Cash Crunch Persists Amid N3.4trn in circulation
As current naira scarcity enters its third week, economic experts including Dr Muda Yusuf, CEO of the Centre for Promotion of Private Enterprise (CPPE) has asked the Central Bank of Nigeria (CBN) to find a lasting solution to the nightmare, instead of regaling Nigerians with soothing tales of sufficient cash in vaults when the citizens cannot easily access it.
He insisted that cash scarcity should not be experienced in any part of Nigeria if truly there are N3.4 trillion in circulation and a coordinated supply system as claimed by the apex bank last week.
This comes as the scarcity challenge continues to stifle small and medium-scale enterprises’ (SMEs) ecosystem where the bulk of the transactions are in cash.
In its reaction, the apex bank, in a statement signed by its Spokesperson, Mrs Sidi Ali Hakama, said with N3.4 trillion in circulation means there is sufficient cash in the economy, except that the cash is being hoarded by some people who feared a repeat of the 2022/23 cash scarcity trauma.
Low-income earners have described the current economic situation in Nigeria as a death knell since cash scarcity has further worsened existing challenges like hyper-inflation, naira float, forex scarcity and costly fuels.
Also badly hit are Bureau De Change operators, commuters, taxi drivers and commercial motorcyclists who are having hectic times carrying out legitimate businesses.
Muda Yusuf, told Daily Sun, that the whole cash scarcity imbroglio was terribly affecting retail trade, being an informal sector that deals in cash.
He picked holes in the claims by the CBN that some Nigerians haunted by the fallout of the naira redesign policy were hoarding cash, as there was no sufficient incentive to do so.
“Cash scarcity is not good for the economy and something must be done very quickly. CBN didn’t say it was withdrawing cash, so what are you hoarding cash to do?
“The CBN needs to do more and trace the problem and quickly deal with it. There are records of cash movement. Where did it all go? You have records of deposits and withdrawals.
“As far as I’m concerned, there is no incentive to hoard cash. Unless it’s just to create confusion or sabotage the incumbent administration. Otherwise, it makes no sense hoarding cash. And if some people are truly hoarding the naira, deal with them.
“Again, there is no December 31 deadline date for old notes. There are no elections on the horizon that might have required hoarding cash to ensure huge spending for campaigns and associated needs.
