ABUJA, Nigeria (AP) — Nigeria’s push to switch its paper cash with newly designed forex notes has created a scarcity of money, leaving individuals unable to purchase what they want and forcing companies to shut throughout the West African nation, consultants and enterprise teams mentioned.

The Central Bank of Nigeria says the redesigned denominations of 200 (43 U.S. cents), 500 ($1.08) and 1,000 naira ($2.17) notes and new limits on massive money withdrawals would assist curb cash laundering and make digital funds the norm in Africa’s greatest financial system.

But the method to switch the previous forex notes is “rushed,” and business banks don’t have sufficient new money to offer to clients, pushing demand increased than provide, mentioned Ayokunle Olubunmi with Nigeria’s most important scores company, Agusto and Co.

The central financial institution “doesn’t want us to be spending cash; they want us to be doing transactions electronically, but you can’t legislate a change in behavior,” Olubunmi mentioned. “You have to make people see reasons and ensure those channels are reliable.”

The authorities is pushing for a cashless financial system that’s extra inclusive and says the modifications will drive financial progress. Critics are skeptical, pointing to many years of persistent corruption through which authorities officers are identified to loot public funds and create extra hardship for the various battling poverty.

As of October, greater than 80% of the three.2 trillion naira ($7.2 billion) in circulation in Nigeria was in non-public palms, however 75% of that has now been deposited with monetary establishments, the central financial institution governor, Godwin Emefiele, mentioned over the weekend.

He prolonged the deadline for Nigerians to deposit their previous banknotes by 10 days, to Feb. 10.

Even as extra Nigerians deposit previous forex in banks, The Associated Press discovered some monetary establishments had been nonetheless issuing the outdated notes to clients as of Monday. Bank clients advised the AP that they’re allowed to withdraw little or no money and face excessive financial institution prices for every transaction.

Digital funds run by banks are sometimes unreliable in Nigeria, leaving companies struggling as rising numbers of consumers have been unable to seek out the money to pay for items and providers. The scenario has created a parallel marketplace for individuals to illegally promote the brand new banknotes, the Nigeria secret police mentioned Monday.

“Someone might want to transfer funds to you, but it can’t be processed and they don’t have cash because of this issue,” mentioned Chima Ekwueme, who sells automobile components in Nigeria’s capital, Abuja. “Sometimes, I ask them to drop my goods and go and find money anywhere.”

The money provide disaster has disrupted such gross sales throughout the nation, forcing variety of companies to close down, mentioned Muda Yusuf, head of the Nigeria Center for Promotion of Private Enterprise.

“The two critical sectors of the economy — trade and commerce as well as agriculture — have been very badly affected because they do a lot of transactions in cash, especially in rural areas,” Yusuf mentioned. “This policy has brought their economic activities to a halt.”

Authorities ought to enable extra time for the previous notes to be regularly changed by the brand new ones, he mentioned.

“To make matters worse, the supply is extremely limited. Economic activities have been practically crippled as some people have locked their shops,” Yusuf added.

Nigerian authorities mentioned the redesigned banknotes and new withdrawal limits would assist curb using cash to affect the Feb. 25 presidential election, although consultants argue the forex modifications are being executed on the expense of most Nigerians. They’re already going through inflation of 21.3%, a 37% enhance within the fee in a yr.

“All these together are causing significant hardship in both rural and urban areas, (and) the hardship for people is merely collateral damage to the political class,” mentioned Tunde Ajileye, a accomplice at Lagos-based SBM Intelligence agency.