As the festive season approaches, Nigerians are once again grappling with a severe cash shortage. Despite the Central Bank of Nigeria (CBN) reporting that over N3.87 trillion remains outside the banking system, the scarcity has deepened, leaving many across the Federal Capital Territory (FCT) frustrated.
The data reveals that 93.34% of Nigeria’s currency is controlled by individuals and businesses, with only 6.66% circulating within the formal banking sector. Despite the growing trend of digital banking, cash transactions remain dominant, especially in local markets, where vendors prefer cash over electronic payments. Rural farmers also continue to avoid electronic transfers, citing concerns over fraud.
POS operators have shifted the blame to commercial banks, with Mr. Isah Zakari, National Secretary of the Association of Point of Sale (POS) Operators in Nigeria (APOSUN), accusing banks of reducing cash withdrawals for POS outlets. Zakari also claimed that many POS operators are unable to access sufficient cash, with some ATMs limiting withdrawals to as low as N10,000 or N20,000.
Furthermore, some banks are alleged to sell cash to POS operators, which could be contributing to the shortage. Zakari pointed to the high demand for cash during the holiday season, further exacerbated by the scarcity of currency in neighboring Niger Republic, where the naira is being used as an alternative currency.
With limited cash available, POS operators have had to rely on alternative sources, including traders and petrol stations, pushing up transaction fees. For instance, withdrawing N50,000 now incurs a fee of N1,000, up from N500 previously.
Residents in areas like Nyanya and Mararaba in the FCT have reported long lines at ATMs, with many machines empty or only dispensing N10,000 at a time. Entrepreneurs and food vendors have voiced their frustrations, with some turning to POS operators for cash, while others like Abdul Saheed have resorted to petrol stations to avoid ATM queues.
While POS operators blame banks for the shortage, some bank officials allege that POS operators are hoarding cash by opening multiple accounts and withdrawing large sums to sell to traders. They also suggest that cash hoarding by individuals has compounded the issue, with many people keeping large amounts of cash at home rather than depositing it in banks.
Despite the challenges, bank officials stress that electronic transactions and card payments should be prioritized to alleviate the cash crunch. They also acknowledged the financial strain on banks due to infrastructure and maintenance costs.
As Nigerians continue to struggle with limited access to cash, it remains unclear whether the issue will improve in time for the festive season or persist into the new year.
