CBN Fails To Stop Naira Scarcity In The North; Spreads To South

The Central Bank of Nigeria, CBN, has failed to stop the naira scarcity being experienced in some parts of the country despite its earlier promises.

Worried Nigerians told the magazine on Tuesday that the scarcity is gradually spreading across the country, and that the CBN seems not to have solutions to the problem.

In the last two weeks, the Yemi Cardoso-led CBN has assured Nigerians that there’s no need to panic because there’s enough cash in circulation to go around.

The apex bank had in its response to the scarcity in some parts of the north and Lagos early this month blamed the problem on the panic withdrawal by some commercial banks’ customers in anticipation of the festive period.

In a statement signed by the CBN spokesman last week, the apex bank had tried to address the problem, for instance, saying all banknotes issued by the bank remained legal tender.

The response came after reports suggested that the old naira notes are gradually being withdrawn by the CBN in anticipation of the December deadline set by the Supreme Court early this year.

Recall the Supreme Court ruled on March 3, 2023, that the old naira notes of N1,000, N500, and N200 were still legal against the CBN plan to withdraw the old banknotes from circulation to pave the way for new notes.

The apex bank however said in various statements that it has no such plans at the moment.

“The seeming cash scarcity in some locations is due largely to high volume withdrawals from the CBN branches by Deposit Money Banks (DMBs) and panic withdrawals by customers from the Automated Teller Machines, ATMs),” Isa Abdulmumin, the bank’s spokesman said in a statement six days ago.

“While we note the concerns of Nigerians on the availability of cash for financial transactions, we wish to assure the public that there is sufficient stock of currency notes for economic activities in the country. The branches of the CBN across the country are also working to ensure the seamless circulation of cash in their respective states of operation,” he stated.

The apex bank had earlier on November 1, 2023, issued a similar statement stating “unambiguously that every banknote issued by the Central Bank of Nigeria (CBN) remains legal tender and should not be rejected by anyone, as stipulated in Section 20(5) of the CBN Act, 2007.”

In spite of this, the situation, according to bank customers has remained the same and may get worse in the coming days as Nigerians move to conserve cash in order not to be stranded during the Christmas and New Celebrations.

According to reports from the northern part of the country, cash has become a very scarce commodity in major cities such as Kano, Maiduguri, Minna, Lafia, Yola, and Makurdi, amongst others.

Some traders who spoke on the issue said they have been unable to withdraw enough cash from commercial bank counters and ATMs in these cities in the last few days.

Those who have resorted to POS operators for cash withdrawal also have sad tales to tell, as the operators, who after increasing their charges by over 100 percent complained of the unavailability of naira notes.

The situation is also not different in Lagos where cash withdrawals from ATMs have been seriously reduced by all the commercial banks.

For instance, many Deposit Money Banks, DMBs in the state have limited ATM withdrawal to N10,000 from N20,000 which used to be the case.

The development has created more panic among customers who said the situation is likely to spread to other southern states in coming as the festive period approaches.

“The CBN must do more to assure Nigerians that the situation they experienced early this year will not be repeated. If this happens again, the economy that’s already struggling could collapse,” Ola Baro, a bank customer told the magazine on Tuesday.