Naira Crisis Worsens as Cash Withdrawals Hit Limit in Banks

The naira scarcity in the country has become more severe as banks have imposed restrictions on cash withdrawals, according to Daily Trust investigations.

Customers in Lagos, Abuja, Kano, Katsina, Jigawa and Adamawa and other parts of the country have complained about their inability to withdraw large amounts of cash from their banks, creating panic and affecting business activities in local markets, especially in the northern part of Nigeria where cash transactions are preferred over bank transfers.

Daily Trust had reported on November 1 that cash shortage had resurfaced in Borno and Kano states as the deadline for the use of the old N200, N500 and N1,000 banknotes approaches.

The Central Bank of Nigeria (CBN) had announced in March that the old banknotes would remain legal tender alongside the redesigned banknotes until December 31, in compliance with the order of the Supreme Court.

The CBN had attributed the cash scarcity in some locations to high volume withdrawals from its branches by deposit money banks (DMBs) and panic withdrawals by customers from the automated teller machines (ATMs).

The CBN had assured the public that there was enough stock of currency notes for economic activities in the country and that its branches across the country were working to ensure the smooth circulation of cash in their respective states of operation.

The CBN had also reiterated that both old and new notes remained legal tender and should not be rejected by anyone, as stipulated in the CBN Act, 2007.

However, our reporters across the country have observed that the naira crisis has persisted, as traders, farmers and other economic agents have been reluctant to accept bank transfers or old banknotes for their goods and services.

This has affected the flow of business in major village markets in Kano, Katsina, Jigawa, Adamawa, Kaduna and Taraba, where farmers have brought their harvests for sale.

However, merchants who came from the towns to buy the commodities have been mostly stranded as middlemen struggle to get cash for them. POS operators in such markets have also confirmed the shortage of cash.

In Katsina, some traders who brought cattle from the villages for sale had to return home with their animals because they wanted cash, which was not available.

 A POS operator in Kongolam, a border town with Niger Republic, said he had run out of cash and that some people had credited his account with millions of naira and had been on the queue for over weeks, receiving cash in bits. He said he was not an economist but he believed that the CBN should do something to address the situation.

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