. They only have Islamic education, and the government is not using Islamic education, as all the alphabets are in English. A person who cannot write his name, who cannot identify numerals, how can he write out a sum he wishes to transfer? 95% of the Fulani don’t have accounts.”
Casualties
Sale shows how the cash scarcity affected the family of a pastoralist in Ilesa “People are dying in hospital. A pastoralist had an accident and was taken to hospital here in Ilesa. His family brought cows to sell in order to raise the hospital fees, and he raised two hundred thousand Naira cash in old notes. The hospital rejected the old notes and the man died.” There are similar such stories throughout the local government.
Baruba farmers migrating
Farmers within and around Ilesa Baruba have started to migrate to Benin republic. This information was revealed by Abdullahi Ogun, a cattle dealer and farmer in Ilesa. His words: “On account of the Naira swap policy, farmers from Yakiburaru village have started to migrate to Benin Republic with their families. For instance, Baba Tobure a farmer migrated to Benin Republic with his family, made up of two wives and many children.”
The road to Yakiburaru is a feeder road that easily accommodates a motor cycle taxi. Numerous motorcycles passed us as we headed towards the village, bearing large sacks containing farm produce. Along the way are occasional wooden bridges built to assist with crossings at small rivers, regularly flooded during the rainy season. This community lies in some of the remotest parts of the district.
Sherifat Abdulrazak, a housewife in the village is seriously thinking of relocating to Benin Republic. This is a fall out of the impact of the cash swap policy. Many of her neighbours have already left for Benin. Yakiburaru is a quiet Yam flour producing community, and some of the produce is being cooked in large pots in a corner as the interview progresses.
Road to Togo
Hear her: “Many people in Yakiburaru have left for Benin Republic. Some even went to Togo. This is because of the impact of the cash swap policy. I am not doing anything here. I feel like leaving too.” Another member of the community argues that when there is no money to buy food, it makes a lot of sense for a farmer to move to a place where he can work and feed his family.
His words “Many people have migrated. If the Naira circulates, they may come back. If there is no improvement in the situation, more people will migrate.” Yakiburaru’s young energetic work force is slowly filling the farmlands of Benin.
Illiteracy, phobia
“We don’t have enough new notes. We travel from here to Shaki to collect cash, but the ATM dispenses N20,000 per BVN per day. People in rural communities don’t have accounts. They don’t believe in having accounts because of the activities of fraudsters. They like to see their money physically. Illiteracy is also a factor here. Some of the locals have phobia about going to banks. When they go there, they don’t know what to say,” reveals Hamza Abubakar, a POS operator in Ilesa Baruba who opens up on the difficulties POS operators have faced in the last month or so.
Everything sold cheaply
Ahmed Idris, the Village Head of Gobo in Gwanara District comments “Because of the cash swap policy, people are suffocating on account of the fact that they don’t have money. So everything is sold cheaply. The price varies depending on the scale measured. When people sell, they do so to get money to sustain their families. They are no longer following the standard price, and so they lose greatly.”
He sheds light on a local attitude to wealth “The problem we have is that people don’t want others in the community to know that they are rich, because they believe that if people know that you are rich, they can harm you in one way or the other. So, when you have money the secret is with you. The problem is that when you die, everything perishes. We try to tell them the disadvantage 0f this, but they still do it.”
Sold cheaply
Idris makes a revelation relating to the new Naira notes “The economy is so poor now. Their farm products are sold cheaply, and that’s going to affect us. We are used to storing food from one year to the next. Now there’s no money, and people are rushing to sell this food that they had stored. Then what will they use to survive? That’s the problem we have.”
Symbol of prestige
He shows that Naira is a popular currency in Benin “People who have access to the new notes prefer to go to Benin republic to do their business. That is why the money is of more value there. They use our money and we use their CFA. Our money is used there during occasions. Each time they have occasions, since they know people like spending our money more than theirs, they come and make the exchange, and get the Naira to go and spend in Benin republic.”
He comments on the place of Naira in Benin “The Naira is a symbol of prestige in Benin. Naira is sprayed on newly married couples during wedding receptions, just as we do in Nigeria. After exhausting one bundle of notes, a man will bring out another and continue spraying. In the course of doing that, you see that the money is circulating.”
Not seen new notes
At the village of Tenbonu in Okuta district which sits on the border with Benin Republic, Idris Sina, the Village Head speaks “I haven’t seen the brand-new notes, only the old ones. Since yesterday the traders around here have not been accepting the old notes.” The border with Benin Republic lies just two hundred meters from the house of the Village Head. Network coverage is very poor in the community. The Village Head shows us a tree which people climb whenever they wish to make a phone call into Nigeria, using a SIM card obtained from Benin Republic. He confirms that farmers have been migrating to Benin republic alongside their families.
Everywhere quiet
“At present we have neither old nor new notes. Everywhere is quiet because there’s no money. In the past between Ilesa and Boriya you will encounter thirty to forty vehicles on the road as you travel, including numerous motorcycle taxis. But now there’s no traffic, simply because there is no money to buy items, except you do a transfer,” says Gunu Abdullahi, Village Head of Boriya, lying a few kilometers outside Okuta.
Queuing for 4 days
“On account of the change of currency, we are suffering because of the new money. We took the old money to the bank, joined the queue for two to four days before they collected the old money. If you buy an item worth five hundred Naira, and you give a one thousand Naira note, they don’t have change in the new currency to give you,” reveals Idris Sabiu, Youth Leader Chikanda Community, commenting on challenges faced by the people.
Naira has depreciated
“The value of the Naira has depreciated compared to the neighbouring country. Before 2015 CFA was exchanging CFA 1,000 for N400. Now its exchanging for N1,200 to CFA 1,000. This shows the depreciation and how it’s affecting the economy. Naira swap has really affected us. Majority of the people don’t have bank accounts. Even those who have bank accounts pay exorbitant fees when they go to the POS,” explains Abubakar Isa, trader and legal adviser to the Chikanda Community.
‘Least developed in Africa’
“With poor infrastructure and social services, Borgu’s integration into the national economic network has been minimal, despite being thought of as a “food basket”, (p.315) writes Dr. Hussaini Abdu in Partitioned Borgu (2019). Later he declares “Border regions are generally the least developed in Africa, unless where such regions coincide with industrial locations, urban areas or major political centres. They are often removed from the centres of urbanization and development.” (p.350) Baruten is characterized by a largely unbanked population, a single bank at Kosubosu, poor GSM coverage, poor internet connectivity, bad roads and its economy is largely cash-based.
