Reps Investigate Cash Crunch As Economic Hardship Worsens

As the festive season approaches, Nigeria’s House of Representatives has set out to investigate the cause of the cash crunch in commercial banks across the country.

The House expressed concern over the impact on citizens and businesses.

This followed a motion of urgent public importance moved by Hon. Uguru Emmanuel.

Uguru pointed out that cash scarcity has severe economic and social implications as many people, especially rural dwellers who rely so much on cash transactions and lack access to digital payment systems.

The lawmaker observed that although consumer spending and investment in businesses are key drivers of economic growth, the lingering cash scarcity has become a significant barrier to both endeavours.

Prime Business Africa recalls that the Central Bank of Nigeria (CBN) had in its bid to implement cashless policy, issued a directive in December 2022, which set cash withdrawal limits of ₦500,000 for individuals and ₦5 million for corporate entities.

However, the lawmaker expressed concerns that commercial banks have disregarded the policy, often limiting cash withdrawals to as small as ₦10,000. He added that most times customers are unable to withdraw cash from banks, leading to long queues and people not being able to meet up with their basic daily needs.

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He also expressed concern about the apparent disconnect between commercial banks and Point of Sale (POS)operators, who frequently sell cash at inflated prices and appear to have unrestricted access to it.

While warning about the consequences of the cash crunch, Uguru stressed the need for the CBN to take urgent steps in tackling the situation as it could worsen the current economic hardship, especially this period when people are involved in high volumes of commercial transactions.

After considering the motion, House directed the Committee on Banking Regulations to investigate the cash scarcity in commercial banks and report back within one week. The Green chamber urged the CBN to urgently address the cash scarcity.