Cash Scarcity Loom as Deadline Nears for Old Naira Notes
As the December 31, 2023 deadline for the withdrawal of old Naira notes approaches, reports of cash shortages have surfaced in some regions of the country. In March 2023, the Supreme Court extended the legal tender status of old N200, N500, and N1000 banknotes until the end of this year, in response to nationwide cash shortages and protests leading up to the February 2023 elections. With just two months left, residents of Kano and Borno states are reportedly facing difficulties in accessing sufficient cash, even though statistics from the Central Bank of Nigeria show record-high money supply (M3) in the country.
Cash Shortages and Challenges:
According to reports, Point of Sales (POS) and Bureau de Change (BDC) operators have expressed concerns about the scarcity of cash. Some of them mentioned limitations on daily cash withdrawals, with most banks allowing only N40,000 to N50,000 for PoS operators. This has resulted in individuals struggling to access sufficient cash for their transactions. While the M3 money supply is at an all-time high, the scarcity of cash on the ground indicates a distribution challenge.
Central Bank’s Response:
According to report, Newsmen reached out to Isa Abdulmumin, CBN’s acting director of the corporate communications department, for clarification and insights into the steps taken to address this issue. However, there was no response from the CBN at the time of filing this report. The CBN has a critical decision to make regarding the phase-out of old Naira notes, as new notes are not yet well-circulated.
As Nigeria approaches the deadline for the withdrawal of old Naira notes, ensuring a smooth transition and addressing cash shortages will be pivotal. The CBN will need to take measures to facilitate the circulation of new notes and maintain an adequate supply of cash to meet the needs of the public. The challenges posed by cash scarcity in the run-up to this deadline highlight the importance of effective monetary policy and cash management.