In terms of getting cash, many Nigerians had a rough week last week. Long lines formed in banking halls, ATMs, and POS businesses as people sought cash, and they still couldn’t obtain any by the end of the day. Many distressing viral videos and photographs of Nigerians standing in lines for hours and sometimes assaulting each other emerged online, all in a desperate quest to withdraw cash. Many POS operators have began demanding increased fees for cash withdrawals, whether old or new notes. Some POS providers charge N200 for each N1,000 old note withdrawn, while others charge N300 for each N1,000 new note. This equates to a premium of at least 20% and up to 30%.
According to Nairametrics findings in various markets in Lagos, Ogun, and Oyo states, market vendors have refused to accept payments via transfers or POS payment and have insisted on cash only. This has also had a knock-on effect on the level of corporate activity in the country, as most Nigerians are now more cautious with their monetary outlays. Meanwhile, despite CBN efforts to promote Nigeria’s cashless policy, the country’s continuing demand for cash poses the question of why Nigerians prefer cash over mobile transactions.
Currently about 133 million of Nigerians are multidimensionally poor.
Understanding Nigerians’ demand for cash requires taking into account the country’s demographics as well as the socioeconomic level of the majority of residents. This will help to provide a clearer picture of why Nigerians prefer to spend their time getting cash rather than using mobile transactions or other forms of internet banking. According to the National Bureau of Statistics (NBS), over 133 million Nigerians are multidimensionally poor, owing to, among other things, a lack of access to basic healthcare, food insecurity, and a lack of education.
Nigerians who are multidimensionally poor account for 63% of the total population. The World Bank, on the other hand, believes that around 95.1 million Nigerians are poor based on their income, with many Nigerians living below the poverty threshold of $1 per day. Because of the country’s high degree of poverty, most people will engage in petty trades involving little quantities, which cannot be easily done through the use of an app. A sachet of water, for example, costs N20 on average, as do fish and a variety of other minor staple foods. Transfers have become a tough sort of transaction for Nigerians.
85% of total cash not at the bank but being held by many Nigerians.
Cash has historically been the default method of exchange for the majority of Nigerians. The majority of currencies in use at all times, according to a quick study of statistics from the Central Bank of Nigeria, have never come from the banking industry. According to recent data, as of December 2022, N2.57 trillion—or over 85% of the total amount of cash in circulation—was not kept in bank vaults. According to a recent statement from the CBN governor, the sum decreased to N900 billion in January as a result of the apex bank’s cash swap scheme.
The culture of spending cash can be traced back to the days of saving in an enclosed box, thrift collection, and a variety of other cash-based saving methods. Nigerians are still highly comfortable with cash transactions, especially considering the country’s low level of education and exposure, particularly in rural regions. Furthermore, due to the country’s education divide, many Nigerians do not trust the financial system for fear of being duped. In recent years, there has been a rise in the number of false alerts, in which a trader receives a credit alert for a transaction that is not completed, only to receive a reversal. Similarly, flaws in the financial infrastructure have severely eroded Nigerians’ trust in the cashless strategy.
CBN has made the move to aggressively enforce cash-less-based transactions.
By revamping the naira notes and putting a cap on daily cash withdrawals, the CBN has taken action to aggressively push cashless-based transactions in the nation. Immediately after this change, it’s crucial to fix several of the previously mentioned difficulties. In other words, banks need to improve their infrastructure, the central bank must inform the public about the benefits of cashless transactions, and the general public needs to be receptive to change and innovation.
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Why Nigerians are obsessed with money – Nigerians are not having it easy as money in the nation has turned scarce. – Express your point of view.
I think traditionally Nigeria is a cash economy country. But the CBN is now wanting us to have a cashless economy and it will help our economy. It is just that we should do it seamlessly.
I think both cash and cashless policy should be encouraged. Many Nigerians (including the educated ones) do not trust the financial system for fear of being duped, apart from that you expect me to buy #50 worth of something and do transfers?? Yeah, we prefer cash over mobile transactions. we better continue with both because to make Nigeria work as a cashless economy won’t work out!
Nigerians are not having it easy as money in the nation has turned scarce. Nigeria is full of so many problem from government.
For cash withdrawals, whether they are made with new or old notes, several POS operators have started to demand higher fees. In all honesty, we can’t entirely blame them. Taking into account the difficulty they must have encountered to obtain the money
The cashless policy is what will really help our economy and the country entirely but now the way is implement make cash scarce and people are suffering from it not able to spend money
Nigerians are well adapted to the using cash for every transaction. shifting to a cashless policy will definitely comes with some difficulties. If we can try to cope with the trend it will be beneficial to us later on.
As customers looked for cash, and queues formed inside banking establishments, at automated teller machines, and at point-of-sale businesses; nevertheless, by the end of the day, they were unable to receive any.
A significant number of POS operators have started imposing higher fees on cash withdrawals, regardless of whether the notes being withdrawn are old or fresh.
In their desperation to get their hands on cash, Nigerians have been seen in a number of upsetting viral videos and images. These Nigerians can be seen fighting with one another while waiting in line for long periods of time.
It’s disheartening to learn that the majority of Nigerians live in poverty, with many of them earning less than $1 a day, which is considered to be the threshold for poverty.
In the meantime, the topic of why Nigerians still prefer cash over mobile transactions arises despite the CBN’s attempts to promote the country’s cashless policy.
Cash has been the de facto medium of exchange for the vast majority of Nigerians over the course of the country’s history, and it’s distressing to see what’s occurring right now.
The Central Bank of Nigeria (CBN) has taken steps to aggressively push cashless-based transactions across the nation. These actions include redesigning the naira notes and placing a limit on the amount of daily cash withdrawals.
Several POS vendors have recently instituted premiums for cash withdrawals, whether using new or dated currency. Actually, they could have a point, and we shouldn’t condemn them too harshly. In light of the challenges they must have faced in order to get the funds,
Money is becoming increasingly scarce in Nigeria, making life difficult for the country’s citizens. The government of Nigeria is the source of a plethora of issues.
It’s upsetting to watch what’s happening right now, given that cash has been the de facto means of commerce for the vast majority of Nigerians throughout the country’s history.
The cashless policy would greatly benefit our economy and the entire nation, but the way it is now implemented makes cash scarce, which makes it difficult for people to spend money.
The money scarcity coupled with fuel scarcity have heightened the tension of so many people and pushed them to the level of obsession.The government should please act fast and resolve the situation before it becomes uncontrollable.
The scarcity of cash in the country is becoming unbearable. Government should please find an alternative to this insensitivity cashless policy.