In spite of recent assurances from the Central Bank of Nigeria (CBN) regarding the adequacy of naira in circulation, reports of scarcity have surfaced nationwide.
A survey conducted on Wednesday confirmed shortages in various parts of Abuja, Lagos, Kano, Kwara, Gombe, Edo, Sokoto, and Ekiti States. Many bank customers and Point of Sale (PoS) operators expressed concerns about the increasing difficulty in accessing cash for their economic activities.
This development follows the CBN’s recent affirmation of sufficient currency notes in the market, urging the public not to engage in panic withdrawals. In a circular titled ‘All Banknotes Issued by the CBN Remain Legal Tender,’ signed by the Director of Corporate Communications, Isa AbdulMumin, the CBN acknowledged reported cash shortages in major cities. It emphasized that all CBN-issued banknotes remain legal tender, discouraging rejection as stipulated in Section 20(5) of the CBN Act, 2007.
The CBN cautioned against panic withdrawals, assuring the public of ample currency notes to facilitate normal economic activities. The concerns raised by the public regarding the legality of old naira notes are linked to the ongoing issues surrounding the CBN’s naira redesign policy.
Former CBN governor Godwin Emefiele had announced a plan in October 2022 to redesign some naira denominations and reduce currency circulation, with the old versions losing legal status by January 31, 2023. However, after legal challenges, the Supreme Court invalidated the policy in March 2023, extending the validity of the notes until December 2023.
The CBN recently announced plans to further extend the validity of old N200, N500, and N1,000 notes indefinitely. The central bank is working with relevant authorities to address the existing court ruling on this matter.
Despite the CBN’s assurances, reports of cash scarcity have emerged in various locations. In Lagos, some banks are dispensing only N5,000 via ATMs to non-customers, with complaints of empty ATMs and a bank staff member attributing the scarcity to a weak supply from the CBN.
Similar scenarios have been reported in Abuja, Kano, Kwara, Sokoto, Ekiti, and other states, where banks are rationing cash to customers, limiting daily withdrawals, and facing challenges in meeting withdrawal demands.
In Gombe, Point of Sale operators expressed concerns about the sudden difficulty in accessing cash, leading some to rely on traders for cash transactions. In Edo, POS operators, store owners, and bank customers lamented their inability to obtain sufficient cash.
While the Bank Customers Association of Nigeria and the Association of Mobile Money and Bank Agents in Nigeria have not reported widespread issues with cash withdrawals, concerns persist among the public regarding the ongoing challenges in accessing physical currency.