Economy: Federal legislators direct CBN to address cash scarcity

*The House of Representatives, in the National Assembly, Abuja, expresses concern over the current cash scarcity in commercial banks, directing the Central Bank of Nigeria to address the situation and minimise effects of economic hardship on consumers of financial products and services

Isola Moses | ConsumerConnect

As the relative cash scarcity in the economy continues to impose significant hardship on millions of Nigerian consumers, the House of Representatives, in the National Assembly (NASS), Abuja, FCT, has expressed concern over the Naira supply situation in seevral commercial banks across the West African country.

ConsumerConnect reports the Federal lawmakers have urged the Central Bank of Nigeria (CBN) to address the discomforting situation and minimise the current economic hardship on Nigerians.

Photo collage of CBN logo and Nigeria’s House of Representatives in session

Hon. Uguru Emmanuel, a Federal legislator, in a motion brought under Matters of Urgent Public Importance, highlighted the severe economic and social implications of the cash scarcity.

The lawmaker hinted the development has left several Nigerian consumers unable to access funds even for basic needs.

Emmanuel observed while economic growth relies heavily on consumer spending and business investment, the persistent cash shortage has become a major impediment to these activities in the West African country.

Effects of cash scarcity on financial inclusion, businesses and economic growth

He also recalled that the CBN in its policy directive of December 21, 2022, had set cash withdrawal limits of N500,000 for individuals and N5 million for corporate entities.

Hon. Emmanuel, however, noted the Nigerian commercial banks have largely disregarded the policy, often limiting cash withdrawals to as little as N10,000 or nothing at all, especially at their Automated Teller Machine (ATM) points.

He lamented: “Entrepreneurs and individuals are subjected to long queues, sometimes spending days at banks without success.

“This situation has particularly affected rural dwellers who rely on cash for transactions and lack access to digital payment systems.”

The legislator called Nigerians’ attention to the apparent connect between commercial banks and Point of Sale (PoS) operators, who seem to have unlimited access to cash, often selling it at exorbitant rates.

He asked: “Where do PoS operators get their cash from while banks remain dry?”

The lawmaker warned unless the CBN takes immediate action, the situation could worsen, especially with the approach of the festive season, leaving consumers and businesses frustrated, and possibly plunge them into deeper economic hardship in the country.

House Committee to investigate cash crunch in banks

The House of Representatives, in a resolution, has mandated the Committee on Banking Regulations to investigate the current Naira scarcity in commercial banks and report back to the Green Chamber of NASS within a week.

The House also directed the Nigerian banking sector regulator (CBN) to urgently address the cash scarcity if it is not responsible for the shortage of cash in circulation.