As Nigeria draws closer to her general election, its prolonged scarcity of the naira notes and petrol is becoming a major concern to citizens as financial experts warn that it would lead to more problems.

For a year now, Nigeria has been experiencing fuel scarcity, which is becoming a tradition in the country. As a result, you can see Nigerians all over filling stations queuing to get fuel to power their automobiles, and getting it is a hassle.

This problem has led to a hike in transportation fares and even unimaginable things. In addition, many citizens are in pain as they have their money stacked up in the bank and still lack access to their funds. 

What Is the Origin of the Naira Scarcity That Is Affecting Nigerians?

The origin of the naira scarcity started when a deadline was fixed, stating that all old naira notes ranging from #1000, #500, and #200 would not be accepted after the deadline elapsed.

After the declaration, citizens flooded their banks to change their old naira note to the new one; what was supposed to be an easy situation turned out bad as many banks claimed they didn't have the redesigned naira note.

Many had to stack their money in their banks to be safer when the old naira note would no longer be accepted.

At this point, naira scarcity began as many became short of cash as Bank Mobile App/USSD no longer worked because of network issues; long queues in front of Automated Teller Machines (ATMs) became unbearable; and exorbitant charges from Point of Sales (PoS).

What Is the Major Reason for the Naira Scarcity?

On Thursday, 8th February 2023, the Director of Consumer Protection, Mrs. Rashidat Mongunu, said that the major reason for the naira scarcity was that Nigerians were hoarding the note. 

She also noted that the redesigned note by CBN was distributed in the right quantity to banks across Nigeria. 

In her words, "Because of the attitude of some Nigerians in hoarding the money, even those that don't really need the money are rushing to get it and keep it, not to spend," she said.

Speaking further about the currency cycle management, she pointed out some key points which she said the CBN is doing to stop naira scarcity.

What Is the CBN Doing to Stop Naira Hoarding?

The CBN is doing all it can to stop naira hoarding, but the more effort put in place, those hoarding the naira make it counterproductive. So the CBN pleads with the citizens to change their attitude towards the naira and stop keeping the money from circulating.

According to Mrs. Rashidat Mongunu, the Director of Consumer Protection, she said,

"Currency management is a cycle but we have not allowed the cycle to mature, because when you issue our currency as CBN, what we expect is that the naira issued will come back into the banking system again. But now, everybody collecting the naira is hoarding it. So, no matter how much naira we put out there, if we continue with this attitude and the CBN issues from now till December, it will still not be enough. And you know that in every economy, you must have proper accountability. You just don't issue naira for the fun of it, you issue the amount that is commensurate with the level of activity you have in that country." she said.

Problems That Added to the Naira Scarcity

While the CBN directive looks like the only thing contributing to the naira scarcity, the following are things that contributed to the naira scarcity:

Mobile Bank Apps and USSD are No Longer Reliable

Poor networks from Mobile banks apps and USSD have also added to the naira scarcity. Since getting the new note was a hard process and some sellers no longer accept the old note, many have adopted the money transfer method.

After purchasing items from anywhere, you log into your mobile bank app or use the USSD to make transfers and pay to the seller account. However, many banks have been experiencing network delays as complaints keep coming. Below are complaints you can get when using the mobile bank app or USSD:

1. Poor network from the bank
2. Unsuccessful transactions
3. Issues with logging in
4. Bank maintenance
5. App freeze

This issue is what some users may experience when they try to use their mobile bank app or USSD. If you encounter such, it's best to wait a while to try again or check if you have a good network. You can contact your bank customer care for assistance if the issue persists.

Automated Teller Machines (ATMs)

For years, this has been a reliable source of help to those who find it hard to stand at the counter. However, when the scarcity of the naira and exorbitant charges from PoS began, people decided to switch back to using the ATM. 

Although, there've been issues where customers get debited and not credited by the ATM, which has led to hardship for some.

They'll have to go back to their bank to drop a complaint; the problem is not just that, but the time they have to wait before the money is reversed back to their account. Some have to wait 7-10 working days before they get their money back.

Point of Sales (PoS)

Many PoS attendants have access to cash, of which, before you can withdraw, you'll have to pay exorbitant charges. Before, being a PoS merchant looked useless, but now it's a gold mine.

In some areas in the country, for every #1000 withdrawal, you pay a #200 charge, far from the normal #100 charges before. While some even charge higher if they're to give you a new naira note.

The problem most times doesn't come from above, but the masses who choose to use every opportunity to exploit and make gains without looking carefully at the damages it's causing.

Since the use of money is greatly needed, citizens have no other option than to make use of the PoS. However, some PoS attendants have been arrested for the charges they put on withdrawal, and possible measures to reduce the increase are currently going on.

Banking Institution 

Banks have become more corrupt these days, making one wonder if their money is safe. When CBN announced the new naira note, it was made known that it was available in all banks, yet it wasn't accessible in many banks.

Earlier, the EFCC discovered that some banks were hiding the new naira notes and selling them for extra charges.

Conclusion

For the first time in the history of Nigeria, the naira became scarce as holding the new note looked like gold. Many Nigerians have taken to the street and social media platforms to express their worries as they blame the federal government for the hardship its citizens are experiencing.

In this article, you can see why the naira is scarce and what the CBN is doing to ease the tension. So I urge that you remain calm and follow the right process to make sure you change your old naira note before the deadline.