Towards the end of 2023, Nigerians began to remember the cash crunch of December 2022 and January 2023. It was a period Nigerians submitted their physical cash to banks but could not get the promised redesigned notes in ATMs.Â
Unfortunately, many people were thrown off balance in December of 2022, with the decision of the Central Bank of Nigeria (CBN) to mop up physical cash.
The very tight fiscal policy was in line with our cashless policy, the apex bank said.Â
Making matters worse were the reports of political tussle embedded in the story of the cash crunch. Some said the suspended CBN Governor, Godwin Emefiele, was fighting Tinubu’s ambition to become a president.
Well, there is no evidence as regards this claim even though that same Emefiele is facing trial like ‘Brother Jero’.
Is he a hypocrite, telling Nigerians a different thing and doing another? only God knows.
Real Reasons For 2023 Cash Crunch
Well, Again the same cashless plague visited most people who were becoming so used to cash transactions again.
The Roll Back Time
What Nigerians did not know was that the cash scarcity was bound to happen. They could not just see it coming.
The smart people who have fully embraced online transactions had no issues with going about their daily life as usual.
In fact, such cash crunch often helps them save a little more, leaving aside impulse buying.
So, for once, the CBN showed again its resolve to pursue a cashless policy. This it is doing by attempting to take full control of the amount of raw cash out there.
One thing is certain, if an economy is pushing for a cashless society, it must be able to control the amount of cash in circulation. This it does while it encourages cashless transactions.
If this is not done, there is a roll back that will happen, and the nation will set itself up for failure.
This is the first reason that the cash crunch had to come back.
But the Central Bank says there is enough cash in circulation to go round. Although it is doing this circulation of notes in a controlled manner.
Where Are The Naira Notes?Â
Indeed, this is one question many Nigerians asked, as they could only withdraw 5,000 Naira each day.
One thing people failed to realise is that the amount of money in circulation is not what it used to be and that is because it is controlled.
The money the CBN released is in the hands of Nigerians, but because the naira notes out there is limited, people who could find a way to hold the notes in new currency have made negotiations with the banking system to set aside such notes for them.
This is the reason you will still find money changers at parties with new naira notes amidst scarcity.
The banks prefer to hand new notes to these individuals and make additional change instead of loading the ATMs.
Well, this is a thing you see in systems that are not working properly.
December Festive Period Buying FrenzyÂ
Also, in December, especially when it is getting close to the festive period, people shop more than ever before. This huge number means many hands are seeking the very little amount of cash in circulation.
For this reason, the cash available will appear little and will never meet the demands of all.
This control is necessary, as it has its advantages.
While the pains endure, criminal activities are supposed to reduce since criminals know that people do not move about with cash.
Lowering Kidnapping And Crime
During the period that Godwin Emefiele took our cash away, Nigeria recorded a huge decline in the amount of kidnapping and robbery.
This is because kidnappers often request for raw cash, to limit the chances of arresting their gang member at the point of withdrawal.
Also, if transfers are allowed, security outfits can trace the money and account holder. All they need to do is tell the bank to monitor the activity around the transferred money.
Have You Read:Â SAD! Kidnap Victim Shares Gruesome Experience [VIDEO]
Recently, kidnapping resurfaced and it is on the increase.
A case in point is the one in Abuja, where at least six members of one family were taken away by kidnappers.
This is one of the evils that go with having so much physical cash in circulation.
The Way To Go With Cash Crunch
Right now, what many Nigerians need to do is to begin to shift their minds permanently away from excess physical cash in the system to online banking and transactions.
A country that wants to reel out of kidnapping and other crimes must check how physical cash moves around.
Also, the banking system must be equipped enough to track suspicious inflow of cash into an account.
This way, the system is able to guarantee that people will not lose their hard-earned money to criminals.
If this system works outside the shores of Nigeria, it can work here.
The principle is that where cash only moves around in liquid form, you can trace and minimise crime.