The Return of the Barter Trade at Rural Communities in Nigeria

[Agbe]

The redesigned of the new Naira banknotes was announced late last year and the deadline to use the old naira notes was given on the 15/01/2023 and before then the Central Bank of Nigeria CBN plus the Federal Government in the country told the citizens that the newly resigned naira notes will be available for everyone to use before the deadline, though they said nobody can withdraw more #20,000 which equivalent to $43.43.

But reaching the deadline which made all the citizens to go and deposit all their old naira notes to their various banks for the fear of expiration but when the last date came CBN extended the deadline and banks refused to pay their customers the money that is in their bank accounts from inside the banks except from the ATM and that makes or form a very long queue on the AMT stands.

Many people died because of this and almost 60% of business collapsed. On the 13th of February 2023, in my locality (State Capital) all the banks closed down. Bank network is malfunctioning.

Survival of the fittest by Hobbes

The age group ( old people) can't queue on the ATM and also they are not conversant with cashless technology. So they have to resort to their old way of buying and selling method. That the exchange of goods to goods so that they can survive. Barter




Cash Crunch: Rural Dwellers Resort To Trade By Barter

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[Don Pedro Dinero]

From what I have seen of the economy in Nigeria it is in a pretty disastrous state, and this is one more straw that fills the camel's back.

I also understand that cryptocurrencies are used quite a lot, but I imagine that this is in the cities, right? And that's why in the rural areas they've gone back to bartering.

Anyway, what a mess. Cheer up for those of you who live there.

[Zaguru12]

The deadline was first slated to be 31st January 2023 before the 10 days extension. I wouldn’t say this businesses have collapsed but rather they were shut down and the main reason was that the business owners do not want to transact in old currencies. We could all point fingers to the government for their lack of proper planning for the redesign even though they thought it might help curtail the problem of vote buying in the next coming election.
Then aside the government the commercial banks should take some responsibility too. First by hoarding the new notes and giving it out to politicians and people known to them rather than making it accessible to the general public. The bank also failed in updating their mobile banking apps which proved in this period that it can’t handled many transactions and it resulted in slow transaction process. The USSD codes that were supposed to make it easy for the cashless transactions has since been having network problems which clear shows the lack of proper preparation by this commercial banks, because Fintechs like Opay and Palmpay have been doing excellent well this period.
The citizens themselves made life difficult by charging exorbitant fees through the local POS withdrawals. Hospitals should also have provided means of accepting cashless transactions rather than sticking to the old way of paying with cash.
The government is currently looking to extend the deadline again for another 90 days period

[Die_empty]

From what I have seen of the economy in Nigeria it is in a pretty disastrous state, and this is one more straw that fills the camel's back.

I also understand that cryptocurrencies are used quite a lot, but I imagine that this is in the cities, right? And that's why in the rural areas they've gone back to bartering.

Anyway, what a mess. Cheer up for those of you who live there.

Some people are suspecting that this move by the central bank has a political undertone. Nigerian elections are normally challenged with vote buying, which means that the highest spenders always win. The present government wants to ensure that there is a scarcity of physical Naira notes to ensure that vote buying is reduced.

But this move is affecting the country negatively because Nigeria is not yet mature for online or internet banking. Many citizens are illiterate and cannot use any other banking channels apart from cash transactions. Nigerian internet service providers are unreliable and the country lacks infrastructure such as electricity supply. Switching from physical money transactions to online banking should be gradually and not his urgent style.

[Davidvictorson]

The new redesigned Naira note has become rare or out of reach of the poor masses across the nation, and most rural areas of Nigeria are about to adopt the barter trading system. The government wants its citizens to adopt a "cashless" culture, which is unlikely to benefit men and women in rural areas who are unused to or unable to use the internet because roughly 80% of individuals there cannot buy an Android phone. Even people with such phones do not have internet access. People will be forced to use the barter method of trading.

[Rruchi man]

The new redesigned Naira note has become rare or out of reach of the poor masses across the nation, and most rural areas of Nigeria are about to adopt the barter trading system.

The cashless culture that the government is pushing Nigerian citizens to adopt is making things difficult and it is not a culture that will be easy to adopt amongst the people in the rural areas and interior villages that do not have the facilities to support a cashless culture.

The government wants its citizens to adopt a "cashless" culture, which is unlikely to benefit men and women in rural areas who are unused to or unable to use the internet because roughly 80% of individuals there cannot buy an Android phone. Even people with such phones do not have internet access. People will be forced to use the barter method of trading.

Transactions can be made via the simple "Unstructured Supplementary Service Data"(USSD) that does not require internet connection or an android phone, but upon that, since people are not still very familiar with the cashless culture, it is difficult to adjust to.

