Cash crisis: Nigerians gnash their teeth, buy naira from market women
Contrary to earlier thoughts that after the presidential election, naira crunch will begin to ease, it seems the squeeze is getting unbearable.
Otherwise, fact check revealed that access to cash has shifted from PoS operators to market women who now sell naira at a high rate to Nigerians in tight corners. It was learnt that it now costs about N4,000 to buy N10,000 and in some cases, N5,000 to buy N10,000 depending on locations.
The new way of buying naira in many parts of the country is to enter any market and bargain with market women to mop up their sales of the say and make transfers to their account while they hand over their daily sales to you.
However, situations where the transfer failed, the PoS are invited to process the transfer while the market woman hands over the cash to the buyer.
Meanwhile check across parts of Lagos on Monday and early Tuesday showed that many banks’ ATMs are not in serviced and those actually in service are not loaded with cash.
Only recently, the CBN said the total amount of currency-in-circulation in the country dropped from N3.29tn as of the end of October 2022 to N1.38tn as of the end of January 2023.
Figures obtained from the CBN showed this represents a drop of N1.91tn in the three-month period.
The Governor, CBN, Godwin Emefiele, had in October 2022, announced plans to redesign the old N200, N500 and N1,000 notes.
The banking sector regulator said, “Accordingly, all Deposit Money Banks currently holding the existing denominations of the currency may begin returning these notes back to the CBN effective immediately. The newly designed currency will be released to the banks in the order of first-come-first-serve basis.
“Customers of banks are enjoined to begin paying into their bank accounts the existing currency to enable them to withdraw the new banknotes once circulation begins.”
He decried the challenges associated with currency management including significant hoarding of banknotes by members of the public, with statistics showing that over 80 per cent of currency-in-circulation was outside the vaults of commercial banks.
Other challenges, he added included shortage of clean and fit banknotes with attendant negative perception of the CBN and increased risk to financial stability; and increasing ease and risk of counterfeiting evidenced by several security reports.
In recent years, he said, the CBN had recorded significantly higher rates of counterfeiting especially at the higher denominations of N500 and N1,000 banknotes.
Although the global best practice was for central banks to redesign, produce and circulate new local legal tender every five to eight years, he said, the naira had not been redesigned in the last 20 years.
“On the basis of these trends, problems, and facts, and in line with Sections 19, Subsections A and B of the CBN Act 2007, the management of the CBN sought and obtained the approval of the President to redesign, produce, and circulate new series of banknotes at N100, N200, N500, and N1,000 levels,” Emefiele said.
Before the currency redesign plan of the CBN, huge figure of currency in circulation was recorded.
According to the CBN, the currency in circulation rose by N58.36bn to N2.84tn in September 2022 from N2.79tn in August.
The currency in circulation rose to N2.81tn in July, 2022 from N2.74tn at the end of June, 2022. It fell to N2.79tn in May from about N2.80tn at the end of April.
Currency-in-circulation is defined as currency outside the vaults of the central bank; that is, all legal tender currency in the hands of the general public and in the vaults of the Deposit Money Banks, according to the apex bank.
