As the Christmas and New Year celebrations approach in Nigeria, the nation grapples with another wave of Naira note scarcity, despite assurances from the Central Bank of Nigeria (CBN) regarding adequate currency availability.
Similar to the cash shortage experienced last December and in the first quarter of 2023 due to the failed Naira redesign policy, the resurgence of Naira scarcity is causing hardships across the country. Automated Teller Machines (ATMs) in many areas are either not dispensing cash or witnessing long queues. Deposit Money Banks (DMBs) have set withdrawal limits between N20,000 to N50,000, while Point-of-Sale (PoS) transaction fees have doubled due to the scarcity.
The CBN attributes the shortage to panic withdrawals by DMBs from its branches, maintaining that there’s no actual scarcity. However, the public’s experiences contradict the CBN’s stance.
Dr. Uju Ogunbunka, President of the Bank Customers’ Association of Nigeria, dismissed the CBN’s explanation, stating a tangible scarcity exists. He criticized the CBN, urging them to fulfill their mandate by providing more banknotes.
Elegede Segun, the secretary-elect of the Mobile Money and Agent banking industry in Nigeria, highlighted how PoS operators were severely impacted by the scarcity, resulting in increased fees to prevent losses.
Renowned economist Prof. Segun Ajibola faulted the CBN’s reasoning, emphasizing the need for the regulator to identify and address the root cause to prevent exploitation by counterfeiters.
Mr. Idakolo Gbolade, CEO of SD & D Capital Management, attributed the scarcity to communication gaps between the CBN, DMBs, and the public. He urged the CBN to assure Nigerians and manage the circulation of currency effectively.
Previously, the Naira redesign policy in 2022 caused a cash crunch until the Supreme Court intervened. However, hoarding of cash due to uncertainty about the policy’s enforcement still affects the current scarcity.
