Fresh Cash Scarcity Hits Nigerian States – Key Areas Affected
Naira scarcity has resurfaced in several Nigerian states, despite increased supply efforts by the Central Bank of Nigeria (CBN). Over the past week, the shortage has been particularly severe in northern regions, affecting daily transactions and causing frustration among residents.
Affected States
The states grappling with significant cash shortages include:
- Bauchi
- Borno
- Kaduna
- Kano
- Kebbi
- Taraba
- Some satellite towns in the Federal Capital Territory (FCT)
The cash shortage is impacting various sectors, causing a rise in transaction costs and disruptions to local economies.
Causes of the Cash Scarcity
- Increased Currency in Circulation
According to recent data from the CBN, currency in circulation reached ₦4.14 trillion in August 2024, with ₦3.87 trillion outside the banking system. This is a sharp increase from ₦2.66 trillion in August 2023—a 55.8% Year-on-Year rise. Yet, despite this high circulation, access to cash remains problematic, especially in rural and northern regions. - High Demand for Cash Transactions
The scarcity is exacerbated by the strong preference for cash in agricultural transactions. Farmers and traders, especially in rural areas, often lack access to electronic payment systems, leading to high demand for physical cash. Recent reports indicate that many businessmen are purchasing grains in bulk, hoarding cash for these transactions, which strains the supply. - Seasonal Transactions
As Christmas approaches, transactions involving livestock, particularly goats, are increasing. These are predominantly cash-based, with animals transported from the North to the South for festive celebrations. This seasonal spike in cash demand is contributing to the overall shortage.
Impact on Local Transactions
- POS Operators Struggle
Many Point of Sale (POS) operators in affected states report difficulties in accessing cash from banks, forcing them to rely on traders and petrol stations. Charges have also risen due to the scarcity, with fees for a ₦50,000 withdrawal doubling from ₦500 to ₦1,000. - ATM and Banking Limitations
ATM terminals in these states are either not dispensing cash or have significantly reduced limits, ranging from ₦20,000 to ₦50,000 per day. Banking halls are not faring much better, with limited cash available for over-the-counter transactions.
Response from Authorities
Attempts to get an official statement from bank officials and the CBN’s Acting Director of Corporate Communications, Hakama Sidi, were unsuccessful, as calls and messages went unanswered.
The current situation underscores persistent challenges in ensuring stable cash flow in Nigeria, despite official efforts to bolster currency supply. It remains to be seen how the CBN and other financial institutions will address the growing concerns as the holiday season approaches.
Stay tuned to Naija News for updates on the cash scarcity and other financial developments in Nigeria.
