Nigeria Grapples with Christmas Naira Shortage

Ikenna ChurchillDecember 18, 20231 Mins read277

In a concerning development just days into the Christmas and New Year celebrations, Nigerians face a resurgence of Naira scarcity despite assurances from the Central Bank of Nigeria (CBN). Similar to the cash crunch experienced in December last year and the first quarter of 2023 due to the failed Naira redesign policy, the shortage is now impacting ATMs and transactions across the country.

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

The CBN attributes the Naira scarcity to panic withdrawals from various CBN branches by Deposit Money Banks (DMBs). However, the reality on the ground contradicts CBN’s assertion that there is no scarcity of Naira.

Dr Uju Ogunbunka, President of the Bank Customers’ Association of Nigeria, expressed scepticism about CBN’s explanation, emphasizing the real scarcity of cash in the country. He called for the CBN to print more currency to address the issue.

Elegede Segun, the secretary-elect of the Mobile Money and Agent Banking industry in Nigeria, highlighted the impact on PoS operators, stating that they have hiked charges to avoid running at a loss due to the scarcity.

Renowned economist Prof Segun Ajibola faulted CBN’s reasoning for the Naira scarcity, urging the regulator to diagnose and swiftly address the issue to prevent counterfeiters from taking advantage of the situation.

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

This scarcity is a reminder of the challenges faced during the Naira redesign policy and raises concerns about effective communication and management of liquidity in the system.