Lagos – Cash is still king!

Nigeria: No cards, please

Leave your cards and home, and get used to these if you plan to spend time in Nigeria.

Having relocated from Nairobi to Lagos in January 2013, I have settled down, and gotten more or less used to living here. Apartment, car, driver, etc., are already in place, and I dare commend my own exploration work on the wining and dining scene.

As a North European, used to Kenya, where one can expect relatively swift and modern service delivery, getting to terms with the almost exclusively cash-based economy is a major challenge, though.

While the Lagos state authorities are trying to promote the vision of a “cashless economy”, most businesses are still stuck in the financial paleolithic of “cash only”.

It gets extra frustrating here, as the highest currency denomination is ₦1,000 (€5), and most ATMs only dispense up to ₦20,000 (€100) at a time. Lagos being Africa’s most expensive city, residents are perpetually forced to carry huge piles of paper.

Since I don’t have a local bank account yet, that nuisance becomes even more expensive, as my bank charges a fee for each ATM withdrawal. Since I am limited to ₦20,000 each time, the sum of those fees becomes rather elevated at the end of each month. In addition, carrying huge amounts of cash is neither advisable, nor wise in the first place.

While many places have electronic POS, the phobia against international cards is widespread, and people will even lie to you that they don’t take them, rather than trying. According to some, shop and restaurant owners want to avoid cards, as they will get the money immediately with cash, as opposed to receiving it a few days later from the card companies.

Put into perspective, the idiocy of cash is obvious, though: I withdraw money from my account to get a pile of paper, that in turn I hand over to someone who will put it back into a bank account. In the process, both parties incur fees.

Like an increasing number of expatriates, I therefore do my best to avoid places that don’t take international cards, and to always insist on using cash only as a last resort.  At restaurants, that unfortunately means carrying cash as a backup in the way too likely event that the POS fails. At supermarkets, however, I am at liberty to leave the shopping basket behind, telling them that I’m going to their competitor, when they kindly request that I get cash from some nearby ATM. That also leaves them with the inconvenience of having to rush to put back all the fresh and frozen foodstuff that I had picked.

The most unbelievable such place, though, is Sony electronics store in the international zone at the Lagos airport!  “Heard that one before”, I thought to myself when the lady behind the counter looked at my Visa and claimed that they didn’t accept international cards.

Most of the time, I know I have to insist before they will even try.  Assuming that this was the case again, I kindly insisted, guessing she was simply under instructions to avoid such transactions to the extent possible.

Incredibly, she was actually telling the truth. After 3 attempts, I walked out of the shop, with the lady running after me: “Please, sir. Are you sure you don’t have Dollars? Euros? Even Naira?”

The best way of helping people learn, is to show them that they loose business by not taking international cards. If only the time wasted wasn’t such an inconvenience for me as well, it would be worth it.

The Lagos State Government should be commended for their visions to create a cashless economy. While I am hopeful that this will materialize in the mid to long term, I still see some definite potential for improvement in the short term results.

Categories:   Business, Technology