Nigeria is once again grappling with a situation many hoped to never revisit—cash scarcity.
The country experienced a similar ordeal in early 2023 when the then President Muhammadu Buhari-led administration introduced new naira notes and abruptly banned the old ones.
What followed was nothing short of chaos.
With old notes withdrawn and the new currency scarcely available, cash became a rare commodity, EKO HOT BLOG reports.
Point-of-Sale (PoS) operators capitalized on the crisis, charging exorbitant fees of over 15% for withdrawals.
Many small businesses, which had long relied on cash transactions, were forced to adopt cashless operations to survive.
Relief only came months later when the government reinstated the old notes alongside the new ones.
Fast forward to October 2024, rumours began circulating about a new deadline for phasing out the old naira notes, allegedly set for December 31, 2024.
Although unverified, these claims revived painful memories of the 2023 crisis, sparking widespread panic among Nigerians.
In response, the Central Bank of Nigeria (CBN) swiftly denied the rumors, clarifying that no such deadline existed.
The apex bank assured the public that the old notes would remain legal tender until they were naturally phased out.
This self-fulfilling prophecy has left PoS operators as the primary beneficiaries, with many increasing their fees drastically.
As of Tuesday, December 3, 2024, PoS operators were charging customers N300 for withdrawals of N10,000, a significant hike from the N100 charged previously.
EKO HOT BLOG observed that despite this reassurance, the public’s trust seemed shaken, as rumors of impending scarcity led many to hoard cash, creating an artificial shortage.
This self-fulfilling prophecy has left PoS operators as the primary beneficiaries, with many increasing their fees by 50-100%, further aggravating the situation.
The impact of the cash scarcity has been felt across all sectors. Traders and everyday Nigerians have shared their struggles on how the situation is crippling their businesses and daily lives.
Blessing Ijeoma, a vegetable seller in Lagos, lamented the difficulty in accessing cash for her daily transactions.
“I wake up as early as 5 a.m. to queue at the bank, but most times, I go home empty-handed. The PoS operators charge me N200 to withdraw just N1,000. It is eating into my profit, and I don’t know how much longer I can continue like this,” she said.
Similarly, Abdullahi Musa, a cab driver in Abuja, said the scarcity has severely affected his income.
“Most passengers now prefer cashless payments, but not everyone has internet banking or e-wallets. Some customers cancel trips if I insist on cash or if they can’t transfer. I’m losing money every day because of this.”
Maryam Abubakar, a trader in Kano, expressed her frustration with the PoS operators’ charges.
“They are charging more than double now. If I withdraw N5,000, I have to pay N1,000 as a fee. The money I make is barely enough to cover my family’s needs, and this cash scarcity is making it worse,” she said.
Amid the cash scarcity, the federal government has introduced a N50 fee on all transactions conducted through fintech platforms such as Opay, Moniepoint, and PalmPay.
This move, according to analysts, is further squeezing Nigerians who rely on these platforms for cashless transactions.
Chukwudi Okeke, a schoolteacher in Enugu, said, “I use Opay because it is faster than going to the bank, but now, they’ve added N50 to every transaction.
“It may not sound like much, but for someone like me who makes multiple transactions daily, it adds up quickly. It’s just another way to exploit us.”
An anonymous fintech operator in Ibadan described the charge as an additional challenge.
“Customers are angry and blaming us for the extra N50 charge. They don’t understand that it’s a government directive. This will discourage more people from using fintech services, especially when combined with the cash scarcity.”
In November, the CBN identified commercial banks as significant contributors to the ongoing cash scarcity, accusing them of hoarding cash instead of filling ATMs. The regulator issued strict orders for banks to ensure adequate cash distribution through their machines, warning of heavy fines for non-compliance.
However, Nigerians remain skeptical about these measures. Many believe the lack of trust in financial institutions is a key reason behind the recurring cash shortages. “We’ve heard all these promises before, but nothing changes. It’s just talk,” said a trader in Onitsha.
The cash scarcity is only one of many challenges facing Nigerians. Rising inflation, skyrocketing transportation costs, unstable fuel prices, and looming tax reforms have created a perfect storm of economic hardship.
For the average citizen, the question remains: where can they turn for relief in such dire times? As the crisis deepens, all eyes are on the government and financial institutions to deliver solutions that truly address the plight of the people.
Until then, Nigerians continue to navigate a harsh and uncertain economic sector.
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