Cost of obtaining cash remains high despite CBN’s enforcement measures

Despite a N1.35 billion fine imposed on nine Deposit Money Banks (DMBs) and a 7,000-member taskforce deployed by the Central Bank of Nigeria (CBN) to monitor cash availability at Automated Teller Machines (ATMs), the cost of obtaining cash remained steep across the country. Nigerians continue to rely on Point of Sale (PoS) operators, who now charge exorbitant fees due to cash scarcity.

In Lagos, most ATMs remained empty, forcing residents to pay as much as N500 for a N5,000 withdrawal at PoS outlets—a significant jump from the N100 to N200 fees charged just months ago. For larger withdrawals, the charges are even higher, adding to the financial burden on citizens.

An official of a tier 1 bank revealed that the CBN has intensified daily ATM monitoring with its extensive taskforce, but experts argue that the problem lies deeper.

Economist and author, Kalu Ajah, criticised the CBN’s approach, stating that punitive measures against non-compliant banks are insufficient without ensuring a steady cash supply in the system.

“When there’s enough cash in ATMs, PoS operators won’t have the leverage to charge exorbitantly. But as it stands, most ATMs are empty, and Nigerians have no choice but to turn to PoS operators,” Ajah said.

Ajah further noted that Nigeria’s heavy reliance on cash, even in cities like Lagos, Port Harcourt, and Abuja, complicates the situation. He urged the CBN to focus on reviving traditional banking practices, such as maintaining ATM networks beyond bank premises and ensuring they are adequately stocked with cash.

Ajah also criticised the overreliance on PoS operators, describing the system as unique to Nigeria and counterproductive to achieving a modern, sophisticated economy.

“We shouldn’t have PoS operators at this scale. There’s a direct correlation between cash in ATMs and cash at PoS outlets—one always suffers. To build a trillion-dollar economy, we need traditional banking systems to function properly,” he emphasised.

Meanwhile, PoS operators claimed they are not to blame for the crisis. Taiwo Yusuf, a PoS operator in Ejigbo, Lagos, explained that they source cash from market women and shop owners who prefer to deposit their daily earnings through PoS services rather than visiting banks. “It’s a symbiotic relationship. We help them deposit their cash, and they help us meet demand,” he said.

The CBN’s N150 million fines on each of the nine sanctioned banks—Fidelity Bank Plc, First Bank Plc, and others—aimed to address cash distribution issues during the festive season. However, experts and citizens alike question whether these measures will translate into tangible relief for the cash-strapped public.

For now, Nigerians remain burdened by high transaction costs and limited access to cash, raising concerns about the effectiveness of the CBN’s strategies in addressing the lingering cash scarcity.

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