Empty Wallets, Queues in Banks as Nigerians Struggle Amid Cash Scarcity

Cash shortage has become a daily nightmare for Nigerians, disrupting lives and livelihoods. With limited access to physical currency, citizens face long queues at banks and ATMs, skyrocketing transaction costs, and an unreliable digital banking system, writes Festus Akanbi

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here are fears that the current cash shortage in the financial system may worsen the plight of ordinary Nigerians and constrain their capacity to do last-minute shopping, barely two weeks before the Christmas celebration.

Today, as Christmas approaches, the streets of major towns and villages in Nigeria are buzzing not with festive cheer but with palpable frustration and confusion. Long, winding queues snaked outside banks and ATMs, where tired citizens clutched their withdrawal slips, praying for the faintest chance of accessing their own money. Inside the banks, cashiers wore strained expressions, unable to provide answers to the increasingly desperate customers. Markets are eerily subdued as traders refused electronic transactions, demanding cash that seemed to have vanished into thin air. Families grappled with helplessness, unsure how to prepare for the celebrations, as the hope of a joyous Christmas dimmed under the shadow of financial chaos.

The problem of shortage of cash, however, took a dangerous trend with reports saying many hospital patients were left unattended as a result of their inability to provide cash for treatments. In many cases, and many parts of the country, patients have been left untreated in hospital while family and friends struggle to gather cash for their treatment and some women have been forced to give birth at home after being turned away.

The situation is believed to be worse in remote rural areas, where few people have access to bank accounts and mobile phone networks are poor. But in an economy in which only 45% of people have access to banking, according to the World Bank, shortages of cash have left many struggling to access their money.

SME Operators Feeling the Heat

In the ensuing confusion, frustration and disappointment came lamentations of promoters of Small and Medium Scale enterprises that the cash shortage is killing their businesses amid a drastic fall in sales.  A food business owner in Ogba, Lagos State, Mrs. Folashade Ogunremi told THISDAY last week that businesses have been dull as customer traffic has significantly gone down in the past few weeks. She explained that some customers have been forced to reduce spending having complained of difficulty in getting cash.

“To worsen the situation, it is increasingly expensive to get the needed cash for the purchase of all the ingredients for the food business especially with the bank apps behaving funny these days,” she said.

POS Agents Making Brisk Business

 However, the cash scarcity at commercial banks is driving businesses to Point-of-Sale (POS agents, who source cash from supermarkets, market people, and fuel stations. There are also speculations that some privileged few have a way of collecting cash from some syndicates in banks.

How does one explain the spraying of naira at social gatherings in flagrant disregard to the Central Bank of Nigeria’s ban of such abuse of the naira and at a period when many ATMs are no longer dispensing cash?

The growing reliance on POS agents has increased calls to regulate the agency banking business. In May 2024, the government ordered the 1.9 million POS operators to register with the Corporate Affairs Commission (CAC).

While the CBN has tried to wean Nigerians off their cash dependence to achieve a “cashless economy,” the governor said the regulator will provide adequate cash supply.

“The CBN will continue to maintain a robust cash buffer to meet the country’s needs, particularly during high-demand periods such as the festive season and year-end,” Olayemi Cardoso said. “Our focus is ensuring a seamless cash flow for Nigerians while fostering trust and stability in the financial system.”

Sources attributed the cash shortage to a lack of supply by the CBN and the fact that customers are taking their cash to POS instead of bringing it to the bank.

Deteriorating Services

The argument is that in the face of an acute shortage of cash and the call for cashless banking, one would have expected bank users to opt for online banking platforms if the banking applications of some of the leading operators had not been disappointing Nigerians. A few months after most banks claimed to have upgraded their digital infrastructure to serve their customers better, their services have deteriorated with users experiencing what appear to be the worst offerings seen so far.

It is now a daily experience for thousands of customers to resume at banking premises as early as 7 a.m. to register complaints about failed transactions. In one of such random checks by THISDAY last

 Wednesday, banking premises across the Lagos metropolis were crowd-packed with disgruntled customers who lamented about their personal and business losses to sluggish or compromised electronic channels. 

CBN Goes Tough on Defaulting Banks

Meanwhile, the CBN said it was ready to take action to address the cash shortage at ATMs. According to a recent memo, the apex bank said it would start to impose penalties on any commercial banks that fail to supply their ATMs and branches with cash starting from December 1.

“To address this, we are conducting spot checks across deposit money banks, and we will impose penalties on underperforming institutions,” he said.

He explained that the authorities encourage citizens to report any difficulties withdrawing money directly to the CBN through dedicated communication channels, adding that a large public awareness campaign will accompany these new measures. The truth is that up till now, no bank has been singled out for punishment while many banks’ ATMs remain dry.

Rationing

A market survey showed that in many parts of Lagos, Abuja and many other states, banks have resorted to rationing cash for disbursement for a couple of weeks now. The reality is that over-the-counter (OTC) services have not offered any solace with most banks restricting cash withdrawal per transaction to N10,000. This has triggered another round of cash scarcity across the country, pushing up agent banks’ charges by as much as 100 per cent or more in some cases.

As long queues return to the bank, reminiscent of December 2022 when Nigerians faced cash shortage as a result of the naira redesign policy which forced banks to reduce cash withdrawal limit, the Human Rights Writers Association of Nigeria (HURIWA) described the situation as a clear indication of a collapsing economy. The organisation criticised the inability of depositors to access their money in cash, labelling it an act of economic sabotage and evidence of dysfunction within Nigeria’s financial system.

HURIWA noted that the cash scarcity has left millions of Nigerians unable to carry out basic transactions, particularly in rural areas where electronic payment systems are unreliable or non-existent. The group highlighted the plight of small businesses, artisans, and daily wage earners, many of whom have been pushed deeper into poverty as a result of the crisis.

Regulatory Compliance

Despite its push for a “cashless” economy, the CBN acknowledges that the transition must be supported by measures to meet immediate cash needs. “The CBN will continue to maintain a robust cash offering to meet the country’s needs, particularly during high-demand periods such as the festive season and year-end,” Cardoso said.

However, banking industry affairs commentators said it is important for the apex bank to urgently confront the syndicates responsible for the diversion of cash from the banking halls and ATMs to PoS operators. According to critics, allowing the practice to continue will amount to rewarding criminality at the expense of hardworking Nigerians who are currently denied access to cash through banks.

Addressing cash scarcity ensures economic stability, social harmony, and sustained growth. Cash is a vital transaction medium, especially in cash-dependent sectors and among vulnerable populations. Prolonged scarcity disrupts businesses, hinders daily livelihoods, and fuels inflation, creating widespread hardships. Urgent intervention is necessary to restore confidence in the financial system, stimulate economic activities, and prevent potential unrest that may arise from prolonged