Nigerians groan as Naira scarcity persists nationwide

A few days into the Christmas and New Year festivities, Nigerians are once again grappling with a shortage of Naira notes. Despite assurances from the Central Bank of Nigeria (CBN) regarding the availability of currency notes, the resurgence of Naira scarcity, akin to the cash crunch experienced in December last year and the first quarter of 2023 due to the failed Naira redesign policy, is beginning to impact Nigerians significantly.

As of Monday, Automated Teller Machines (ATMs) of Deposit Money Banks (DMBs) in various parts of the country are either not dispensing cash or are witnessing long queues. DMBs have imposed maximum withdrawal limits ranging from N20,000 to N50,000, and transaction fees through Point-of-Sale operators (PoS) have doubled due to the scarcity.

Despite the CBN attributing the Naira scarcity to panic withdrawals by Deposit Money Banks (DMBs) from various CBN branches, it insists there is no actual scarcity and that the economy has an adequate supply of currency. However, the prevailing situation contradicts the CBN’s assertion.

Dr. Uju Ogunbunka, the President of the Bank Customers’ Association of Nigeria, dismissed the CBN’s explanation as meaningless and emphasized the real scarcity of Naira in the country. He urged the CBN to fulfill its mandate by printing more currency to facilitate transactions.

Elegede Segun, the secretary-elect of the Mobile Money and Agent Banking industry in Nigeria, highlighted that PoS operators were severely affected by the Naira scarcity, resulting in increased charges to avoid losses. Banks’ cash withdrawal limits and scarcity-induced self-help measures among the public have contributed to the challenges faced by PoS vendors.

Renowned economist Prof Segun Ajibola criticized the CBN’s reason for the Naira scarcity, urging the regulator to diagnose and address the problem swiftly to prevent counterfeiters from taking advantage.

Mr. Idakolo Gbolade, CEO of SD & D Capital Management, attributed the Naira scarcity to communication issues between the CBN, DMBs, and the public. He emphasized the need for improved communication from the CBN to assure Nigerians that there is no reason to hoard Naira notes.

The Naira redesign policy implemented from December 2022 to February 2023 led to a cash crunch until the Supreme Court extended the deadline to December 31, 2023, and later vacated the extension following a federal government request.