Dons Eze
CONCERNS OVER CASH SQUEEZE IN STATES DESPITE INCREASED CBN SUPPLY
There is rising complaints by bank customers and Point of Sale (POS) operators in some states across the country over alleged cash squeeze just as citizens try to meet their increasing demands for notes especially as yuletide shopping begins.
The states where these concerns are being raised include Bauchi, Borno, Kaduna, Kano, Kebbi, Taraba, as well as some satellite towns of the Federal Capital Territory (FCT).
The scarcity, which has lasted over a week in the reported states, is coming amidst data from the Central Bank of Nigeria (CBN), revealing that the total currency in circulation has reached N4.14 trillion, with N3.87 trillion of this amount currently outside the banking system.
The recent CBN data indicates that 93.34 per cent of the nation’s currency is in the hands of individuals and businesses, while only 6.66 per cent remains within the banking sector.
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The gap between currency outside banks and the total currency in circulation suggests that Nigerians, especially those living in the northern part of the country, still heavily rely on cash for daily transactions, despite the rise of digital banking services.
Also, the CBN data revealed that currency in circulation in Nigeria has added N1.48 trillion or 55.8 per cent Year-on-Year (YoY) to N4.14 trillion as of August 2024, from N2.66 trillion in August 2023.
Cash squeeze pronounced in the North
Findings revealed that the northern states are mostly affected by the current scarcity largely due to the onset of harvest and the fewer numbers of financial institutions in the rural areas of the North.
Findings by our reporters in Borno State indicate that some businessmen buying up grains on a large scale were said to be mopping up cash.
A POS operator, Hamza Abdullahi, said operators no longer get the required cash in banks, therefore, depend on traders and petrol stations.
Hamza attributed the scarcity to the harvest and yuletide period that is fast approaching.
He said: “Traders are busy buying the new harvests and to do this, they need cash because farmers in our rural areas do not use electronic payment channels. Some do not even have bank accounts”.
He said many people are also buying goats and other animals that are transported to the South ahead of Christmas, adding that these are largely cash transactions contributing to the scarcity.
He said for N50,000, POS operators now charge N1, 000 as against N500 previously.
Kano
Abubakar Sadiq Danzaria, said POS operators are milking customers, raising charges because of the scarcity.
Another POS operator in Rijiyar Zaki Motor park, Adamu Salisu, who said he visited Guaranty Trust Bank (GTB) in Murtala Mohammed road said, “Banks give only N50,000 a day and that is not enough to cater to the needs of our customers. Therefore, we source the cash from traders or filling stations.”
On his part, the chairman of Singer Market Development Association (SIMDA), Alhaji Junaidu Muhammad Zakaria, agreed with the POS operators that cash scarcity exists.
Speaking, a businessman, Muntari Aliyu said: “if you go to the rural markets, you can withdraw N3 million from the POS operator. They have the cash.
“People there don’t do business with our modern means of transactions; they don’t trust it that’s why they are not taking the money to the bank. It’s not in circulation the way it should”, he said.
Abdullahi Haruna, a grain merchant said it was tough for him to get N10 million that he needed to visit the grains market in Sumaila, on Wednesday.
“I had to use traders at the ‘Yankura and other markets in the Kano metropolis. This took me more than one week,” he said.
Zainab Almu, an entrepreneur, said the cash scarcity is as a result of the harvest season, and not necessarily a policy matter.
“Farmers who are bringing the grains from the villages are still sceptical about bank transfer. They want to collect their money in cash and go back home.
“There is the need for more sensitisation in this part of the country. Again, some of them have been duped in the past, especially during the cash crunch ahead of the 2023 elections.
“Many of them lost their fortunes because they received fake credit alerts from some dubious Nigerians. A lot of sensitisation must be done to convince such people to trust the system again,” he said.
She said she has accounts in Access, Zenith and GT banks. “All the banks are facing some challenges of notes. When you go to withdraw, there is limit to what they will give you,” she said.
