In a recent interview with The PUNCH, ASSBIFI President Olusoji Oluwole highlighted the critical implications of the current cash shortage, particularly given the upcoming holiday season, which traditionally witnesses a significant increase in cash transactions for both consumer spending and commercial operations. He noted that this cash scarcity has been ongoing since the naira redesign.
Commercial banks obtain cash primarily from two sources: the Central Bank of Nigeria and retail outlets. The CBN's provision of cash has proven insufficient to meet banking needs, while the practice of retailers selling cash at a premium introduces further complexities to banks' access to liquidity.
Oluwole observed that the central bank's failure to meet banks' cash demands has enabled retailers to profit from cash sales instead of redepositing funds into the banking system. He further noted that the upcoming Christmas season will exacerbate this cash shortage at ATMs and bank branches due to increased consumer demand for cash for shopping and other commercial activities.
He provided data indicating that banks need at least N20 million daily to function, with ATMs requiring around N8 million each and N4 million for over-the-counter transactions.
He emphasized the critical need for the Central Bank of Nigeria (CBN) to provide precise cash circulation data to optimize distribution efficiency.
Our priority is not speculative trading, as was the case last year, but rather the development of effective solutions. A key element of this is the availability of accurate CBN statistics to facilitate a comprehensive understanding of cash circulation and its distribution.
Mr. Oluwole championed a transition to reduced cash dependence, emphasizing the superior cost-effectiveness, security, and efficiency of a cashless economy. He noted that a cashless economy demonstrably surpasses cash-reliant systems, citing global evidence.
Moreover, the ASSBIFI President called upon law enforcement to address illegal currency exchange activities. He emphasized that the sale of cash or discounted currency for profit is unacceptable and prohibited.
He called on authorities to investigate allegations of point-of-sale operators purchasing cash from fuel stations and supermarkets.
Oluwole emphasized that no bank deliberately limits customer cash access. He clarified that banks do not intend to restrict customer access to cash, explaining that it is financially unsound for a bank to withhold cash reserves; however, disbursement is limited by available funds.
Furthermore, Oluwole noted that, given the ongoing cash shortage, stakeholders are requesting the CBN to act decisively to mitigate the challenges faced by both financial institutions and the public.
Additionally, Emmanuel Onwubiko, the National Coordinator of the Human Rights Writers Association of Nigeria, criticized the CBN and its Governor, Olayemi Cardoso, for their poor management of monetary policy, attributing the resulting widespread hardship to their actions.
He emphasized that the scarcity of cash has left millions, particularly in rural areas, unable to perform transactions, further pushing small businesses, artisans, and daily wage earners into deeper poverty.
Long lines at banks and ATMs have become commonplace across the country, leaving depositors unable to access their funds even when their account balances are adequate, he noted.
Onwubiko argued that the current crisis reflects not only flawed monetary policy but also deeper systemic issues within the Nigerian economy. He urged President Bola Tinubu to take immediate action to stabilize the banking sector and avert an economic recession.
Furthermore, the group petitioned the National Assembly to hold the CBN Governor accountable for the current circumstances and to guarantee effective oversight.