Inside Nigeria: Details Emerge As Money Scarcity Worsens

VAM News November 14, 2023 in Business Tagged ATMs, banks, Money, Nigeria - 2 Minutes

Naira scarcity is biting harder across the country as banks have limited cash withdrawals.

Residents of Lagos, Abuja, Kano, Katsina, Jigawa and Adamawa and in other parts of the country are expressing concerns over their inability to withdraw huge cash in their banks, raising fears of scarcity as experienced during the naira swap.

This has also affected business transactions in local markets, especially in the northern part of Nigeria where buyers and sellers prefer to deal in cash instead of bank transfers.

Voice Air Media had, on November 1, reported that cash scarcity had resurfaced in Borno and Kano states as the December 31 deadline for the use of the old N200, N500 and N1,000 banknotes draws nearer.

The report had forced the Central Bank of Nigeria (CBN) to explained that “The seeming cash scarcity in some locations is due largely to high volume withdrawals from the CBN branches by Deposit Money Banks (DMBs) and panic withdrawals by customers from the Automated Teller Machines, ATMs).”

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The CBN, through its Director, Corporate Communications, Isa Abdulmumin, added, “While we note the concerns of Nigerians on the availability of cash for financial transactions, we wish to assure the public that there is sufficient stock of currency notes for economic activities in the country. The branches of the CBN across the country are also working to ensure the seamless circulation of cash in their respective states of operation.”

The CBN had announced in March that in compliance with the order of the Supreme Court, banknotes remained legal tender alongside the redesigned banknotes until December 31.

Last week, the apex bank reassured that both old and new notes remained legal tender and urged Nigerians to continue transacting using them.

“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,” Abdulmumin had said in the statement.

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He had added that branches of the CBN across the country had been directed to continue to issue different denominations of old and redesigned banknotes in adequate quantities to deposit money banks for onward circulation to bank customers.

Scarcity persists

But checks by our reporters across the country revealed serious scarcity of the naira amid reluctance by traders, farmers, among others to release their wares even when prospective buyers are willing to make bank transfers.

At prominent village markets in Kano, Katsina, Jigawa, Adamawa, Kaduna and Taraba, lack of cash is affecting businesses.

This is at a time when farmers have harvested their goods and taken them to market hoping to sell.

However, merchants who trooped to such markets from the towns to buy the commodities have been mostly stranded as middlemen scramble to get cash for them.

POS operators in such markets also confirmed shortage of cash.