Most lenders including United Bank for Africa plc, Zenith Bank plc and FBN Holdings plc called in staff on Saturday and Sunday to help customers access cash in banks or via automated teller machines (ATMs).
The disbursement, in compliance with a central bank directive, is being monitored “personally” by Governor Godwin Emefiele, according to spokesperson Isa Abdulmumin. Residents should have unfettered access to cash within the weekly withdrawal limits, he said by phone from the nation’s capital, Abuja.
Africa’s most populous nation was hit by a cash shortage late last year after the central bank began replacing old 200-, 500- and 1,000-naira notes with new ones in a bid to mop up excess liquidity, promote electronic-based payments and rein in inflation. Some state governors challenged the programme in court and the Supreme Court extended a February 10 deadline set to phase out old notes until year-end.
Although the court ordered the central bank to redistribute old notes amounting to 2.2 trillion naira, or 70% of cash in circulation, to ease shortage, residents still struggled to access banknotes as of last week as few banks and ATMs had supplies. It prompted the Nigerian Labour Congress, the umbrella workers’ union, to plan protests at central bank offices from March 30.
The improved distribution is expected to balance the supply and demand for cash in the economy, and halt further impediments to personal and business transactions. About 90% of transactions in Nigeria’s informal economy are conducted using cash.
While cash supply is being enhanced, the central bank will keep weekly withdrawal limits of 500,000 naira and 5-million naira for individuals and companies to discourage residents from holding excess money, Abdulmumin said. The central bank’s cashless rule put a processing fee of 3% for individuals and 5% for companies that seek to withdraw cash above the limits.