Nigeria’s Central Bank (CBN) has attributed the recent cash scarcity across the country to large cash withdrawals by commercial banks from its branches. This has resulted in banks imposing withdrawal limits and Point-of-Sale (PoS) operators increasing their charges by 100%.
PoS operators, struggling to access cash through traditional banking channels, are resorting to buying cash from traders and petrol station attendants, reminiscent of the pre-naira redesign era. This has forced them to double their charges, from N100 to N200 for a N5,000 withdrawal.
Mike Oyewole, a PoS operator in Lagos, lamented the situation:
“We queued at ATMs for over an hour before getting any cash. Only four out of eight ATM points were dispensing. We’re now back to patronizing petrol attendants and traders like earlier this year.”
The CBN maintains it has enough cash in circulation, blaming the scarcity on commercial banks. Former Director of Communications, Isha Abdulmumin, stated on November 2nd, 2023, that the CBN has sufficient cash to meet the needs of Nigerians.
Following a Supreme Court ruling, the CBN directed banks to re-issue and accept old naira notes. This directive came after the apex court ruled that the old N200, N500, and N1000 notes remain legal tender alongside the redesigned versions.
The CBN further clarified its stance on the legal tender status of old notes:
“For the avoidance of doubt, the Supreme Court ordered that the old versions of N200, N5,000, and N1, 000 banknotes shall continue to be legal tender, alongside the redesigned versions,”stated Sidi Ali, Hakama, Acting Director of Corporate Communications.
However, the cash scarcity has worsened since the CBN’s statement, with long queues at ATMs becoming a familiar sight. Additionally, speculation suggests Nigerians might be hoarding cash due to the initial December deadline imposed by the Supreme Court for the old notes’ circulation (later extended).
The CBN reiterated its commitment to addressing the cash scarcity issue. In a statement on November 14th, 2023, the bank confirmed that old naira notes would remain legal tender indefinitely. This announcement aimed to dispel rumors and uncertainties surrounding the currency exchange.
The CBN also encouraged Nigerians to utilize alternative payment methods, such as e-channels, to reduce dependence on physical cash. This move aims to alleviate pressure on cash reserves and promote a more digital financial ecosystem.
The situation remains fluid, with Nigerians grappling with the inconvenience of cash scarcity and PoS operators adjusting their charges to compensate for their challenges. The CBN’s efforts to address the issue and promote alternative payment methods are crucial in ensuring financial stability and a seamless transition to a more digitalized economy.