By Bukola Olamona,Sade Adewale,Victor Akinkuolie (Ado-Ekiti),Francis Akinnodi (Ondo) & Precious Owolabi

Families scale down on Yuletide purchases

. Interbank ATM withdrawal limit now N1000 daily

. PoS operators make brisk business, charge exorbitant rates

. Traders lament low sales, express reservation on bank transfers

Less than a week to Christmas, Nigerians have continued to grapple with the deepening naira scarcity, a situation that has worsened economic hardships and disrupted festive preparations.

This tense situation is also being compounded by skyrocketing prices of goods, particularly food items in markets across the country.

In Ondo State, the cash crisis has become even more pronounced as residents lament exorbitant charges by Point-of-Sale (PoS) operators and the inability to access funds at banks and Automated Teller Machines (ATMs).

The scarcity, attributed to poor circulation of the redesigned naira notes and inefficiencies in the banking system, has left markets deserted with traders lamenting low sales, ATM queues lengthened, and PoS operators overcharging desperate citizens.

In Ondo and Ekiti states, markets that traditionally brim with activities during this period are unusually quiet. Traders lament low patronage as customers struggle to access cash.

Local businesses have adapted by accepting bank transfers, and some have gone as far as acquiring PoS machines to facilitate purchases using ATM cards. But many other traders have continued to express some reservations about bank transfers from customers.

Recall that the Central Bank of Nigeria (CBN) reported ₦4.5trillion in currency circulation as of October 2024, a 4.7% increase from September. However, many Nigerians still struggle to access cash for daily transactions.

Investigations by our correspondents also showed that PoS operators, whom residents often rely on for cash withdrawals, have increased their service charges significantly. Many residents said they had no choice but to pay these exorbitant fees or go without cash, worsening their financial strain.

Checks by The Hope correspondents revealed the hardship residents face in accessing their money.

In Akure, the Ondo State capital, residents have continued to grapple with the frustration caused by the scarcity of naira notes. Some residents who spoke with The Hope described the situation as unbearable, citing the rising cost of goods, especially foodstuffs, as an additional burden that must be addressed urgently.

A resident, Mr Gbenga Akindele, shared his ordeal at an ATM along Alagbaka, where he was attempting to make a withdrawal. “Gradually, we are tilting towards Emefiele’s era again because I don’t know why we are experiencing naira scarcity when there are frustrations in the town already,” he lamented.

Mr Akindele revealed that the overcrowding inside the banking hall had forced him to opt for the ATM, where he encountered equally long queues and delays.

Similarly, Mrs Eunice Kolawole, a provision store owner, said the scarcity had taken a toll on her business. “I run a small provision store, and it’s becoming difficult to restock because my suppliers insist on cash payments. With the limited cash available, I am losing customers and revenue every day,” she said.

A civil servant, Mr Seyi Adebayo, described how the crisis has upended his daily routine. “I spent over three hours in the queue yesterday, only to withdraw a small amount. The government needs to act fast; we cannot continue like this,” he said, expressing frustration.

Reacting to the dire situation, a Field Officer at the Federal Ministry of Agriculture and Food Security in Ondo State, Mr Ifeoluwa Igejongbo, described the situation as saddening.

“Despite currency circulation reaching a record high of ₦4.5trillion in October 2024, a 4.7% increase from the previous month, cash scarcity continues to plague the nation,” he said.

Igejongbo noted that Nigerians endure long queues at banks and ATMs, with many leaving disappointed, either without cash or with meagre amounts insufficient for their needs.

He emphasised the need for a multifaceted approach to tackle the issue, stating that Nigeria must strengthen its cash management systems.

Mr Abbey Abiodun added, “It has been a tug of war as the cash scarcity deepens. PoS operators overcharge customers for any amount they want to withdraw, and this has become a yearly trend.”

“The cash crunch has resulted in reduced purchasing power, increased costs, difficulty in finalising transactions, and long ATM queues,” he said.

On her part, Mrs Motunrayo Raliat highlighted the need to encourage electronic payments, accept alternative currencies, ration cash, seek financial assistance, and diversify products and services.

Speaking on the cash crunch, she said, “I think the government should devise means to improve cash flow to banks and enforce strict measures against financial institutions hoarding cash and selling it to so-called ‘special customers.’ ATMs must be adequately supplied with cash to ensure sufficient flow in society, at least to a reasonable extent.”

Miss Kemi Fatorise remarked, “It has really affected daily life, as people now depend almost entirely on online transactions to purchase even the least expensive products. Many local businesses have resorted to opening accounts with microfinance platforms such as Opay and Palmpay to hasten transactions between customers and sellers,” she stated.

