Ahead of the Christmas and New Year festivities, shortage of cash has again hit Nigerians across the country.
Residents of the Federal Capital Territory (FCT), and environs, who spoke to reporters decried the development.
This comes despite revelation by the Central Bank of Nigeria (CBN) that a significant N3.87 trillion remains outside the banking system.
The data suggest that 93.34% of Nigeria’s currency is controlled by individuals and businesses, with only 6.66% circulating within the formal banking sector, highlighting the continued reliance on naira note despite the rise of digital banking services.
Local markets are also experiencing difficulties, as many vendors still prefer naira note transactions over digital payments, with farmers in rural areas particularly hesitant to trust electronic transfers due to past issues with fraudulent credit alerts.
The National Secretary of the Association of Point of Sale, POS, users in Nigeria (APOSUN), Isah Zakari, in a recent statement, said there were lots of factors causing cash shortage.
While heaping the blame on commercial banks, he absolved POS operators.
According to him, in December 2023, the banks reduced the amount of cash withdrawals for their agents.
He also alleged that most POS outlets are owned by bankers, adding that what they do is to remove the money that is supposed to circulate within the banks for customers to cash and turn it to their POS outlets.
“As an individual, let me not speak as a POS operator. If I need N50,000, I have to go to the ATM to withdraw and when I go to the bank, I also have the right to withdraw. It is my right because I paid the money there.
“So now, the POS operator wants to use money in the bank, but he does not get it. At ATM points, limits on withdrawals have been placed; he cannot get more than N10,000 or N20,000.
“Our members have been complaining, saying the only amount of money they can withdraw is N10,000,” he said.
Zakari noted that their investigation revealed that bankers normally sold cash to POS operators, stressing that the entire thing could be tied to the neck of dubious bank managers.
According to him, in addition to the naira shortage in Nigeria, Niger Republic is short of their currencies, thereby using naira as their alternative currency.
“This may go on until the country (Niger) fully secures its autonomy from France,” he said.
In the same vein, some banks within the FCT and its environs still have their limits on the amount of cash customers can withdraw from Automated Teller Machines (ATMs), even long after the festive season.
POS operators said they were now forced to source cash from traders and petrol stations, as banks struggled to meet demand, saying the development had caused POS fees to surge, as they now charged N1,000 for transactions of N50,000, compared to N500 previously.
According to them, some banks were offering as little as N50,000 per day, forcing them to rely on alternative sources of cash.
At Nyanya, an outskirt of the Federal Capital Territory, businesses are struggling with limited access to cash, and POS operators said they were only able to withdraw N20,000 from ATMs, affecting day-to-day transactions.
Similarly, Mararaba, an FCT suburb domiciled in Nasarawa State, has faced difficulties, with operators unable to withdraw sufficient amounts for their businesses, leaving them unable to serve their customers.
At Lugbe, airport road in the FCT, the situation is the same, with some customers complaining of network glitches at several banks, which they said have contributed to the limited cash supply, while some are receiving only N10,000 at a time from banks.
Decrying their experiences while speaking to reporters, the residents said not so much had changed from what the situation was the last yuletide.
An entrepreneur, Mr John Otafu, said things were just being more difficult, noting that customers could only withdraw a maximum of N10,000 at some ATM points, while many ATMs were empty.
“You will just see that you are moving from one point to another, looking for a working ATM to collect your money.
“The condition is still not pleasant, and this has forced many people to be patronising POS operators,” Otafu said.
A food vendor, Titilayo Abayomi, said she now kept her naira note to herself and was no longer saving in the bank because getting cash to use for business had remained difficult.
“I go to the ATMs to get a little amount of money, which is way below what I need to run my business. Imagine that you need N100,000 and you’re told you cannot get more than N5,000 or N10,000.
“The banks are just gaining from innocent Nigerians who are labouring tirelessly to feed themselves,” she said.
A businessman, Abdul Saheed, said he had devised a means out of the situation by patronising filling stations instead of bothering himself going to ATM points.
Saheed said in a generalised term that ATMs were no longer functioning.
Also speaking on the situation, a civil servant, who pleaded anonymity, lamented how frustrated he was having to move from one ATM point to another only to discover that he could only withdraw N1,000 from the last machine he got to.
He wondered why Nigerians must be subjected to so much stress from the banks, while POS operators always had naira note to trade with.
However, speaking to reporters on the condition of anonymity, two bank officials said the POS operators should be held responsible for the scarcity.
The bank officials alleged that some of the operators had multiple accounts and ATM cards, thus moving from one point to another to withdraw all the cash meant for everyone.
The official added that the practice was for banks with enough cash to circulate to others in the same area, but that the situation had changed.
“It is even better that Nigerians are crying out because the problem does not lie with the banks.
“Banks have to place limits on withdrawals to curb the activities of POS operators who empty ATMs and also withdraw via the counters.
“The banks distributing the cash to other banks would first protect their interest and those of their customers and thus release a little cash to other banks,” one of the officials said.
The other bank official said cash was in short supply during the festive period because many people were stacking cash at home, leaving the banks with very few currencies to serve others.
“There is a limit to cash supply. Cash must not be in excess and it must not be in short supply. CBN has a ratio of the cash it must keep but what is happening in Nigeria is peculiar.
“When CBN releases money, lots of people hoard the cash, which is called cash hoarding. While some do so out of fear, others do it for political reasons.
“Nigerians have a Korean cash mentality. So you will be surprised that some of them have cash stacked in their houses.
“CBN is saying we have printed our quota, but where is the cash? So, it is not the CBN’s fault and neither is the banks’ fault too,” he added.
The official said ATMs were supposed to run 24 hours but POS operators move from one ATM point to another, withdrawing to the very last naira note.
To mitigate the situation, the bank official said that banks had to set limits to what can be withdrawn per day, in cash and from individuals’ accounts.
“But what do the POS operators do? They open multiple accounts and have multiple cards,” said the official.
The official further revealed that traders in markets and POS operators now have a kind of partnership through which they exchange cash.
“The market woman no longer brings lots of cash to the bank. A POS operator simply goes to the market every evening to take up all the cash she has.
“Then in the morning, the market woman turns to the POS operator for cash or sends her customers to use the POS nearby to get cash for their trading activities.
“This is how cash is not even entering the banking system. That is why we don’t have issues like in 2023 because the market now self-regulates itself,” said the official.
The banker advised Nigerians to do more electronic transfers, use more cards, and depend less on cash.
“Even in the UK, you don’t go around with £5,000 or even £1,000 cash. But in Nigeria, going home on a weekend, you want to go with N50,000 or N100,000 cash as a backup. What are you afraid of?
“I think the more people embrace the cashless policy, the better we get used to the fact that you can transfer and it will go. And if there is a dispensing error, it will definitely be reversed,” he said.
On excessive bank charges, he said the public had failed to understand the workings behind what he called a structural maintenance charge for banks and a system maintenance charge.
“The fact that your account is on goes into your books, while the cost of diesel also goes into your books.
