Despite recent assurances from the Central Bank of Nigeria (CBN) that there is enough naira in circulation, reports of scarcity have surfaced in various parts of the country. A survey conducted by SPRINGNEWS confirmed scarcity in Abuja, Lagos, Kano, Kwara, Gombe, Edo, Sokoto, and Ekiti States. Both bank customers and Point of Sales (PoS) operators expressed their concerns, stating that accessing cash for economic activities has become increasingly challenging.
This situation arises weeks after the CBN affirmed the availability of sufficient currency notes in the market, discouraging panic withdrawals. In a circular titled ‘All Banknotes Issued by the CBN Remain Legal Tender,’ the bank emphasized that every banknote issued by the CBN remains legal tender and should not be rejected by anyone. The circular also addressed concerns over the legality of old naira notes, stating that they remain legal tender as per the CBN Act, 2007.
The public’s worry regarding the legality of old naira notes is linked to issues surrounding the naira redesign policy announced by former CBN governor Godwin Emefiele in October 2022. The plan aimed to redesign some naira denominations (N200, N500, and N1000 notes) and reduce currency circulation. However, this policy faced resistance, leading to legal challenges and an extension of the validity of old notes until December 2023.
Despite recent attempts by the CBN to extend the validity of old N200, N500, and N1,000 notes indefinitely, the scarcity of cash has resurfaced, especially in Lagos. Reports indicate empty ATM galleries and banking halls, with some customers claiming restrictions on cash withdrawals.
The scarcity extends to other states like Abuja, Kano, Kwara, Sokoto, and Ekiti. Some commercial banks are reported to be rationing cash, with limitations on daily withdrawals ranging from N10,000 to N20,000. Bankers attribute the scarcity to weak supply from the CBN and a decline in customers depositing cash.
In response to the scarcity, PoS operators in Gombe and Edo States have expressed concerns about limited access to cash. Some report relying on traders in the market for cash transactions, while others have increased charges due to the challenges they face.
The Bank Customers Association of Nigeria, represented by its president, Dr. Uju Ogunbunka, stated that members have not reported issues with cash withdrawals. However, concerns about a potential shift towards encouraging online banking and the need to explore alternative payment channels have been raised by industry experts.
Despite CBN assurances of ample currency in circulation, the persistence of naira scarcity raises questions about the effectiveness of current monetary policies and calls for increased efforts to provide viable alternatives to cash transactions.