At most ATMs, customers complained of daily limits being as low as ₦1,000, especially for interbank cardholders. “This is not enough for anything. How do they expect people to cope?” asked Miss Kemi Fatorise, a student in Akure.

Mrs Motunrayo Raliat, a trader in Ondo town, called for immediate intervention.

POS operators in Ondo and Ekiti blamed the situation on inadequate cash supply from banks. According to a POS operator in Akure, Mr Tawio Ajayi, they resort to unconventional sources like petrol stations to access cash. “That’s why charges have gone up. Banks hardly give us money,” he said.

In Ondo town, a resident, Mrs Temilade Akinola, shared her frustration after paying ₦200 to withdraw ₦5,000 from a PoS terminal. “The charges used to be ₦100. Now, everything is doubled. If this persists, Christmas won’t be the same for many families,” she said.

Similarly, another resident, Mr Adedayo Fagbami, recounted paying ₦500 to withdraw ₦10,000.

In Akure, Ondo’s capital, market activities have slowed down significantly. Traders complained of reduced patronage as customers struggle to find cash. A vegetable seller, Mrs Bola Adekunle, said, “The market is empty. People come, ask for prices, and leave because they don’t have cash to buy.”

Commercial vehicle and motorcycle operators in the state are not spared either. A tricycle operator, Mr Kolawole Oluwatobi, bemoaned low patronage. “People don’t have money to pay for rides. It’s affecting us terribly,” he said.

Similarly, food vendors in Akure noted reduced sales. A rice seller who identified herself as Funke Ayodele explained, “People are buying less because they don’t have cash. It’s a tough time for everyone.”

A spare parts dealer, Mr Emeka Okon, expressed his concerns during a phone interview, highlighting the dire financial challenges faced by Nigerians in the state.

Okon described the hardship as unbearable, particularly during Christmas when prices of essential commodities have skyrocketed, making them unaffordable for the average citizen.

He added that even major players in the business sector are relocating abroad due to the unfavourable economic conditions brought about by the cash crisis.

Okon called on the government to address the issue by reducing the prices of essential commodities, which would enable individuals to spend less and save more.

He also urged the Central Bank of Nigeria (CBN) to impose sanctions on banks hoarding cash, ensuring funds are made readily available to the public.

Similarly, Mr Adeyemi Adedugbagbe, another respondent, described the cash crunch as a reality affecting everyone, regardless of social class or status.

“It’s a situation that has forced many to cut their coats according to their sizes,” Adedugbagbe said.

He pointed out that the lack of cash has significantly reduced purchasing power, negatively impacting businesses across the state.

“Businesses here in Ondo are under siege, and business owners are lamenting,” he added.

Adedugbagbe further noted the limitations of electronic banking, which has not been fully embraced and is fraught with challenges.

The situation in Ekiti is not much different. Visits to major banks in Ado-Ekiti revealed that most of them have limited daily withdrawals to ₦5,000.

At a new-generation bank on Ajilosun Road, customers queued endlessly at ATMs, while security guards turned away those seeking higher withdrawals.

A security guard at one of the banks confirmed the scarcity. “We only pay out small amounts because the bank itself doesn’t have enough cash,” he explained.

The ripple effect of the cash crunch is evident in rising food prices across markets in both states. Traders now refuse bank transfers, citing unreliable network connections, further compounding the challenges for buyers.

Recall that the Central Bank of Nigeria (CBN) Governor, Yemi Cardoso, recently warned banks against hoarding cash, pledging sanctions for defaulters. However, many residents doubt the effectiveness of such measures.

Finance expert, Mr Tawio Owoeye, criticised the CBN’s handling of the crisis. “This situation exposes systemic failures. If unresolved, it could undermine the cashless policy and erode trust in the financial system,” he said.

Mr Owoeye added that many Nigerians might revert to keeping cash at home, fearing continued inaccessibility at banks.

The crisis has also impacted small businesses, with some adapting by opening accounts with microfinance platforms like Opay and Palmpay to facilitate transactions.

The festive season, typically a time of celebration, has been dampened by the ongoing cash shortage. Many families are scaling back plans for Christmas and New Year celebrations due to limited funds.

A roadside mechanic in Ado-Ekiti, Mr Majid Adebayo, lamented the impact on his business. “Most customers don’t want to pay by transfer, and without cash, they’re not coming. It’s really affecting us,” he said.

The CBN has assured Nigerians that it is working to resolve the crisis. However, many remain sceptical, demanding transparency and swift action to address the cash scarcity.

For Mr Abbey Abiodun, the situation is a wake-up call for better currency management. “We need clear communication and accountability from both the CBN and banks. Nigerians deserve better,” he said.