Nigeria has been gradually moving towards a cashless society in recent years, with the aim of reducing the amount of physical cash in circulation and promoting electronic transactions. While this move has its benefits, such as reducing the risk of theft and promoting financial inclusion, it has also brought about a new challenge: currency scarcity. This has led to Nigerians suffering in the name of a cashless society.
Currency scarcity occurs when there is a shortage of physical currency in circulation. This shortage can be caused by several factors, such as hoarding of cash by individuals, limited printing of physical currency by the government, or a decrease in the availability of currency due to the promotion of electronic transactions. In Nigeria, the latter seems to be the case.
The Central Bank of Nigeria (CBN) has been promoting electronic transactions as a means of reducing the amount of physical cash in circulation. This is in line with the country's goal of becoming a cashless society. However, the promotion of electronic transactions has led to a decrease in the availability of physical cash, which has resulted in currency scarcity.
The scarcity of physical currency has led to several challenges for Nigerians. Firstly, it has become difficult for people to withdraw cash from ATMs or banks. This has resulted in long queues at banks and ATMs, with people waiting for hours to withdraw money. Some have even resorted to sleeping at ATM points to ensure they get cash when the machines are refilled.
Secondly, the scarcity of physical currency has led to an increase in the cost of withdrawing money from ATMs. Some banks have increased the charges for withdrawing cash, which has led to complaints from customers. In addition, some people have resorted to using the services of informal money lenders, who charge exorbitant interest rates, as they cannot access physical cash from banks.
Thirdly, the scarcity of physical currency has also affected small businesses. Many small businesses operate on a cash basis, and the shortage of physical currency has made it difficult for them to conduct their businesses. Some have had to close down or reduce their operations due to the lack of physical cash.
The scarcity of physical currency in Nigeria has also had an impact on the country's economy. The informal sector, which accounts for a significant portion of the country's economy, has been affected the most. Many informal businesses operate on a cash basis, and the shortage of physical currency has made it difficult for them to conduct their businesses. This has led to a decrease in economic activity and a decrease in the country's GDP.
While the move towards a cashless society has its benefits, it has also brought about a new challenge for Nigerians: currency scarcity. The scarcity of physical currency has led to several challenges for Nigerians, such as long queues at banks and ATMs, increased charges for withdrawing cash, and difficulties for small businesses. The government needs to find a balance between promoting electronic transactions and ensuring that there is enough physical currency in circulation to meet the needs of Nigerians. This can be achieved through the printing of more physical currency, ensuring that ATMs and banks are well-stocked with cash, and reducing charges for withdrawing money from ATMs. Only then can Nigerians truly benefit from a cashless society without suffering due to currency scarcity.
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