CBN's ₦1 trillion cash injection claim fails to mitigate cash scarcity

The plan of the Central Bank of Nigeria, CBN to checkmate the growing cash scarcity by pumping one trillion naira into the banking system has failed to reduce the current crises being faced in the financial sector.

According to the CBN governor, Godwin Emefiele, the apex bank has pumped more cash into circulation to soften the naira crunch and also increase the money in circulation.

The CBN boss disclosed this during the end of the Monetary Policy Committee (MPC) meeting at the CBN headquarters in Abuja.

Emefiele was answering questions from reporters on how the apex bank plans to mitigate the sufferings of Nigerians who have failed to have access to cash these past few days.

Emefiele confirmed that “currency in circulation is roughly close to ₦1 trillion and the CBN continues to pump the newly designed currency into the market.”

The CBN naira redesign policy which was settled by the March 3, 2023 judgment of the supreme court has not made any positive impact as Nigerians are still battling to have access to both the old and new notes about two weeks after.

The supreme court had overruled the CBN and declared both the old and new notes should remain legal tender till December 31, 2023.

With that announcement, it was expected that Nigerians would start seeing the old notes in abundance as those were earlier mopped up when the CBN policy was in force.

While speaking on the bank’s position on the matter, Emefiele said: The CBN will need to re-access again to know whether the currency in circulation has attained an optimal level so as to be able to put in place measures that will ensure that we don’t go back to what we had before, where people were keeping a lot of money outside the banking system for their own benefit.

“The MPC has noted that the naira redesign and cash withdrawal limit policies have resulted in a sizeable reduction in Currency-Outside-Banks, indicating an expected improvement in the potency of monetary policy tools.”

However, checks on some mobile money operators and Automated Teller Machines, ATMs have indicated that there is still a huge scarcity of naira notes as against the CBN Governor’s claim.

While the PoS vendors have mostly closed shop or have been left without a means to ply their trade, some of the ATMs visited failed to dispense cash to customers.