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Cash Crunch Continues Despite Circulation of N3.3 Trn

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The Central Bank of Nigeria (CBN) has again assured members of the public that it is addressing the reported cases of cash scarcity in some major cities across the country.

The apex bank said that currency in circulation as at December 11, 2023, stood at N3.4 trillion, well above the N1 trillion as at February 2023.

This is as the naira scarcity bites harder in different parts of the country leading to significant increase in charges by Point of Sale (POS) operators by as much as 500 per cent.

The CBN attributed the current situation to the hoarding of the Naira by some persons due to challenges experienced during the Naira redesign project.

The bank’s acting director in charge of corporate communications, Mrs Hakama Sidi Ali gave the latest assurance in a statement she issued yesterday in Abuja.

She said the CBN was monitoring the situation and had released sufficient cash to its branches across the country for onward distribution to Deposit Money Banks (DMBs).

Giving further clarification on the cases of hoarding, Sidi Ali explained that currency in circulation as of February 2023, was N1 trillion, while that figure had risen to over N3.4 trillion as of December 11, 2023. This, according to her indicated that there was sufficient cash in circulation, except that the cash was in the hands of individuals who were apprehensive due to their previous experiences.

Ali empathised with Nigerians, over their previous and current experiences, but insisted that the CBN had adequate cash to meet the day-to-day transaction needs of Nigerians. She, therefore, appealed to Nigerians to be patient while the CBN does the needful to ensure the availability of cash, particularly during the yuletide and beyond.

While also urging Nigerians to continue to accept all Naira banknotes for their daily transactions, Sidi Ali reiterated the Bank’s earlier call to the public to embrace alternative modes of payment, e-channels, to reduce pressure on the use of physical cash.

Meanwhile, as the cash scarcity continues to linger, , POS operators in Kano State have increased charges on transactions made using the PoS machine to deposit or withdraw cash.

The operators blamed the increase on inadequate cash supply from banks to keep their businesses running, as some of them said they go extra mile or visit some business organisation such as petrol stations, pure water factory or bakery to gather cash for business.

Most banks across the state have limited withdrawal on the counters, especially on huge amount, making it difficult for the PoS operators to have access to large cash.

A POS operator along Gayawa Road in Kano, Mrs. Monica told LEADERSHIP that, the charges went up as a result of the difficulty she undergo before getting cash for her business.

She explained that, “I’m always begging for cash from a pure water factory down the road. Sometimes I get from them while sometimes I don’t get especially at month end when the manager pays his staff salary.

“I charge N100 on transactions less than N5000; N150 for transactions above N5000 to N10,000.

Mrs. Monica also added that, anytime she doesn’t have enough cash, she also limit the cash she give to her customers which is not more than N10,000 at a time, noting that, someone would not mind coming to withdraw all that she has.

Another Operator at the Audu Bako Secretariat, who didn’t want her name in print, explained that her charges for N10,000 is N200 unlike the N100 they used to charge. According to her, having access to cash in the bank has become a big challenge to their business, as such, getting it in a hard way necessitated the increase in charges.

Also, a PoS Operator along Airport Road, Mal. Sani Mohammed told this reporter that, he gets cash from a fueling station where he has to tip them sometimes or make deposit for them free of charge in order to have cash for business.

He added that, the stress and the risk with how things are expensive, he can no longer collect N100 for N10,000 as it could not meet his needs.

A resident of Kano Joseph Yakubu, told LEADERSHIP that the reason for the cash Scarcity could be as a result of the inflation being witnessed in the country, saying, “most commodities are almost times two of their prices. He said “earlier this year, if you want to buy a carton of spaghetti it is around N6000, now it’s around N13,000; this means when you want to withdraw from the bank you will have to withdraw double to meet your needs, that’s why the cash is not enough maybe,” he said.

Despite the ongoing cash scarcity and rationing by banks, some traders in Lagos are refusing to accept electronic transfers due to network issues and a lack of trust in the system.

This is creating additional challenges for both businesses and consumers.

The News Agency of Nigeria (NAN) surveyed major markets throughout Lagos, finding that many traders, especially those involved in petty businesses, are wary of accepting electronic payments due to frequent network delays and failures. These delays and failures often result in lost sales and frustration for both the buyer and seller.

Fatima Tunji, a corn seller, shared her experience with a recent failed transfer, highlighting the impact on her business. “I sold corn to a customer for N500, and they said they would transfer the money. The transfer was delayed for a long time and then failed. I lost out on the profit, and the customer couldn’t get their money back. It was very frustrating.”

Ufuoma Nnaji, a roasted yam and plantain seller, shared a similar experience. She recounted being duped by a fake transfer alert and has since refused to accept any electronic payments. “I only accept cash now, especially since I don’t have an Android phone to check my balance. The best I can do is use a POS operator, but the customer has to pay the charges.”

The survey also found that cash remains scarce in most banks across Lagos. Many banks have several ATMs, but only one or two are dispensing cash. The withdrawal limits are also low, with non-account holders limited to N5,000 and account holders limited to N10,000.

This cash scarcity has led to increased reliance on POS operators, who are also facing challenges. They are struggling to keep up with the demand for cash and have had to increase their charges. Hakeem Dosunmu, a POS operator in Ajao Estate, shared his experience.

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