Cash Shortage in Nigeria
Feb 4, 2022
Nigeria is still experiencing a shortage of cash following a surge in demand around the festive season. Coming on top of record demand partly driven by pandemic uncertainty—as seen in countries worldwide—the result is that ATMs nationwide have unpredictable supplies, leaving people frustrated.
According to Abuja-based newspaper Daily Trust, many are turning to points of sale (POS)—meaning retailers of all kinds—in order to withdraw cash.
I was at different ATMs to get cash, but I could not get it. The only few I saw with money had long queues, so I resorted to using POS.
The Central Bank of Nigeria noted in November 2021 some 3.15 trillion naira-worth of cash was in circulation compared with 2.7 trillion in the same period of 2020. It was around this time, according to the Vanguard newspaper, that cash shortages began, with bank customers in some parts of Lagos reporting they were no longer able to make withdrawals. The situation has since spread nationwide, with northern regions reportedly hit hardest.
Prominent lawyer and university founder Afe Babalola has warned the cash shortage could lead to unrest should it continue long-term, noting ATMs on his own campus were running dry. While cashless payments are seeing increased popularity, cash remains the most used payment choice and is a key support for the economy.
Although cashless payments are becoming increasingly common, the demand for cash is rising in many advanced economies.
Babalola notes that physical money is ‘especially useful’ in times of crisis such as natural disasters, and predicts it will remain a significant pillar of payments in Nigeria for the foreseeable future.