The House of Representatives on Tuesday announced plans to probe the Central Bank of Nigeria (CBN) over the ongoing scarcity of naira notes across the country.

The decision followed the adoption of a motion sponsored by Hon. Uguru Emmanuel, urging the House to intervene in the ongoing cash crunch affecting commercial banks.

In his presentation, Hon. Uguru raised concerns about the severe impacts of the naira scarcity on key economic indicators, including gross domestic product (GDP), consumption, investment, money supply, and international trade.

He stressed that consumer spending and business investment, critical drivers of economic growth, are being stifled by the lack of access to cash.

The motion drew attention to a policy issued by the CBN on December 21, 2022, which set cash withdrawal limits of N500,000 for individuals and N5,000,000 for corporate entities. Despite the policy, Hon. Uguru argued that commercial banks were failing to adhere to these limits, with many customers unable to withdraw even N50,000. This, he noted, had led to long queues and delays, often forcing individuals to spend hours or days in banks only to leave with little to no money.

He said, “The House Is cognizant that one of the major factors that stimulate economic growth is Consumer spending and business investment.

“The House is also cognizant that cash supply shortage in Commercial Banks have dire consequences on individuals and the nation’s economy.

“The House is aware that on 21stDecember 2022, the Central Bank of Nigeria by a policy contained in a circular number BSD/DIR/PUB/LAB/015/073 reviewed the cash withdrawal limits across all channels to N500,000 and N5,000,000 for individuals and Corporate entities respectively, and which is not known to have been repealed.

“The House is concerned that the Commercial Banks in the Country have jettisoned this policy as they can hardly give N50,000 to even current account holders.”

The situation, according to Hon. Uguru, has worsened in rural areas, where people lack access to alternative payment methods like point of sale (POS) systems.

He warned that the cash shortage was causing untold hardship, with some individuals unable to afford basic necessities or access medical care due to the lack of cash.

Further, the House raised concerns about the availability of cash at POS operators, who are reportedly able to sell large sums of naira to the public at inflated prices. The question was raised: where are they obtaining this money?

With the yuletide season approaching, the House expressed alarm that continued cash shortages could lead to widespread frustration and exacerbate the hardship faced by individuals and businesses.

In response, the House has mandated its Committee on Banking Regulations to investigate the matter and report back within a week. Additionally, the CBN has been directed to address the cash crunch in commercial banks, or provide clarification if it is not responsible for the ongoing situation.

He added, “The House Is alarmed that while the Commercial Banks have no money to dispense, the POS operators have in their disposals up to N1 million in mint to sell to their cronies and the public, and the pertinent question is: where do they get the money from?

“The House is worried that if the Central Bank of Nigeria continue to starve Commercial Banks of cash, especially as we approach the yuletide season, many people and even businesses will be frustrated and people plunged into untold hardship.” (The Guardian)