Experts blame Naira scarcity on hoarding, urge CBN to identify causes

Experts have attributed the lingering cash scarcity in the country, which has led to rationing of cash by the Deposit Money Banks (DMBs) to hoarding.

They called on the Central Bank of Nigeria (CBN) to first identify causative factors responsible for the cash crunch, stating that this is a period of festivities, and cash should indeed be made available to meet the demands of same for the period.

Also, they called on the CBN to redouble its communication network to assure the people that there is no need to hoard cash, and in conjunction with commercial banks, adding that the apex bank must ensure that alternative channels are functioning optimally for transfers and the cost should be monitored.

Gbolade Idakolo, Managing Director, SD&D Capital Management Limited, who spoke with the Tribune Online said, “The major problem is that people are hoarding cash and those that trade with cash have stopped passing it through the banking system. The people also does not believe that the old notes will not be phased out despite the Supreme court judgement extending its usage indefinitely.

“The CBN should increase their communication network to assure the people that there is no need to hoard cash.

“The large cash deposit fee removed by the CBN is a step in the right direction.

“The CBN in conjunction with commercial banks must ensure that alternative channels are functioning optimally for transfers and the cost should be monitored.

“The commercial banks should as a matter of patriotism ensure that cash is released to their ATMs as much as possible to reduce the scarcity for the masses”.

In his reaction, Dr. Chijioke Ekechukwu, Managing Director at Dignity Finance and Investment Limited, told Tribune Online that “Currency in circulation is different from cash in the pockets of individuals.

“The size of deposits at the Deposit Money Banks and other Financial Institutions constitute currency in circulation. They may not be necessarily cash at hand.

“The cashless system has eventually caught up with us. But I presume that the cash scarcity started with the introduction of new currency and the withdrawal of old one that was aborted by the Supreme Court.

“In resolving this, the apex bank should first of all, Identify why the scarcity exists. This is a period of festivities, cash should indeed be made available to meet the demands of same for the period”.

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