Nigerians Lament as Fresh Cash Scarcity Hits 3 States, PoS Operators Speak
- Nigerians are reporting cash scarcity again, a few weeks after CBN assured of enough supply
- Some banks' ATMs are either not dispensing or have limited withdrawals to N5,000.
- PoS operators also confirmed that they have challenges accessing cash at the ATMs and across-the-counter
Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.
Point of Sale (PoS) operators have lamented the resurgence of cash scarcity across Nigeria despite the Central Bank of Nigeria (CBN) assurances that it has enough cash in its vaults.
On Wednesday, November 22, 2023, feelers showed that scarcity resurfaced in parts of Abuja, Lagos, Kwara, Gombe, Edo, Skoto, and Ekiti.
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CBN assures of enough cash in the system
The development comes weeks after CBN revealed in a circular that it has enough notes in the market and no need for panic withdrawals.
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The apex bank said in the circular that it was aware of the reported scarcity of cash across the major cities.
The bank said:
“For the avoidance of doubt, while reiterating that there are sufficient banknotes across the country for all normal economic activity, we wish to state unambiguously that every banknote issued by the Central Bank of Nigeria (CBN) remains legal tender and should not be rejected by anyone, as stipulated in Section 20(5) of the CBN Act, 2007.”
PoS operators lament the difficulty in accessing cash
Some PoS operators who spoke to Legit.ng on Thursday, November 23, 2023, confirmed slight challenges in accessing money from ATMs and across the counter.
A PoS operator in the Iju Ishaga area of Lagos named Yetunde Ganiyu said she got cash from a First Bank branch at Fagba but that the bank limited withdrawals to N5,000 per session.
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She said:
“I think there is some scarcity because the ATM, which usually dispensed N10,000 per session, now allows customers to withdraw N5,000 at a time.”
Punch reports that a staff of one of the top-tier banks in the Palmgrove area of Lagos said customers were not allowed to withdraw more than N20,000 across the counter, stating that the bank was experiencing scarcity.
Residents of Abuja also lamented the scarcity of cash across the metropolis, stating that most banks give system downtime as an excuse for not dispensing cash.
Kano, Abuja, other states report cash scarcity
In Kano, some banks have reportedly refused to honour customer withdrawal requests, while some ATMs are without cash.
Findings showed that the few commercial banks paying customers have put withdrawal limits.
Analysts say the CBN is trying to control inflation by restricting the cash supply.
Cletus Ibeh, a banker and economist, said that the Central Bank of Nigeria may secretly try to control inflation by withholding cash.
Ibeh said:
“Remember that currency in circulation has returned to its pre-naira redesign stage. So, there is excess liquidity in the system, and we know that excess liquidity means high inflation.”
According to him, CBN may have postponed the Monetary Policy Committee (MPC) meeting, which was expected to announce a new rate to tame inflation. If it increases rates again, it might spell doom for many, he added.
Ibeh said:
“Any hike in interest rate will deal a heavy blow to the economy. So, I am sure the CBN is trying some internal mechanisms first before announcing a new rate, and one of such could be to mop up cash from the system.”
Messages to Isah AbdulMummin, CBN's Director of Communications, seeking the bank's response, were unanswered when filing this report.
"December deadline": Reactions trail CBN's fresh order on withdrawal of old naira notes
Legit.ng earlier reported that the CBN announced on Monday, November 13, 2023, that it had reversed the December deadline for withdrawing old naira notes from circulation.
The declaration meant old N200, N500, and N1,000 notes would remain legal tender alongside the newly redesigned notes until they gradually faded from circulation.
However, some financial experts have said that the CBN order contravened the Supreme Court directive.
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Source: Legit.ng
