The renewed cash scarcity in Nigeria is exacerbating the already severe economic hardship that citizens face, particularly the most vulnerable, highlighting an avoidable crisis.
Development Diaries reports that many Nigerians struggle to access cash, even after the Central Bank of Nigeria (CBN) ordered deposit money banks (DMBs) to guard against artificial cash scarcity.
The CBN outlined steps to increase cash availability in a circular dated 29 November that was co-signed by Acting Directors Isa-Olatinwo Aisha (branch operations) and Solaja Olayemi (currency operations).
The circular stated that the CBN warned of fines for non-compliance and instructed banks to guarantee effective cash disbursement through both automated teller machines (ATMs) and over-the-counter channels.
This disconnect between the CBN’s directives and ground realities raises questions about oversight and enforcement. Is this a repeat of the naira scarcity from December 2022 to March 2023?
We understand that the House of Representatives even recently called on the CBN to address the situation that has imposed significant hardship on Nigerians.
With cash withdrawal limits ranging from N5,000 to N10,000 for over-the-counter and ATM transactions at many bank branches, the situation has disrupted daily economic activities and left individuals struggling to meet basic needs amidst soaring inflation and high living costs.
The long queues at ATMs and limited cash disbursement by banks reflect a financial system under strain and require the intervention of the CBN.
Media reports have shown that many banks are not complying with these instructions, as customers have been complaining of failed ATM services and insufficient over-the-counter cash availability.
It is expected that the CBN will intensify its supervisory roles to ensure that banks comply with cash disbursement guidelines and mitigate the hardship faced by Nigerians.
Transparency from the CBN regarding the underlying causes of the cash scarcity is crucial. While some bank officials attribute the issue to limited cash supply from the CBN and declining deposits, the lack of clear communication from the apex bank has fueled uncertainty and frustration among the public.
The CBN needs to address this by providing an honest and comprehensive explanation of the cash crunch, along with detailed steps it is taking to resolve the crisis.
Development Diaries calls on the CBN Governor, Yemi Cardoso, to take immediate and decisive action against non-compliant banks to ensure adherence to the apex bank’s directive.
The CBN must go further by offering Nigerians a clear explanation of the root causes of the naira scarcity and outlining the specific measures being implemented to address the crisis. Transparent and regular updates on progress should be an integral part of this communication.
Also, the bank must ensure targeted interventions to support vulnerable populations, including low-income earners and rural dwellers, who are disproportionately affected by the scarcity.
Photo source: CBN
