Nigeria faces a prolonged cash shortage, and the Central Bank of Nigeria (CBN) is taking action. The CBN will penalize commercial banks that fail to provide cash to customers at their ATMs and branches. This move aims to address the ongoing challenges Nigerians face when trying to access cash.
At the annual bankers’ dinner in Lagos, CBN Governor Olayemi Cardoso announced that penalties would begin on December 1, 2024. He also explained that the CBN will conduct spot checks across banks to ensure compliance. Customers should report any issues with cash withdrawals directly to the CBN using designated channels.
CBN’s Commitment to Improving Service Delivery
Governor Cardoso emphasized the importance of regulatory compliance by all stakeholders, including mobile money operators and agents. He stated that these steps are essential for promoting digital transactions and improving overall service delivery. Financial institutions found guilty of malpractice or sabotage will face severe penalties.
While the move to penalize non-compliant banks aims to ease the cash shortage, the CBN is also encouraging digital transactions. The push for a “cashless economy” has gained momentum but continues to face challenges.
Cash Shortage in Nigeria
The ongoing Nigeria cash shortage began in 2023 after a controversial currency redesign. The failed project caused a cash crisis, especially at ATMs and banking halls. Additionally, a policy that capped weekly withdrawals at ₦500,000 worsened the situation. Many Nigerians now struggle to access cash when needed.
The shortage has led people to turn to Point of Sale (POS) agents, who have become a crucial cash source. These agents now get cash from supermarkets, fuel stations, and market vendors. As a result, many are calling for better regulation of the POS sector to ensure its transparency.
Government Measures to Combat Cash Shortage
To address the growing cash dependency, the government ordered 1.9 million POS operators to register with the Corporate Affairs Commission (CAC). This move aims to bring more regulation and oversight to the agency banking business, which has helped bridge the cash gap.
The CBN has not abandoned its goal of achieving a cashless economy. Governor Cardoso reassured the public that the bank would maintain a robust cash buffer to meet Nigeria’s needs. This will include ensuring enough cash is available during high-demand periods like the festive season and year-end.
CBN’s Focus on Trust and Stability
The CBN’s focus is to ensure smooth cash flow for Nigerians while maintaining trust and stability in the financial system. Governor Cardoso stressed that the central bank will monitor the situation closely and adjust policies as needed to ensure the country’s cash needs are met.