Nigerians Turn To Home Safe After Cash Scarcity Caused By CBN’s Naira Redesign

Many Nigerians appear to have lost faith in the country’s banking system as a result of the prolonged cash scarcity caused by the currency redesign undertaken by the Central Bank of Nigeria (CBN).

The CBN had redesigned the country’s currency in order to combat counterfeiting, ransom payment and take control of the naira in circulation as well as manage inflation.

However, the implementation of this redesign did not go smoothly. The new currency was not readily available, and many Nigerians found themselves unable to access cash for their daily needs. This led to long queues at banks and ATMs, as people struggled to get their hands on the new currency.

Even though the scarcity has eased, many Nigerians feel that the banks are yet to regain stability to provide them with the cash they need, and they have started hoarding their money at home instead of depositing it in banks.

Speaking in separate interviews with THE WHISTLER at different banks and business premises, the customers explained how the cash scarcity affected their businesses and their resolve to keep their monies at home pending when they regain trust in the system.

Anita Obilezuru, a woman in her mid-30s at Access Bank Karu, told our correspondent that the CBN policy took her by surprise, stating that she lived in “hell” during the period of the cash scarcity but she won’t be affected twice.

“I am not one to walk around with excess cash, but that period was a living hell for me, Online transfer failed, and I couldn’t boast of N500 cash. I won’t be depositing money for now, I have to wait and watch how long this development will stay, you know the saying, once beaten twice shy,” she said.

At Zenith Bank Area 8, Williams Ishaku, said “Depositing money to the bank now is a mistake. I run a tailoring business at garki market and most people are sticking to online transfers. Before now, I do not visit the banks to withdraw, because I get cash from my customers. Now with more people opting to transfers, I have to use the ATM if I need cash”

Also, at the Nyanya general market, Ene Anebi who owns a food store alongside her husband, revealed that before now they save money at home and always have easy access to them, but were forced to move them to the bank when the CBN announced redesign of the Naira.

“The policy is not good for business, so we are withdrawing our money from the bank, we have never believed in the Nigerian banking system, and these periods gave us more reason to avoid them” the Anebi noted.

THE WHISLER spoke to the former Director General of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, to get his view on the bank customers’ reactions.

Yusuf, who is the founder of the Centre for the Promotion of Private Enterprise (CPPE), explained that the cash crisis experienced by bank customers had a profound impact on their confidence regarding cash deposits.

According to him, it will take some time for this confidence to be restored as the lingering agony of being dispossessed of one’s cash and the resultant negative effects on the welfare and livelihoods of citizens cannot be forgotten in a hurry.

“The reality is that the cash situation is yet to normalize, though the scarcity has eased, cash availability is still an issue.”

Yusuf, however, said a reversal could be seen if access to cash eases considerably.

“Until the cash supply gets to a saturation point, it will be difficult to convince the citizens to deposit their cash in the banks, this is one of the unintended consequences of the poorly implemented cash redesign policy of the CBN.

“What we are witnessing is the exact opposite of what the cashless policy was meant to achieve, there is likely to be an increase in the amount of cash held outside the banking system” the CPPE boss noted.