The Barter system becomes the alternative for people especially in rural areas who are heavily into farming, fishing, hunting and other activities that provide a level of self sufficiency for them. Trade by barter can help them in this period before people begin to adapt.

[coupable]

I am sure that it is not the first time that people resort to barter in our modern era. Nigeria will certainly be one of those countries whose inhabitants may resort to primitive exchange systems. Nigeria is a country that suffers from political and security instability that affects the movement of the economy and impedes its growth. A reality that forced many people to adapt their lives and lifestyle to the new circumstances, and to adopt behaviors that they thought had become a memory from the distant past or that they were on the road to extinction.

[Scripture]

Are they trying to fully introduce digital currency or they are just going to issue another form of fiat money?

It’s too bad not to get your money directly from the bank and being limited with your withdrawals, this is a worst implementation so far and many already suffered. How the government will solve this one? i guess they gave enough time to their people but its still unclear who’s fault is this and why they are rushing into this implementation.

[Hydrogen]

The age group ( old people) can't queue on the ATM and also they are not conversant with cashless technology. So they have to resort to their old way of buying and selling method. That the exchange of goods to goods so that they can survive. Barter

If barter based trade is on the rise. Demand for reliable 3rd party escrow services could be as well. Which could pave the way for growth of that business sector.

While electronic escrow can collect a percentage of transactions, automatically. It could be far more challenging to escrow commodities and material assets. If they trade 3 chickens for 1 goat, how does escrow collect a percentage?

I think one of the biggest obstacles to people avoiding second hand markets and trades is difficulties associated with scams and unreliable bad actors. A trustworthy and reliable escrow service (along with some form of insurance) would definitely go a long way towards increasing trade volume and participation of barter based systems. That is probably the area where markets would need to develop and innovate for economies to have a chance of thriving on an independent basis.

[Husires]

Do you change the currency for reasons related to forgery? For example, discovering a defect in the nature of paper or the ease of forgery, or that forgery has become supported by authorities and governments, and therefore it is necessary to change the currency, or is it to solve economic distortions such as deleting or adding some zeros, or for any unimportant reasons, for example, cosmetic reasons, updating the paper or political reasons?

When the currency is changed, the public is given a period of one or two years with the adoption of old currencies and not forcing them to deposit and withdraw from the ATM.

[Findingnemo]

The redesigned of the new Naira banknotes was announced late last year and the deadline to use the old naira notes was given on the 15/01/2023 and before then the Central Bank of Nigeria CBN plus the Federal Government in the country told the citizens that the newly resigned naira notes will be available for everyone to use before the deadline, though they said nobody can withdraw more #20,000 which equivalent to $43.43.

But reaching the deadline which made all the citizens to go and deposit all their old naira notes to their various banks for the fear of expiration but when the last date came CBN extended the deadline and banks refused to pay their customers the money that is in their bank accounts from inside the banks except from the ATM and that makes or form a very long queue on the AMT stands.

Many people died because of this and almost 60% of business collapsed. On the 13th of February 2023, in my locality (State Capital) all the banks closed down. Bank network is malfunctioning.

Survival of the fittest by Hobbes

The age group ( old people) can't queue on the ATM and also they are not conversant with cashless technology. So they have to resort to their old way of buying and selling method. That the exchange of goods to goods so that they can survive. Barter




Cash Crunch: Rural Dwellers Resort To Trade By Barter

It resembles with what happened in India when their government demonetised the money and issued completely new notes including higher denominations and I remember banks out of paper money due to unavailability but it was temporary and government managed to bring the liquidity back but they can't catch their growth like before.

But how it can be said we have to return to barter system? It doesn't work with current society structure and what will be the case of working class? Cause they are not producing anything so how they can get what is needed for their survival...

[Majestic-milf]

 Well I won't say they are opting for a cashless policy because thst too is failing. Mobile apps have been prone to network hitches and if something is not done ASAP, there'd be more damage to the economy than they planned for.
 At present, the government seem to look confused and it's sorely affecting those at the rural areas and also at the urban and honestly, I won't blame them if they resort to trade by barter method since peeps would do anything for survival.

[BIT-BENDER]

This was the expected implication, how I do you expect a nation to function when there is no money? The Nigerian government and its central bank got it all wrong there, you can try to combat a problem by creating another problem for everyone.

The Nigerian government intended that their policy of a new note and putting a dead line on the use of old note would stop corruptions in the upcoming election. Even if it does it’s still against all human rights.

[Mate2237]

The chaotic nature of the Redesigned Nigerian Naira banknotes

Since the naira notes is not available on the street and even in the banking halls for the citizens to use, the angry youth in the country have started destroying things plus burning down of Banks and also destroying political campaign banners on the streets.

