As a Nigerian, the current cash scarcity crisis is one that I have experienced firsthand.
I recently had to travel to Ibadan to see my family and found myself struggling to find transport as I only had N1,500 in new notes, and the drivers insisted on cash in new notes only.
It was only after I offered to transfer N5,000 to the driver that he agreed to take me. It was a frustrating and disheartening experience, but one that many Nigerians have been forced to endure in recent weeks.
Since then, I have avoided public transport mostly due to some of the experiences I have heard from Nigerians on social media. In addition to my own experience and what I got on social media, I have also heard from others who have been impacted by the cash scarcity crisis.
Joe a fleet operator, who lives in the Jakande area of Lekki, relies on public transport to get to his workplace in Lekki phase 1. However, since the cash scarcity began, he has had to trek from his home to work and vice versa. He claims that public transport operators do not accept transfers mostly due to network issues. Some will not allow you to enter the bus if you do not pay upfront and since has not had time to queue at ATMs he had to resort to walking from work to home and back.
The cash scarcity crisis has impacted the mobility and cash-based businesses of Nigerians. For transporters, it has meant that they have had to adapt their payment methods, with some now accepting transfers as an alternative payment method, while others insist on cash in new notes only. The situation has been particularly dire for the informal sector, which accounts for 57.7% of the total economy.
Another person, Debola, said that she had to wait in long queues at the ATM just to get cash. Commuting from her house at Iyana Ipaja to her office in Ikoyi has been hellish. Her boss had to pay for a ride for her via one of the ride-hailing apps, and now she has been told to work from home pending when cash is available.
The failure of banking apps due to the increased volume of transactions has made those who switched to transfer payments reluctant to continue using this option. As a result, there has been a decline in the volume of transactions since the end of January 2023 when the new policy was due to become effective.
These experiences highlight the extent to which the cash scarcity crisis has impacted the daily lives of Nigerians. It has made commuting and doing business more difficult and has exposed the vulnerabilities in the country’s financial system. The situation is a result of a deeper malaise that requires urgent and comprehensive action
Usman, a banker, said that he still needs to get to work despite the challenges. However, he experienced a major challenge earlier in the week when his car had a mechanical problem. He decided to book a ride online, paying about N12,000 from Ajah to Ikeja.
The cash scarcity crisis is a symptom of a much deeper malaise that has plagued Nigeria for years. It is a failure of leadership, governance, and economic policies that have conspired to keep Nigerians mired in poverty and inequality. The crisis highlights the lack of foresight and planning on the part of the government and CBN. Instead of addressing the root cause of the problem, the government has relied on short-term solutions that have failed to address the issue.
The failure of leadership, governance and economic policies have resulted in a situation where Nigerians are left to fend for themselves in the face of the cash scarcity crisis. The crisis is a failure of leadership to provide the right policies and incentives to stimulate economic growth, create jobs, and reduce poverty. It is a failure of governance to ensure that institutions are transparent, accountable, and responsive to the needs of the people. It is a failure of economic policies that have favored a few at the expense of the many, resulting in a deeply unequal society.
The recent videos circulating on social media allegedly showing stacks of new Naira notes hidden away in bank vaults have fueled public anger towards banks and POS operators. Many Nigerians are frustrated with the sharp practices of some of these operators, who have exploited the situation to make outrageous profits. But the deeper issue is the lack of trust between Nigerians and their institutions, as many believe that these institutions are not working in their best interests.
Nigeria needs to break out of this cycle of failure and chart a new path that puts the interests of its people at the center of its policies. The government needs to take urgent steps to address the root cause of the cash scarcity crisis by developing policies that promote financial inclusion, encourage digital payments, and ensure that banks and POS operators are transparent and accountable. It needs to create an enabling environment for the private sector to thrive and create jobs. It needs to invest in infrastructure and social services that will improve the lives of Nigerians.
The cash scarcity crisis in Nigeria is a wake-up call for the government to address the underlying issues that have led to this situation. It is a reminder that Nigeria needs a new leadership that is responsive to the needs of its people, that is committed to building a more equitable and just society. It is time for Nigeria to break out of the cycle of failure and chart a new path that will lead to a brighter future for all Nigerians.
