The CBN announced that it was redesigning the naira in October 2022.

Soon after, Godwin Emefiele, the CBN governor at the time, then ordered a cap on cash withdrawal from ATMs and in banking halls as the presidential election approached.

“Over 85 percent of cash that is in circulation is outside the banks,” he said at the time.

Vaunted as part of the bank’s cashless policy push, the restrictions put pressure on businesses, sparked angry protests, and gave mobile money agents leverage to exploit the cash shortage.

ATM withdrawals are still capped at 20,000 naira ($12.45) per day when withdrawing from one’s own bank. Withdrawals from another bank are restricted to just 5,000 naira a day.

Over-the-counter withdrawals of large sums attract punitive charges. Moreover, long queues in banking halls and frequent ATM service downtimes worsen the problem.

That has driven more people towards mobile money agents, said Uzoma Dozie, the founder of challenger bank Sparkle.

‘Excessive Fees’

Many Nigerians accused bank officials of diverting cash meant for ATMs to agents for personal gain.

“Some agents exploit cash scarcity by charging excessive fees for cash withdrawals and transactions,” Dozie told AFP.

“However, this practice isn’t inherent to the mobile money system but rather a symptom of broader cash availability issues and inadequate oversight.”

A few agents told AFP they also get their cash to run their businesses from other sources.

“I go to markets to buy cash from traders and bureaux de change. I factor that into the commission I charge customers when they come to withdraw cash from me,” said Ayo Olaoluwa, 34.

Ifeoma Onwuabuchi, 46, got started with about ?100,000.

“That’s why you see a lot of people coming into the space. The income is not big but it helps keep me moving,” Onwuabuchi said.

A spokesman for the influential Association of Mobile Money and Banking Agents of Nigeria did not immediately respond to AFP’s request for comments.

However, Dozie insisted that proper regulation and enforcement can address the concerns while preserving the “benefits of agent banking”.

CBN governor Olayemi Cardoso insisted that empty cash machines will not be tolerated and warned that defaulting banks “will face stringent penalties”.

“We also urge full regulatory compliance by all stakeholders, including Mobile Money Operators and PoS Agents, to promote digital transaction channels and improve service delivery,” he said. (Channels TV)