Nigerians Face Unprecedented Cash Crunch as Naira Redesign Looms
• Nigerians are facing a redesign of their banknotes, the naira, which means old naira bank notes will be useless after February 10.
• The Central Bank of Nigeria (CBN) has imposed a weekly cash withdrawal limit which is causing long-lines at bank offices and ATMs.
• This policy change comes at a difficult time for Nigerians, who are struggling to keep up with inflation and prepare for a general election on February 25.
Nigerians are facing a redesign of their banknotes, the naira, which means old naira bank notes will be useless after February 10. This is a problem because while Nigeria hopes to move closer to a digital-cash economy, the country is still heavily cash dependent. The Central Bank of Nigeria (CBN) has imposed a weekly cash withdrawal limit which, as of January 9, was 500,000 naira for individuals (around $1,087) and 5,000,000 naira (around $10,087) for organizations. While these weekly limits already seem insane, the actual amount Nigerians can pull out depends on what’s available at each location.
Impact On Ground
My team in Nigeria is witnessing all-day queues — with many people walking away empty handed. Some bank offices and ATMs do not even have cash to dispense. Nigerians are bringing mattresses to ATMs and others arriving at 4:00 am to be 115th in line when they open 8:00 am. Scarcity is an even bigger issue in some rural areas and individuals have not been able to access any new notes putting halt to their day-to-day transactions and livelihoods. Point-of-sale (PoS) transaction charges have skyrocketed by 400% in most cities across the country leading more fear due to inflation being over 20%.
This policy change comes at a difficult time for Nigerians as there is an upcoming general election on February 25th causing its own chaos — as political parties in Nigeria are threatening an election boycott if the February 10 deadline is pushed back again believing less cash in circulation will cut down on election fraud and vote buying .
The author proposes that digital currency such as Bitcoin can provide fast access to money without relying on banks or government issued currency making it easier than ever before for Nigerians living abroad or within the country’s borders to transfer money quickly without having to rely on legacy banking systems that may no longer work due their unpredictable nature .
It is clear that this policy change has caused major disruption in terms of how people access their own money and it’s also clear that digital currencies such as Bitcoin can offer an alternative way forward so that individuals don’t have to worry about limits or delays when accessing funds during times like this or anytime really .