The widespread cash scarcity has invariably exacerbated the economic hardship in the country. The situation has led to astronomical increase in the prices of essential goods and services. Sadly, Over-the-Counter (OTC) services and Automated Teller Machines (ATMs) have not offered any solace with most banks limiting cash withdrawal per transaction to N10,000. In addition to the cash crunch, banks’ charges have risen to 100 per cent or more in some cases. This is coming less than two weeks to Christmas.
The cash crunch has left millions of Nigerians stranded and unable to carry out essential transactions. It is also having its toll on all businesses – small, medium and large alike – as well as on daily wage earners and vulnerable groups. Even the recent threat by the Central Bank of Nigeria (CBN) to sanction any erring bank has not made any difference. Let the CBN increase its oversight functions over the banks and end the harrowing cash squeeze. In one of its circulars, the apex bank urged bank customers who are unable to access cash from the banks through OTC and ATM platforms to report to it using designated channels and formats. Similarly, the House of Representatives has called on the CBN to urgently address the naira scarcity.
Despite these interventions, the situation has not significantly improved. Furthermore, the commercial banks are yet to upscale their capacity to service the fast-growing population of online banking customers in the country. Data from the Nigeria Interbank Settlement System (NIBSS) showed that cashless transaction in the country rose by 84.37 per cent to N572.63trillion in the first seven months of 2024. This means that customers are fast embracing digital banking.
The CBN and the commercial banks should work in concert to resolve the current cash crunch instead of trading blames. The CBN had, last week, accused some banks of favouring high-end customers by giving them bulk cash at the expense of ordinary Nigerians. It also blamed the cash shortage on the redesigned naira policy under the former CBN Governor, Godwin Emefiele, alleging that his policy destroyed old banknotes and failed to replace them with adequate new notes. On the contrary, the Association of Senior Staff of Banks, Insurance, and Financial Institutions (ASSBIFI) has blamed the situation to the inability of the CBN to meet the cash demands of commercial banks.
A statement issued by the President of the association, Mr. Olusoji Oluwole, said banks in the country have only two primary sources of cash – the CBN and retailers. He claimed that the CBN has not fulfilled its own role of providing sufficient cash to banks in recent months, while retailers are reported to be selling cash for profit. These allegations are weighty enough to be thoroughly investigated.
Although we are operating a cashless economy, it does not mean that the economy should be subjected to the cash crunch being experienced by Nigerians. With millions of Nigerians still outside the banking system, most of our business transactions are still cash based. Moreover, millions of Nigerians in the rural areas depend so much on cash for their businesses and services. Is the naira redesign programme still on course? When shall we have uniform banknotes in circulation instead of the present confusing old and new banknotes?
The cash crunch should not be allowed to linger any further. The scarcity of the naira will likely worsen the economic hardship in the country if the government fails to address it frontally. Nigerians had this type of experience last year. This development has clearly shown that the naira redesign policy was poorly implemented. The chaos in the financial services sector can hardly be explained. We urge the CBN to quickly address the naira scarcity forthwith. Depositors’ inability to access their money underscores a glaring dysfunction within the banking industry. Besides, security agencies should apprehend those behind illegal currency trading, as well as investigate activities of Point-of-Sale (PoS) operators.
While we urge the CBN to do the needful and restore confidence in the banking system and reduce the economic hardship in the country, commercial banks must realise that they are first and foremost, financial intermediaries that supply services to customers, businesses, households and governments. These are contractual obligations that must not be compromised. Nigeria is already in dire economic straits with no solution yet in sight. The banking industry should not compound the problem. Let the regulatory authorities ensure availability of cash in all commercial banks nationwide.