Nigerians use Money to buy Money

The old women, men and children, how are they feeding?
Those who hodle a very small portion of the new note sell it to other people that don't have it. Like someone has $20 of the New naira notes and you need it because you don't have any in your hand but you have it in your bank account, what you have to do is that, you send $12 to the owner of the physical cash account number then he will give you $10. This is the latest on ground. Nigerian Government and it economic team has failed the nation.

[Fiatless]

One main feature about humans is adaptability. The human brain or mind is very powerful that it can always seek for ways to solve it's financial problems. Nigerians have devised the barter system in order to survive this harsh economic policies. But the challenge is that barter will not give promote equitable exchange of goods and services because the value of the goods that is used for the exchange might not be well determined. Nevertheless, it is a good option because the people of Nigeria must survive.

[DrBeer]

Barter is a fairly ancient scheme of market relations. Yes, it is primitive, but it is not very convenient... But cryptocurrencies for the elderly population are an even more inconvenient and "suspicious" technology. The thing is that they don’t need blockchain and high technologies, they need to quickly, here and now, exchange what they don’t really need, for what they really need! In critical times, relationships always descend to more primitive technologies, and only real products that provide life and survival are of value. Even gold and diamonds in certain situations are exchanged for a simple loaf of bread in order to survive, although in ordinary life you could buy 1000 loaves of bread for the same diamond ring ... The value of different things in different situations is very relative!

[Zaguru12]

Nigerians use Money to buy Money

The old women, men and children, how are they feeding?
Those who hodle a very small portion of the new note sell it to other people that don't have it. Like someone has $20 of the New naira notes and you need it because you don't have any in your hand but you have it in your bank account, what you have to do is that, you send $12 to the owner of the physical cash account number then he will give you $10. This is the latest on ground. Nigerian Government and it economic team has failed the nation.

Yes the government and the Apex bank has created this chaos but just read through your last paragraph and you will know it is entirely not their fault. A citizen needs to have the back of his fellow Nigerian. Is the government also responsible for the high amounts charged by POS operatives? or are should we also blame it on them that the commercial banks decides to give this money to politicians or other rich individuals?
This policy is a good initiative and can only work if every Nigerians work towards it and not causing more chaos in this. I believe this suffering is temporary and will subside once the election period ends

[savetheFORUM]

It resembles with what happened in India when their government demonetised the money and issued completely new notes including higher denominations and I remember banks out of paper money due to unavailability but it was temporary and government managed to bring the liquidity back but they can't catch their growth like before.

But how it can be said we have to return to barter system? It doesn't work with current society structure and what will be the case of working class? Cause they are not producing anything so how they can get what is needed for their survival...

Well, it may resemble but there's no way that it is the same case, because Indian government, as far as I know, did that for a very good cause which was to fight black money and to make them worthless, hence they announced demonetization of their currency which they knew would be a big slap on the faces of those who earn and keep black money since they would never be able to come out in order to exchange the currencies.

This particular case to me seems like a plan or something maybe from the authorities or maybe from a bigger and more powerful source who might have some evil intentions which they want to achieve through this. Either way, I feel bad for the people living there.

[Lucius]

From what I read on the forum from members of the Nigerian community, it seems that their authorities are not quite capable of dealing with problems in an efficient and less destructive way for their citizens, although they are constantly trying something, so someone could perhaps say that with time they might learn something on their mistakes. It is a weak consolation for those who suffer because of it, but if you have a political alternative, then as a people you must show the will for change in the next elections.


As for barter trading, I can only say that it still exists in countries that are far more developed than Nigeria, and I have personally witnessed it in the rural areas of my country where people who live from agriculture exchange their products. People used to do this on a much larger scale because they were much more focused on production, but the more the human population moved to big cities, the more they became dependent on money and shops.

Unfortunately, this turned out to be a big problem, because if someone closes banks and ATMs, and if the distribution chains are also disrupted, then we have an angry and dangerous mass of people who are ready for anything.

[kryptqnick]

I've heard of the ATM crisis in Nigeria because of the mismanagement and ill-advised regulations of the authorities. Some speculated it would promote the use of Bitcoin, which seems pretty popular in some places in Nigeria. I'm really sorry to hear of people who died because of this and of businesses collapsing. This seems more serious than I initially thought. Barter is the natural thing to do in dire conditions, although of course there's a reason humanity moved to currencies: it's more convenient to have a medium of exchange than to look for people who can give you what you want but also could you what you have or are willing to take it and sell for something else later.
Nigeria seems to be a country of great people but ridiculous authorities that introduce obstacles to the economy of the country, instead of simply following the people and their initiatives.