The prolonged scarcity of Naira is causing frustration among grassroots farmers and petty traders in Nigeria, adversely affecting their businesses. Many individuals have stopped keeping their cash in banks to prevent their funds from being trapped, exacerbating the challenges faced by small and medium-scale enterprises.
Farmers and traders, particularly in rural areas, shared their struggles, citing instances where buyers couldn’t pay for produce due to difficulties accessing money from banks. The cash scarcity has forced some traders to sell only to those with physical cash, as accessing funds through PoS machines or banks has become challenging.
Despite assurances from the Central Bank of Nigeria about the adequacy of cash in the economy, Nigerians continue to experience shortages, with many ATMs lacking funds, and banks rationing cash over-the-counter.
The impact of the cash crunch on the government’s financial inclusion drive, especially at the grassroots level, is a cause for concern. Dr. Femi Egbesola, President of the Association of Small Business Owners in Nigeria, emphasized the erosion of confidence among businesses trying to structure their finances. The situation is particularly challenging during the festive period, where cash remains crucial for daily transactions, especially in micro-sectors.
Solomon Aderoju, Vice President of the Nigerian Association of Small and Medium Enterprises (South-West Region), highlighted the negative effect on grassroots confidence in the banking sector. Financial inclusion, intended to encourage account opening and structured business transactions, is undermined when people lose confidence in depositing money in banks.
The persistent cash shortage is not only disrupting daily transactions but also hindering the government’s efforts to promote financial inclusion, posing challenges for businesses, particularly those operating at the grassroots level.