News

Anxiety as Naira Scarcity returns amid Supreme Court deadline

Anxiety as Naira Scarcity returns amid Supreme Court deadline

As the December 31 deadline for the use of the old N200, N500 and N1000 banknotes approaches, scarcity of cash has been noticed in Kano and Borno states, Daily Trust can report.

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

The former governor of the CBN, Godwin Emefiele, had, in October last year, unveiled plans to redesign the N200, N500 and N1,000 notes and advised citizens to deposit their old notes before January 31, 2023, as they would cease to be legal tender thereafter.

This resulted in a cash crunch nationwide in February, leaving citizens stranded. The situation led to protests and attacks on banks in some cities across the country.


The Supreme Court later, on March 3, extended the legal tender status of the old N200, N500, and N1,000 notes to December 31.

Two months before the deadline, business communities in Kano and Borno states say they are grappling with cash scarcity.

A CBN official, who sought anonymity, told Daily Trust that there was no plan to “phase out the old notes”.

A Point of Sales (PoS) operator in Kano, Abdullahi Usman, said banks only allowed withdrawals of between N40,000 and N50,000 daily for individuals and N150,000 to N200,000 for corporate entities.

According to him, he gets his cash supply from the markets where cash transactions usually take place.

“As a PoS operator, I can’t give more than N20,000 to individuals because most banks only allow us to have N40,000 to N50,000 daily. I learnt that only owners of corporate accounts can get N150,000 to N200,000. If you go around town, you will find out that most of the PoS centres now have less cash compared to some weeks ago,” he said.

He said the approaching CBN’s December deadline had made many people deposit their money in banks to avoid being trapped after December 31.

Another PoS operator, Bello Shehu, said he had since resorted to accessing cash from fuel stations instead of the banks because they (banks) don’t usually have enough cash to give to customers.

“I get my cash from fuel stations because the cash we get from the banks nowadays is limited and can’t cater for our customers’ demands,” he said.

Although there were no long queues at most bank ATMs, it was observed that most of them were not dispensing cash.

A shop owner at Hotoro in Nassarawa Local Government Area of Kano, Muhammed Gambo, said he had not been able to access cash from ATMs in recent times.

Similarly, a civil servant with the Kano State Government said he did not get cash from six ATMs he checked to withdraw his October salary.

He said he resorted to PoS, where he was able to get only half of what he needed.

In Maiduguri, Borno State, the cash crunch is biting hard on residents, traders and banks, as most transactions can only be done with limited cash.

It was gathered that cash scarcity at PoS centres and banks in the capital city had forced many to do online transactions.

Cash was not available in most of the ATMs and PoS visited, while limits were set for customers that had access to cash.

A staff of one of the first-generation banks in Maiduguri said his bank set a withdrawal limit of N20,000 for customers owing to the shortage of naira notes.

He said sometimes, his bank would not get cash for two weeks from the CBN.

He said he also observed that customers had stopped depositing money in the bank.

“Surprisingly, you will give customers cash every day, but no cash deposit is coming. We learnt that some agents mop up cash from traders and filling stations in town,” he said.

A PoS operator, Yapa Moses, stated: “We now have to book money from traders around us and give them a small amount. We no longer rely on banks to get cash because you can visit five ATM points without getting cash.”

A customer, Inusa Salihu, said he visited eight PoS points along the Maiduguri by-pass to withdraw cash but could not get it.

“I had to drive to Baga Market and plead with the PoS operator to give me N10,000 because he already set a limit of N5,000,” he said.

A Bureau de Change operator at the popular Sheraton Road, Wuse Zone 4 Abuja, Bala Gidado, confirmed that the naira had been scarce for the past few days.

Speaking to Daily Trust, he said: “Banks have started mopping up cash, and it could be because of the December deadline for the expiration of the old notes.

“I went to the bank today to get cash; I couldn’t get what I wanted. Naira is now very scarce and we don’t understand what is happening again.”

Another BDC operator, Ibrahim Hayatu, noted that the scarcity of Naira began last week but got worse this week.

“The issue of naira scarcity started last week, but this week, we can’t see it even if you go to the bank; it’s a problem. Today, I had to ask my colleagues before I got N500,000,” he said.

However, Daily Trust observed that there was no scarcity of cash in Lagos and other southern states.

Checks at most of the ATMs showed that cash was available and business transactions were going smoothly.

Several businessmen and women who spoke to Daily Trust in the southern states, said they had not observed any shortage of banknotes.

A public affairs analyst in Akwa Ibom, James Usoro, said the CBN must make a pronouncement on the legality or otherwise of the old notes to address any misrepresentation.

“The judgement was explicit that both bank notes should coexist until December 31. However, the CBN has the final say on this and should come out with a position,” he said.

The Director, Corporate Communications, CBN, Isa Abdulmumin, neither answered phone calls nor replied to messages sent to him seeking the apex bank’s comment on the situation.

But a top official of the CBN told the newspaper that both old and new banknotes remained legal tender, telling Nigerians not to exercise any fear about the December 31 deadline.

“They are all legal tender. Nigerians should continue to spend them. There is no need to exercise fear about the deadline,” he said.

He hinted that the old notes would not be phased out on December 31.

“We won’t want Nigerians to undergo similar pain as they experienced earlier this year. The phasing out of the old notes will be gradual. It won’t be rushed,” he assured.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button