Eid-el-Kabir: Cash Scarcity Hits As Currency In Circulation Fails To Enter Banks

A recent CBN report stated that by the end of May 2024, the amount of money in circulation had increased to N3.97 trillion, a 1.07% increase from the previous month.

Additionally, the CBN stated that as of April 2024, the money supply stood at N96.97 trillion.

According to information on the Central Bank of Nigeria website, the amount of money in circulation has steadily increased, from N3.87 trillion in March to N3.92 trillion in April.

The CBN estimates that the amount of money in circulation increased by 4.76 per cent monthly, from N3.69 trillion in February 2024 to N3.87 trillion in March.

According to the apex bank, during the first quarter, money outside banks also gradually climbed, rising from N3.28 trillion in January to N3.41 trillion in February and N3.63 trillion in March.

According to the data, more than 90% of money in circulation is kept outside banks, suggesting that Nigerians carry more cash.

In April 2024, broad money reached a new high of N96.97 trillion, indicating a considerable rebound from the March decrease.

Given the quantity of money available, Dr. Muda Yusuf, CEO of the Center for the Promotion of Private Enterprise (CPPE), thinks that the amount of money in circulation is not a concern.

He said:

According to him, “N3.97 trillion in circulation is not much compared to the N96.97 trillion money supply. Even the amount outside the banking system is still small compared to what is in the bank.”

He said that lack of access to banking services, insecurity, and corruption could contribute to people holding money outside banks.

He added:

“When people give bribes, they don’t pay through the bank. So they would rather keep the cash outside the bank.”

More concerns as bank limits cash

Meanwhile, Naturenex found that bank customers have been complaining about the severe lack of cash they need for everyday expenses because most banks now limit daily cash withdrawals from ATMs and over-the-counter cash withdrawals to between N10,000 and N20,000.

Citizens lament how they are frustrated after attempting to withdraw money from the bank.

Mobolaji Akeem revealed how he had to return to PoS after he queued at the bank for N150,000 only to realise that his bank only offered N20,000.

“I had to go to the PoS to get money so that my family and I can use it for the preparation of Eid.”

Latifa Ahmed also narrated how she spent money to buy her own money from PoS operators because she could not get enough cash to take her through the Eid celebration.

She said;

“Buying money doesn’t make sense when we have banks across Nigeria. If the banks were giving funds as they were supposed to do, we would not be patronising these guys.”

Vanguard was informed by teller service representatives at several banks; however, they have no justification for deducting money from consumers and consistently struggle with cash shortages from the CBN and the general public.

One of them stated:

“These days, we practically dispense all the cash we receive from both the CBN and the depositors every day, but we ration it according to availability.

‘‘Some days we dispense at a maximum of N20,000, sometimes it is more even up to N50,000 per customer. It just depends on the availability of cash.”