As the festive season approaches, Nigeria is on the brink of a cash scarcity as reports emerge of commercial banks hoarding Naira notes.
AFRIPOST gathered that this potential shortage has caused concern among consumers and businesses alike.
Nigerians are now anticipating an increased demand for cash in the weeks leading up to Christmas and New Year celebrations.
According to industry sources, many banks have begun holding back cash reserves to manage their supply ahead of the anticipated surge in withdrawals typical of the holiday season.
The strategy, reportedly aimed at maintaining liquidity, has already created a noticeable slowdown in the circulation of physical cash, particularly in densely populated States such as Lagos, Abuja, Port Harcourt, Kaduna, Kano, and Delta, among others, where demand tends to rise sharply during the festive season.
Customers in various parts of the country have voiced frustration over limited access to cash, with ATMs often dispensing reduced amounts or remaining out of service.
Some bank branches have even implemented withdrawal limits or restricted large cash withdrawals for individual customers.
Many Nigerians rely heavily on cash transactions for holiday shopping, travel expenses, and celebrations, making the shortage especially challenging.
One Lagos-based customer expressed concern, saying, “It’s becoming harder to withdraw money from ATMs. I tried several times this week, and most machines were empty or dispensing small amounts. With Christmas coming, it’s going to be even tougher.”
Economic experts suggest that the scarcity could lead to higher service fees and possible price hikes for essential goods and services as cash-dependent businesses seek alternative methods to cope with lower cash availability.
Additionally, analysts predict a ripple effect in rural areas, where digital payment systems are less accessible, making cash even more crucial for daily transactions.
The Central Bank of Nigeria (CBN) has not yet issued a formal response to these reports but has previously warned banks against practices that could lead to cash hoarding or artificial shortages.
In an attempt to manage cash flow and curb inflation, the CBN has been gradually reducing the supply of physical currency while promoting digital payment methods as a long-term solution.
However, many Nigerians remain reliant on cash, especially for small transactions and in areas with limited banking infrastructure.
As Nigeria prepares for the end-of-year festivities, there are calls for the CBN to intervene and ensure banks release adequate cash supplies to the public.
Failure to address the situation could lead to significant challenges for consumers and businesses alike, potentially dampening the holiday spirit and creating further strain on Nigeria’s economy during a typically high-spending period.
