Nigerians struggle with severe cash shortage, leading to a surge in transaction and withdrawal charges, causing financial strains for individuals and businesses alike. Major cities are witnessing bank automated teller machines (ATMs) limitations with low withdrawal amounts for their customers and even lower amounts for other users triggering additional fees when the limit is exceeded. Despite assurance from the Central Bank of Nigeria (CBN), the scarcity persists, impacting daily lives and prompting a significant shift towards digital alternatives.
Banks are imposing tight withdrawal limits, often not exceeding N10,000, with added charges if exceeded. Bank automated teller machines’ cash shortages worsen the situation, making it challenging to access physical currency. This limit in withdrawal has greatly affected the lives of many Nigerians as the amount dispensed daily is not enough to cater for an average man’s expenses in a day.
The scarcity is forcing a rapid move towards digital alternatives, online platforms and electronic banking services are booming as Nigerians adapt to financial challenges, turning to digital transactions out of necessity.
Point of Sale (POS) systems are feeling the impact, with operators seizing the chance to increase transaction charges. Different localities experience varying fees, hitting harder in places like Lagos State, and Benin City.
The cost of withdrawing physical cash has skyrocketed. What used to be a N100 fee for a N5000 withdrawal has doubled or even tripled in some areas. This increase extends to higher withdrawal amounts, such as N10,000 and above, further squeezing people’s finances.
Small businesses are grappling with the fallout as customers are reluctant to use scarce physical cash. They are now adopting digital payments, posing a threat to businesses dependent on cash transactions. Others are adapting by embracing and using POS systems to navigate the evolving business environment.
The cash scarcity is prompting individuals to make more strategic financial decisions. People are increasingly prioritizing essential expenses, optimizing spending, and seeking cost-effective alternatives to weather the economic challenges.Visiting banks has become a hassle due to prolonged queues and wait times. This, coupled with restricted access to funds, creates a belief that banks are not effectively managing the difficulties faced by customers.
Customers, directly affected by the cash shortage, are reassessing their ties with banks. The perceived struggle of banks to handle the situation results in a loss of trust among customers, affecting their confidence in these institutions.
Collaborative efforts between financial institutions, regulators, and the government could potentially pave the way for more equitable solutions. Small businesses, often the lifeblood of local economies, are navigating a delicate balancing act particularly for those with limited access to digital alternatives.
Nigeria’s economic landscape is undergoing a significant transformation due to the cash shortage. Daily transactions are affected, financial burdens are heightened, and businesses are compelled to adapt. As Nigerians navigate these challenges, the move towards digital alternatives is not just a trend but a crucial survival strategy in the face of evolving economic uncertainties.
