Nigeria's Central Bank Battles to Limit Cash-Crunch Fallout

As Nigeria's Central Bank tries to rebuild trust following a disastrous introduction of new naira bills, customers' faith in the financial system is being tested, as many still battle to obtain cash.

Nigeria's Central Bank (CBN) has doubled supply of banknotes to commercial banks for circulation among customers.

The country's apex money authority has also directed all commercial banks to load their ATMs and conduct physical operations over weekends to ease the monthslong cash crunch that plunged Africa's largest economy into financial disarray.

It also ordered the old naira bills to be circulated until the end of this year.

Nigeria has battled a cash crunch since October 2022, when the CBN gave a February 2023 deadline to change old 200, 500, and 1,000 naira bills for newly redesigned ones.

Customers still can't get cash

The new notes were introduced to mop up excess cash outside the banking system, counter corruption and discourage ransom payments to bandits and kidnappers.

Stories of long lines and frustrated customers sleeping outside banks to get cash have been widely documented in Nigeria.

Yet, despite the CBN's efforts, it appears that some Nigerians are shunning the banking sector, saying the poorly-implemented naira redesign policy has exposed the system's inefficiency.

Last week, the country's National Labour Congress (NLC) union threatened strikes over the cash scarcity...Read more on All Africa

Source: All Africa