The Scramble for Cash amid Currency Surge

As the rationing of cash by banks continues to push Nigerians to POS operators who are making a kill of the rise in patronage, Festus Akanbi writes on the pains and the absurdity of the cash crunch at a period of a consistent rise in currency-in-circulation

Nothing aptly captures the current absurdity in Nigeria’s money supply statistics better than the fact that at a period when the rise in the volume of currency in circulation is giving the Central Bank of Nigeria sleepless nights, Nigerians do not have access to adequate cash to meet their daily obligations as banks’ ATMs appear to be running dry.

Money Supply statistics from the CBN as of January 2024 revealed that currency in circulation (CIC) surged by 163% in January 2024 to N3.651trn from N1.39trn (January 2023).

In the same vein, currency outside banks (COB) grew by 314% to N3.28trn in January 2024 from N0.79trn (January 2023). This implies 89.86% of the currency in circulation (CIC) was outside the banking system as of January 2024, marking a notable rise from the 57.14% recorded in January 2023 following a few months of the CBN’s naira redesign.

According to the latest money and credit statistics data of the CBN, Currency in circulation increased by N890 billion in three months under the current governor, Olayemi Cardoso. The amount of currency in circulation (CIC) has increased by about N890 billion between September 2023 and December 2023.

Analysts are still wondering about the whereabouts of this excess cash in the wake of the report that commercial banks recently set withdrawal limits on their automated teller machines (ATMs), a development that has created pressure for cash, especially in the nation’s informal sector.

A report by the Nigeria Inter-Bank Settlement System (NIBSS) reveals that the volume of ATM cash withdrawals in the country has declined consistently over the last few years, while the number of transactions processed through POS machines has seen a significant surge.

In a society that still relies on the use of cash despite the popularity of the apex bank’s cashless policy, the rationing of cash by banks has shifted attention to POS operators who are said to be making a kill of the increased customers’ traffic to their operation.


Analysts alleged that banks could be hoarding cash to sell to POS, thereby limiting the amount customers can get at a period when the apex bank has repeatedly assured Nigerians that there is enough cash to go round.

On November 2, 2023, the CBN said the scarcity experienced in some locations was due to a high volume of withdrawals from its branches by banks and panic withdrawals by customers from ATMs.

While the scarcity persisted, the apex bank, on December 13, blamed the situation on hoarding, stating most of the cash given to banks was in the hands of individuals.

Many Nigerians claimed that because bank ATMs had recently failed them, they are left with the choice of visiting POS operators to withdraw money for everyday transactions as the cash rationing takes a deeper toll. 

Like in many unfortunate situations, Nigerians have continued to pay dearly for their reliance on the POS platform. Apart from paying exorbitant charges to these operators, many people have fallen victim to the fraudulent activities of some patrons of POS. 

These operators, often seizing upon the desperation of citizens for cash, resort to exorbitant charges, effectively preying on vulnerable individuals. Such practices not only drain financial resources but also erode trust within the community. 

Moreover, these exploitative acts exacerbate the financial burdens of many Nigerians, perpetuating a cycle of economic hardship. Instances of fraud further compound the issue, leaving victims not only financially depleted but also disillusioned by the lack of regulatory oversight.

Rationing Cash

In some banks, account holders can withdraw between N150,000 to N40,000 per day while customers using another bank’s ATMs are restricted to between N20,000 and N10,000, depending on the financial institutions. Some customers however alleged that in reality, some of these figures are not usually complied with, suggesting that some bank staff are colluding with POS operators to deny customers access to cash.

THISDAY survey of Awolowo Road Ikoyi, Lagos last week showed that most of the banks’ ATMs were not restocked as banks’ security men were waving customers away from their premises, signalling that the ATMs were not dispensing cash. 

THISDAY in Abuja, Ibadan, and Port Harcourt gathered that it is the same experience as customers have to approach POS operators in the neighbourhoods.

A petty trader in the Agege market, Mrs. Angela Mathew told our correspondent last week that she has stopped going to banks’ ATMs because she has not been able to withdraw more than N20,000 this year.

She said: “I often use POS beside my house, they may not be safe, but I have a woman I trust.” 

One of her customers who spoke with THISDAY corroborated her, saying: “In most of the ATMs, despite being the bank customer, you can’t withdraw more than a certain amount; at my bank, I was informed it was N10,000. I had to go to the counter to take N20,000. 

Charges by the POS operators vary from one area to another. In the highly populated areas of Lagos, charges are usually moderate as operators rely on their turnover for their gains. In areas like Olambe, Akute, area of Ogun State for instance, customers pay as much as N300 for a N5000 withdrawal and N500 for N10,000. However, in high-brow areas like Ikoyi and Victoria Garden City, people pay up to N500 for N5000 and N1000 for N10,000.

In a notice to customers, a bank advised withdrawals should be limited to one bank card per transaction when using the company’s ATM to avoid cash shortage.

“To ensure uninterrupted access to cash withdrawals through our Automated Teller Machines (ATMs), we kindly request that you limit your withdrawals to one bank card per transaction when using our ATMs,” the bank (names withheld) said.

The notice added, “This measure aims to prevent instances of cash shortages that may occur when individuals use multiple cards from different banks in a single ATM transaction, surpassing the maximum daily withdrawal limit per individual. This practice may inadvertently restrict other customers’ access to cash.”

Eroding Confidence 

The President of the Association of Small Business Owners in Nigeria, Mr. Femi Egbesola, was quoted as saying the current cash crisis would have a detrimental effect, stressing that people’s confidence in the system would be undermined by what is currently happening. 

“People are trying to get their businesses structured and take their monies to the bank. With what is happening now, the confidence is eroded. People, mostly in the micro sectors, need cash for their daily transactions,” he said.

In addition to the complaints over the rip-off by the POS agents are complaints over incidents of fraud associated with the system. Many deposits are said to have been wiped away as their accounts became compromised after their exposure at POS centres.

 ATM’s Deficit 

Nigeria requires about 60,000 ATMs to meet up with its growing population of 216 million people and a banking population of 106 million adults, according to Tope Dare, executive director of Inlaks, the largest ATM operator in the country, which controls over 50% of the market.

The number of ATMs then grew from 11,000 in 2011 to 16,000 around 2016 and 21,000 in 2019.

It grew to 22,600 in 2021, where it has remained as of December 2023, an indication that investment in the market has reduced. 

Given the 22,600 active ATMs, Dare explained that there is a deficit of about 37,400 ATMs. As the number of bankable adults keeps increasing and more cards are issued, it is expected that ATMs will decrease in number over time, since the banks are not deploying more ATMs. 

Although it is easy to describe the popularity of POS channel as part of the move to take traffic away from banking halls, however, the crisis generated by poor management of the POS and other channels underscores the urgent need for comprehensive measures to safeguard consumers and hold accountable those who exploit the financial vulnerabilities of others for personal gain.

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