A growing concern is gripping Nigeria as residents in major cities such as Lagos, Abuja, Kano, Katsina, Jigawa, Adamawa, and beyond are facing challenges withdrawing significant sums from their banks.
This escalating issue has sparked fears of a recurrence of the naira scarcity experienced during the currency swap.
Background:
Reports indicate that the cash scarcity has become particularly pronounced in Borno and Kano states as the December 31 deadline for the use of old N200, N500, and N1,000 banknotes approaches. This has prompted reactions from the Central Bank of Nigeria (CBN), which attributes the apparent cash shortage to high-volume withdrawals by Deposit Money Banks (DMBs) and panic withdrawals by customers from Automated Teller Machines (ATMs).
CBN's Response:
In response to the growing concerns, the CBN, through its Director of Corporate Communications, Isa Abdulmumin, assured the public that there is an ample stock of currency notes for economic activities in the country. Abdulmumin emphasized that both old and new banknotes remain legal tender until the stipulated deadline. The CBN has directed its branches nationwide to ensure the seamless circulation of cash.
Impact on Businesses:
The scarcity of cash is beginning to affect business transactions, especially in local markets where cash remains the preferred method of payment. Farmers, who have recently harvested their goods, are finding it challenging to sell their products as buyers and sellers encounter difficulties obtaining sufficient cash for transactions.
Public Response:
Residents across the country have reported challenges in withdrawing money from ATMs, leading to frustration and inconvenience. Traders and business owners are grappling with the limitations imposed on cash transactions, while some have resorted to offering rewards to attract physical cash.
The Role of Point of Sale (PoS) Operators:
With ATMs running dry, many individuals are turning to PoS agents for their financial needs. However, even PoS operators are facing challenges as they struggle to withdraw enough cash from their banks. Some operators have reported an increase in charges, and customers are experiencing delays due to the scarcity of physical currency.
Regional Variances:
The issue appears to be more pronounced in certain regions, such as the northern part of Nigeria, where cash transactions are prevalent. Farmers, middlemen, and traders are feeling the impact, with reports of some markets experiencing shortages of naira notes.
As the scarcity of naira notes persists, there is a growing need for comprehensive measures to address the challenges faced by individuals, businesses, and the broader economy. The CBN's assurances and directives are crucial in mitigating the impact of the cash shortage, but sustained efforts are required to ensure a smooth transition to the exclusive use of redesigned banknotes. The evolving situation calls for vigilance and cooperation from both financial institutions and the public to navigate these challenging times.
