There is an acute shortage of new banknotes in ATMs in Nigeria.
Africa’s largest economy, preparing for the transition to a new paper currency, is facing serious problems in the financial sector. Hundreds of people at a market in Lagos, one of the largest cities in Nigeria, have recently been unable to use ATMs due to the lack of banknotes. People were limited in withdrawing 20,000 naira ($43), which was already a difficult situation, significantly aggravated by the lack of banknotes.
Also, the problem with ATMs has had a negative impact on the Nigerian digital payment system. This system, being the only alternative in the circumstances, turned out to be overloaded. Consumers make online payments without being able to make transactions otherwise. The influx of customers generates a large load, because of which it takes several hours for one operation.
The problematic phenomenon arose after the Nigerian government decided to replace three high-denomination banknotes with new ones. The country’s leadership explained this decision by the fact that it would be more difficult to forge new banknotes. But the authorities did not have time to print a sufficient number of new money on the eve of February 10, when the old ones expire. As a result, real chaos reigned.
The head of the Central Bank of Nigeria (CBN), Godwin Emefiele, during the announcement of the decision to start issuing new banknotes, said that these actions will allow the regulator to more effectively control the supply of cash in the economy. In October, speaking with journalists, he noted that the integrity of the local legal tender is one of the distinguishing features of an efficiently operating regulator.
Godwin Emefiele is convinced that the significant accumulation of banknotes by members of the public has a negative impact on the ability of CBN to perform its tasks. He also stated that more than 85% of all Nigerian currency is located outside the vaults of commercial banks.
As we have reported earlier, Nigeria to Legalise Crypto.