CBN Takes Action as Cash Scarcity Grips Nigeria's Economy

 

By Joshua Omoniyi

 The Central Bank of Nigeria (CBN) has stepped in to address a growing cash scarcity that has left many Nigerians struggling to access their hard-earned money. In a circular issued on November 29, the apex bank mandated Deposit Money Banks (DMBs) to enhance cash availability at their branches and Automated Teller Machines (ATMs), effective December 1.

Understanding Cash Scarcity

Cash scarcity refers to a situation where individuals and businesses face significant challenges in obtaining physical currency. This phenomenon can lead to economic stagnation, impacting everyday transactions and the overall financial health of a nation. For many Nigerians, the inability to withdraw cash has become a daily struggle, forcing them to navigate a labyrinth of banking limitations and operational inefficiencies.

The CBN's new directive emphasizes efficient cash disbursement both over-the-counter and through ATMs. The circular, signed by Solaja Olayemi and Isa-Olatinwo Aisha, highlights the bank's commitment to improving currency circulation and ensuring compliance among financial institutions. 

Public Frustration and Real-Life Struggles

The measures come at a time when citizens are growing increasingly frustrated with the banking system. Reports of long queues, withdrawal limits, and empty ATMs are rampant. Louisa, a retiree and customer of the United Bank for Africa (UBA), shared her experience: “Last week, I queued for hours at the bank only to be told I could withdraw just ₦20,000. The next day, it had been reduced to ₦10,000. I had no choice but to plead with the teller for more.”

The situation is equally alarming for Point-of-Sale (POS) operators, who are heavily reliant on cash transactions. Blessing Ogo, a POS operator in Abuja, expressed her concerns: “We often have to bribe bank officials to get cash, and even then, the amounts are insufficient. A withdrawal of ₦20,000 used to cost ₦300, but now it’s between ₦500 and ₦600. Customers blame us, but the banks are the real problem.”

**Addressing the Crisis**

The CBN's new initiative includes dedicated hotlines and email addresses for Nigerians to report cash dispensing challenges at banks and ATMs. The apex bank encourages affected individuals to provide specific details about their experiences, including the bank name, branch location, and time of the incident. This feedback mechanism aims to help the CBN identify and resolve issues that hinder cash availability.

However, the effectiveness of these measures remains uncertain. Many Nigerians suspect that inefficiencies and potential malpractices within the banking system are exacerbating the crisis. Allegations of cash hoarding by bank officials have surfaced, with claims that some prioritize their associates or relatives for cash access, leaving others in the lurch.

**The Bigger Picture**

As the festive season approaches, the urgency to resolve these cash shortages intensifies. Families and businesses rely on cash transactions for holiday preparations, and the current scarcity threatens to dampen the festive spirit. The CBN’s commitment to oversight and compliance is crucial, but it must be paired with tangible actions that restore public trust in the banking system.

The CBN's actions represent a critical step towards stabilizing the financial landscape in Nigeria. However, for many citizens, the challenge of accessing cash remains a daily reality, reflecting broader issues of economic management and systemic inefficiencies. As the nation grapples with these challenges, the hope is that swift and effective solutions will emerge to restore confidence and ease the burden on Nigerians.

In the coming weeks, the effectiveness of the CBN's directives will be tested. Will these measures alleviate the cash scarcity that has stifled economic activities? Only time will tell, but for now, the struggle for cash continues for many across Nigeria.