Many Nigerians who hoped to get access to cash after Saturday’s elections were disappointed on Tuesday as banks started resuming operations with no cash at their branches.
The BusinessDay visited several banks in Lagos, including Ecobank and Access Bank at Ojuelegba, Zenith and GTBank at opposite Abalti Barracks, and Zenith Bank, Idioro, Mushin as well as First Bank of Nigeria, Access Bank, Fidelity and Zenith Bank at Mazamaza.
Customers thronged the bank’s premises but were told that there was no cash over the counter and in the Automated Teller Machines (ATMs).
BusinessDay observed that the bank security officers were not wearing their uniforms.
“We chose to go on mufti because we are being cautious of the recent crisis happening around the country. If anything is happening, we pretend to be customers,” one of the bank’s security officers said on Tuesday.
Customers were left outside the gates under the sun while the security officers asked them what they had come to do and ushered them in one after another according to their needs.
Uju Ogubunka, president of Bank Customers Association of Nigeria, said everybody was being cautious of the way things were happening and that the banks needed to be really cautious.
He said the banks do not manufacture cash, rather they get it from the Central Bank of Nigeria (CBN) and distribute it to customers.
He said: “The environment is uncertain as the election results are not fully out and even the ones that are out are being contested. Nobody knows what will happen tomorrow. I believe that the banks are trying to be cautious so that they do not run into trouble when they are moving cash. That is my suspicion. I cannot say for certainty what is happening.
“As soon as normalcy returns, they should be in a position to go to the CBN to get cash, so that those of us who need cash for small transactions will have.”
According to Ogubunka, the second thing is that the CBN is trying to encourage a cashless economy and that one of the ways to promote cashless is to make cash scarce.
“And like I said, I cannot confirm any of these because I do not know whether they have money or not,” he said.
Efforts to reach the CBN for comment on this was not successful as its spokesman did not answer his calls.
On October 25, 2022, the CBN announced plans to redesign N200, N500 and N1,000 banknotes, and they were rolled out on December 15, after the unveiling by President Muhammadu Buhari.
Following the naira redesign programme, the CBN reintroduced the cashless policy with a peg on daily/weekly withdrawals.
According to a new report by Agusto & Co, a pan-African credit rating agency, the CBN, when launching the redesign project, outlined the objectives.
It said: “Perhaps its most compelling arguments centred on the need to combat terrorism and reduce counterfeiting. The others largely revolved around driving the cashless policy through a shift away from cash and towards increased adoption of digital banking channels for transactions. This was underscored by a need to deepen financial inclusion (currently at 64 percent) and drive an efficient payment system that would improve the efficacy of monetary policy tools in combating inflation.
“While the design of the policy gave room for underhand dealings by a privileged few, where the banking industry has really fallen short is in the capacity of the current digital payment infrastructure, which was already plagued by ‘transaction failures’ and an apparent inability to implement instant refunds, to handle the surge in transaction volumes.
“For context, in the five years leading up to 2021, electronic payments surged by 386 percent to N272 trillion, accounting for over 94 percent of the entire value of transactions in Nigeria’s banking system.”
Financial institutions also responded accordingly, by upscaling digital infrastructure to support the increasing adoption of electronic banking, the report said.