Cash crunch: Households unable to stock up home ahead of Ramadan

Several Muslim households are unable to stock up on food items ahead of the 2023 Ramadan period owing to the persistent naira scarcity in Africa’s most populous country.

It is common practice for Muslims to stock their houses with food items for the Ramadan season but many are unable to due to the cash crunch in the economy.

Our correspondent spoke with some Muslims who voiced their frustration with the negative effect of the cash crunch.

Maryam Adegoke, a social media manager, told BusinessDay of her inability to buy food items in bulk due to the cash crunch.

“Ramadan is in two days and I’m still yet to stock up and I don’t think I will, I have no idea how I will fast and probably wing it this time around,” she said.

She said that the current cash scarcity is a major factor, ”currently, I only have N400 with me and there’s no hope I’ll get more before the fast starts on Thursday.”

“This time around I’ll be buying my date fruit daily, an N100 quantity to break my fast instead of buying a lot,” she added

Maryam lives alone and so it is easier for her to get food daily during Ramadan compared to big families that need to buy food in bulk.

Fazihat Bello, the first daughter of her family, tells of the struggle her mom went through to get food items for the Ramadan season.

“My mom has just been transferring to all the traders she’s been buying from for Ramadan stock up, she wanted to pay for a paint of beans N2500 and the seller did not have an account because he’s a foreigner so she couldn’t buy from him.

She said that though the Ramadan season is one where people give a lot, it might not be sufficient as the ratio of the rich to the poor is low.

”I think this Ramadan period is going to be very bad because there’s no money, especially for the poor and the current cash scarcity is compounding the already high cost of living,” Bello said.

The 2023 Ramadan period will commence on the night of Wednesday, March 22 while the first day of fasting will be on Thursday, March 23.

“Cash crunch plus Ramadan will be excruciating suffering for the Nigerian Fasting Muslim Community,” HarunaN Abdullah, a public affair analyst tweeted.

Aside from the cash crunch, prices of food items have been surging ahead of the season. The country’s February inflation rate accelerated to 21.91 percent with food inflation at 24.35 percent, according to data from the National Bureau of Statistics.

Experts say the current cash crunch and the surge in food prices will make it difficult for Muslims to carry out their religious obligations during the period.

“Cash crunch plus Ramadan will be excruciating suffering for the Nigerian Fasting Muslim Community,” HarunaN Abdullah, a public affair analyst tweeted.

Abdullah sighted that those with a regular meal like Akara will be difficult to purchase as those that sell Akara (kosai) do not receive cash transfers because they do not have bank accounts and as such will be seriously affected by the cash crunch.

“Akara is an essential food item in the period of Ramadan fast. You need cash to buy Akara. And when the cash is not available then big problems dey!” he said.

Read also: Food prices rises for second straight month to 24.35%

According to the 2021 World Bank’s latest global index report, Nigeria’s banked population increased by 15.6 percentage points to 45.3 percent.

This implies that almost 56 percent of Nigerians are unbanked and they are mostly in rural communities and are heavily involved in the food sector.

The Supreme Court ruled on March 3, 2023, that the old N200, N500 and N1,000 remained legal tender till December 31, 2023, and the Central Bank of Nigeria had ordered money deposit banks to comply with the directive.

Despite this, there is still a scarcity of naira notes in Africa’s biggest economy with currency in circulation hitting its lowest in 14 years.

Our correspondents visited bank branches in parts of the country on the same day and found only a few commercial banks dispensing the old notes to customers over the ATMs, while the recent “over the counter long queues” remained.

At a bank in Ikota complex Lekki, N5000 old notes were the maximum amount issued to its customers.