Cash Scarcity: Nigerians Decry Hardship As Banks Limit Withdrawals

In Nigeria, cash is more than a means of payment, it is a lifeline. It fuels daily transactions, from purchasing groceries to paying for transport. Yet, a cloud of uncertainty hangs over the nation’s financial system as cash scarcity continues to frustrate citizens despite the Central Bank of Nigeria’s (CBN) recent intervention.

The CBN’s circular, dated November 29, 2024, instructed Deposit Money Banks to improve cash disbursement through Automated Teller Machines (ATMs) and over-the-counter services. Signed by Acting Directors Solaja Olayemi and Isa-Olatinwo Aisha, the directive warned of penalties for non-compliance. The CBN even released contact details for customers to report issues. But weeks later, Nigerians still endure long queues and limited cash withdrawals.

“I was told to come back later after waiting for hours at the bank,” lamented Oluwaseyi Oluwalade, a resident of Isolo, Lagos State. He added, “I couldn’t withdraw from the ATM, and when I tried a PoS operator, they asked for a transfer first. It took me a whole day to get the cash.”

The situation paints a grim picture of Nigeria’s cash availability. While the CBN insists that banks should ensure proper cash flow, reports suggest some banks are rationing cash, citing insufficient supply from the apex bank. Citizens and experts alike are now questioning the true cause of this persistent cash crunch.

What is Cash Scarcity in Nigeria?

Cash scarcity occurs when people are unable to access adequate physical cash from ATMs, bank counters, or Point-of-Sale (PoS) operators. It disrupts daily activities, especially in cash-dependent communities where electronic payments are limited. This scarcity has worsened since the controversial naira redesign policy of 2023, which saw old notes withdrawn without sufficient replacement.

In Lagos, a PoS agent ,Adeniyi Samuel, revealed that cash dealers now dominate the market. “Many PoS operators rely on petrol stations and private cash dealers because banks don’t give us enough cash,” he said. “The banks themselves have limited cash to load ATMs or pay customers directly.”

The frustration is echoed across the country. Tunde Ajiboye shared his experience of making multiple trips to banks and ATMs. “I was only able to withdraw N20,000 from a GTBank ATM, then had to go to Lotus Bank for another N30,000,” he said. “It’s like a treasure hunt for cash every day.”

The cash scarcity is not limited to Lagos. From Delta to Abuja, Ilorin to Owerri, citizens report similar challenges. The daily reality of standing in long queues only to withdraw meagre amounts — sometimes as low as N5,000 — has become the new normal.

How Much Cash Can Nigerians Withdraw Amid Cash Scarcity?

While the CBN’s directive suggested the availability of cash, Nigerians report a wide variation in withdrawal limits across banks and states.

At United Bank for Africa (UBA) in Abuja, customers can only access N20,000 over the counter. At Zenith Bank it’s the same story. A Zenith Bank official stated, “It’s N20,000 maximum. The ATM also dispenses only N20,000 at a time.”

The reality is worse in some states like Abia, where customers can only withdraw between N5,000 and N20,000. Non-customers using the ATM are sometimes limited to just N5,000. Similarly, residents in Kwara State report that banks pay N10,000 over the counter, while PoS operators now charge higher fees.

READ ALSO: Cash Scarcity: CBN, Banks, PoS Operators Trade Blame

“It’s getting worse,” said Ibrahim Taiwo. “I used to pay N100 to withdraw N5,000 at a PoS, but now it’s N150 or N200. PoS operators are raising their charges because they also pay more to get cash from the banks.”

This chain reaction of charges trickles down to everyday Nigerians, raising questions about the integrity of cash distribution channels.

CBN’s Role and Allegations of Bank Sabotage

Some Nigerians believe that banks are deliberately hoarding cash for high-net-worth clients. A source within the CBN alleged that “some banks prioritise wealthy customers and provide them with bulk cash at the expense of ordinary Nigerians.”

This claim is supported by a Polaris Bank staff member in Lagos, who said, “The problem started with the naira redesign policy. Old notes were destroyed, but we didn’t have enough new notes to replace them. People are afraid to deposit their cash, fearing another redesign.”

The CBN, however, maintains that banks must comply with the cash disbursement directive. Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali, did not respond to questions from journalists. Nonetheless, the apex bank insists that penalties will be imposed on erring banks.

Meanwhile, some citizens blame businesses like petrol stations, supermarkets, and large-scale traders for hoarding cash. According to the National President of the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), Fasasi Atanda, these businesses are “hoarding cash and selling it to cash dealers.”

“There is no reason for cash scarcity if there are no saboteurs,” said Atanda. “These cash dealers buy cash in bulk and sell it. Supermarkets, petrol stations, and traders are guilty of this.”

Atanda called on the CBN to make PoS operators official cash distribution agents to improve access to cash. “We agents only charge for the cost of data and transportation. If the government absorbs this cost, we can offer free services,” he said.

What Experts Say About Cash Scarcity

Experts believe that addressing cash scarcity requires transparency and a review of cash flow policy. Dr. Adebayo Lawal, an economist at Obafemi Awolowo University, criticized the CBN for not planning ahead.

“The naira redesign was supposed to promote a cashless economy, but it backfired,” Dr. Lawal said. “There’s a culture of cash-dependence in Nigeria, and if you want to change that, you need to provide alternatives. The CBN failed to consider this.”

Another expert, Mr. Emmanuel Eze, a financial analyst, believes that the CBN needs to work more closely with PoS operators. “The PoS system is closer to the people,” he said. “If the CBN can engage them officially, it will reduce the stress Nigerians face daily in search of cash.”

Professor Grace Ijoma, a banking and finance lecturer from University of Abuja, blamed poor coordination between commercial banks and the CBN. “The banks don’t get enough cash from the CBN, and the little they get is rationed to customers,” she noted. “Banks should be more transparent about how much cash they receive.”

How Nigerians Are Coping With Cash Scarcity

The hardship caused by cash scarcity is evident in the daily experiences of Nigerians. From Abuja to Lagos, ordinary citizens have been forced to develop new survival tactics. Some now rely on electronic payments, while others form alliances with PoS operators to get cash faster.

For Oluwaseyi Oluwalade in Akure, it has been a long, stressful period. “I spend hours looking for cash,” he said. “The stress is just too much. I can’t transfer to every vendor I buy from. It’s frustrating.”

Adeniyi Samuel, a PoS agent, has resorted to alternative sources of cash, but the fees have increased. “We are paying more for cash, and that’s why we have to charge customers more. We are not the cause of this problem, but people blame us,” he lamented.

For many Nigerians, the hope is that the CBN will impose its promised penalties on banks hoarding cash. Without it, cash scarcity may persist, creating further hardship in an already fragile economy.

Cash scarcity has grown from a simple inconvenience to a national crisis. While the CBN has issued directives and set up complaint channels, Nigerians still struggle to access their own money. With experts calling for better regulation, citizens hope the CBN will take more decisive action. As the crisis unfolds, Nigerians continue to adapt, finding creative ways to survive in a cash-starved economy.

For now, one thing is certain: until cash flows freely again, life for the average Nigerian will remain a daily struggle for survival.