Naira Scarcity: How CBN policy caused suffering for Nigeria’s poultry farmers

On 3 March, the Supreme Court later ruled that the old notes be recirculated alongside the new notes until 31 December.

Some Nigerian poultry farmers recorded huge losses due to the scarcity of naira notes caused by the implementation of the naira redesign policy of the Central Bank of Nigeria (CBN) in the first quarter of the year.

Farmers who spoke with PREMIUM TIMES within the week explained how the cash crunch affected sales of poultry products such as eggs and broilers amidst high prices of poultry feed. Other farmers lamented how they recorded unprecedented losses and sold off their birds at low prices.

Although the CBN and commercial banks in the country are beginning to comply with the Supreme Court ruling that the old naira notes be circulated until 31 December, poultry farmers said that they are reeling from the ripple effects of the naira scarcity.

Background

On 26 October 2022, Nigeria’s CBN announced the introduction of newly redesigned 200, 500 and 1,000 naira notes into the country’s financial system. But after the notes were unveiled, millions of Nigerians across the country were unable to access them from banks and ATM cash points.

The development triggered protests and frustration among bank users who took to the streets to express their grievances. In the midst of the crisis, the CBN extended the deadline for the phasing out of the old notes from 31 January to 10 February. Yet, many Nigerians and several businesses had a hard time functioning effectively due to difficulty getting the new notes.

Amid the hardship being faced by Nigerians, the country’s Supreme Court gave an order restraining the CBN from going ahead with the implementation of the 10 February deadline set for the phasing out of the old notes. But in his reaction, President Muhammadu Buhari during a live broadcast only approved the continued use of the old N200 notes up until April. Thus, the naira scarcity persisted.

On 3 March, the Supreme Court later ruled that the old notes be recirculated alongside the new notes until 31 December.

Poor Demand

Peter Ogbeide, who runs a poultry farm in Nasarawa State, said the cash crunch has crippled his poultry business. He recorded huge losses as a result of poor sales due to a lack of cash, he said.

“This issue (cash scarcity) has crippled our poultry session! We are forced to stop the birds from laying by not giving them (birds) Layers feeds and planning to sell off,” he told PREMIUM TIMES in an interview.

Last week, he said, a company brought more than 100 crates of eggs and was forced to sell for N500 to N800 per crate as against N1500 and above it was trading before the new naira policy was implemented.

“We have about 80 crates of eggs that we have not been able to sell despite dropping the price to 1700 as against the wholesale price of 1900! We fear by Monday the eggs would start going bad because they would have stayed more than 5 days,” Mr Ogbeide said.

As a strategy to encourage their customers to buy eggs, the farmer explained that they had to suggest transporting the eggs to their customers after reducing the price. Despite the marketing strategy, he lamented, customers complained of a cash crunch.

“Most of them are saying they still have the ones we supplied them since last week as consumers don’t have the cash to buy them off their shelves,” Mr Ogbeide noted.

On his part, Oyewole Ademola, another poultry farmer in Nasarawa State, explained that the Nigerian local market, sales and service are basically cash driven but that the recent cashless policy enforcement by the government and the CBN affected their businesses.

As a farmer and egg producer, Mr Ademola said, the price of eggs per crate slumped from N1800 to N1500 from the farm. He added that the retailers are complaining of low patronage due to the unavailability of cash.

“Eggs have a lifespan of two weeks before they get rotten, no retailers would want to stock it for too long,” he said.

“The eggs are getting spoiled. We may have to begin to bury the product as a waste if no one is buying due to the cash strap inflicted on us by those who are expected to support the farmers.”

The farmer noted that Nigeria is a cash-based economy unlike the developed country where most things can be bought from the shopping mall in bulk and payment can be made with credit cards.

Timothy Okunade, the ex-president of the Kaduna State chapter of the Poultry Association of Nigeria (PAN) who spoke with PREMIUM TIMES early this week, described the situation as “bad”.

“Can Emefiele release more cash into circulation before he kills the poultry industry in Nigeria? At least the election is done now. Please help us to plead with Emefiele for God’s sake,” he lamented.

In a video shared with our reporter, shot on his farm, crates of eggs were placed in several rooms without off-takers while the farmer could be heard lamenting that his entire farm is littered with eggs, while the birds are still laying and feeding on expensive feed amid dwindling sales.

PREMIUM TIMES also reported how in neighbouring Plateau State, the state government had to mop up eggs from farmers to save their businesses.

Way Forward

Mr Ademola said the government and the CBN have to review their decision about the naira redesign policy that has caused a lot of pain and suffering for many Nigerian businesses.

“This is not a cashless policy, it’s confiscation of people’s money by FGN/CBN,” he added.

Azeez Salawu, founder and executive director at Community Action for Food Security (CAFS) Initiative, said the cash crunch has had a severe impact on poultry farmers, leading to significant losses of eggs and income.

He said targeted government interventions could be helpful in cushioning the effects of these policies on farmers.

“Financial assistance and access to credit facilities can help these farmers cover their operating costs and invest in their businesses during these difficult times. Subsidies for poultry feed and inputs can help to reduce production costs, making it easier for the farmers to maintain their businesses and generate income,” he said.

Mr Salawu added that training and educating the farmers on alternative strategies for managing their businesses such as diversifying their product offerings, expanding their customer base, or exploring new markets can be valuable for the farmers who are facing this current economic uncertainty.

Overall, he said, a comprehensive approach that combines financial assistance, access to credit, subsidies, and training and education will be effective in supporting poultry farmers in Nigeria during this challenging time.

“It’s important that policymakers prioritise the needs of farmers and work to create policies that help them to thrive and succeed in the face of economic adversity,” he said.