Business

Cash-induced Recession Imminent, Experts Warn As Naira Scarcity Persists

Published

3 years ago

February 14, 2023

As the naira scarcity lingers with its attendant effect on Nigerians, financial experts have warned that the country may slip into a cash-induced recession.

For many Nigerians, the currency scarcity hardship has become a nightmare without an end.

Accessing cash is now a miracle everyone desires. Some commercial banks’ Automated Teller Machines have turned into graveyards due to the non-availability of money, a situation some Point of Sales agents have taken to their advantage by charging outrageous fees.

February 10 was earmarked as a deadline by the Central Bank of Nigeria to phase out the old Naira notes. However, the Supreme Court, in an ex parte order, stopped the CBN from implementing the deadline pending a substantive hearing on Wednesday.

The development compounded the currency crisis for many Nigerians as some traders are in limbo on whether to accept or reject the old naira notes.

The Central Bank Governor, Godwin Emefiele, continues to run from pillar to post looking for a solution, the crisis lingers.

On Monday, Emefiele was reported to have met with President Muhammadu Buhari for the third time since the currency crisis started.

Despite assurance from the CBN and Buhari on the availability of the new Naira notes, the effect of its scarcity bites harder, with rural dwellers resorting to trade by barter and the currency of neighbouring countries for transactions.

Network failure and unsuccessful transactions have marred alternative banking platforms, especially the USSD.

In a chat with DAILY POST on Monday, a Financial Inclusion/Wealth Management expert, Mr Idakolo Gbolade disclosed that the country risks a real cash-induced recession because its economy mainly depends on cash.

“The risk of a cash-induced recession is real because our economy is still largely cash-based and the cost of food items being reduced due to low patronage and even in many occasions no patronage.

“Nigerians spend long hours in the queue in the banks and ATMs. Many hours that should have been used for productive ventures to oil the economy, billions are being lost daily as the cash crunch bites harder.

“The amount of cash in circulation presently cannot aid an effective business cycle in the economy. If these pressures continue, we could witness a cash drought aided by the CBN. The consequences of allowing these cash shortages to continue are dire for the economy, and with inflation already high, the recession is imminent.

“I want Nigerians to be proactive and embrace alternatives to cash since the government is trying to fast-track cashless policies without a solid network backbone to aid seamless banking.

“We should also put pressure on the government to reduce the hardship this policy is causing the ordinary Nigerians by ensuring we vote for the right candidate that can lessen these burdens on the people”, he stated.

Also, a Professor of Management and Accounting at Lead City University, Ibadan, Godwin Oyedokun said the currency crisis is a self-inflicted plague.

He stated that commercial banks’ and saboteurs’ attitude had succeeded in making the CBN’s Naira redesign cumbersome.

“The issue of scarcity of Naira is now getting beyond any theory because I want to believe that the problem is a self-inflicted plague.

“POS making outrageous profits from charges showed that the policy has created more problems for Nigerians.

“Solve the problem of scarcity of cash, every other thing will fall in place, but with the attitude of those in authority, mainly commercial banks, they have succeeded in making a mockery of the policy.

“The CBN is advised to wake up to its responsibility. I had said it before when the CBN said it had dispensed enough money to banks, it should make public the list of the banks and amount disbursed.

“Compel the banks also to account for the money to avoid hoarding.

“I know when the court resumes hearing, it would consider the issue of jurisdiction and rule on it before a substantive case would commence.

“Let’s see how it will pan out with the Supreme Court because legal luminaries have divergent views,” he added.

Also speaking, Malachy Ugwumadu, a human rights lawyer and past national president of the Committee for Defense of Human Rights, CDHR, disclosed that while Nigerians await a Supreme Court ruling on Naira redesign, the new and old naira notes can continue to exist.

Ugwumadu made this disclosure during an Arise Television interview on Monday.

“With the Supreme Court ruling, the old and the new notes can continue to exist as legal tender in Nigeria pending the determination of the matter.

“It would be contemptuous if the CBN and the Federal government give further directives contrary to the existing ex parte order”, he stated.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, CPPE, Dr Muda Yusuf, urged the CBN to comply with the Supreme Court’s order.

“The restraining order by the Supreme Court on this matter is unambiguous. What I expect is for the CBN to comply with this order. Failure to do so could amount to contempt of court. If the order had been obeyed, the currency crisis would have eased considerably”, he stated.

Earlier, the Nigeria Governors’ Forum, NGF, warned that the nationwide cash crunch could result in a CBN-induced recession.

In all this dilemma, Nigerians have remained resilient, even amidst suffering, earnestly seeking solutions from the Federal Government.

Business

Tinubu Approves 15% Import Duty On Petrol, Diesel

Published

7 days ago

October 30, 2025

Editor

President Bola Tinubu has approved a 15 percent ad-valorem import duty on diesel and premium motor spirit (PMS), also known as petrol.

This was announced in a letter dated October 21, 2025, where the private secretary to the president, Damilotun Aderemi, conveyed Tinubu’s approval to the Federal Inland Revenue Service (FIRS) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Tinubu gave his approval, following a request by the FIRS to apply the 15 percent duty on the cost, insurance and freight (CIF) to align import costs to domestic realities.

With the approval, the implementation of the import duty will increase a litre of petrol by an estimated N99.72 kobo.

The latest development has led to the Nigerian National Petroleum Company Limited (NNPCL) announcing that it has begun a detailed review of the country’s three petroleum refineries, with a view to bringing them back online.

NNPCL Group Chief Executive Officer (GCEO), Bayo Ojulari, made the announcement in a post on his official X handle on Wednesday night.

According to Ojulari, one of the options being explored by the NNPCL is to search for technical equity partners to ‘high-grade or repurpose’ the facilities.

Tagged: “Update on Our Refineries”, Ojulari said: “The NNPCL continues to remain optimistic that the refineries will operate efficiently, despite current setbacks.”

It can be recalled that despite spending about $3 billion on revamping the refineries, only the 60,000 barrels per day portion of the facility worked skeletally for just a few months before packing up.

The Warri refinery has remained ineffective weeks after it was gleefully announced to have returned to production, while the one situated in Kaduna State never took off at all.

Business

NNPCL Raises Fuel Price

Published

3 weeks ago

October 13, 2025

Editor

The Nigerian National Petroleum Company Limited (NNPCL) has increased the pump price of petrol from ₦865 to ₦992 per litre, marking a fresh hike that has sparked widespread concern among motorists and consumers .

As of the time of filing this report, the company has not released any official statement explaining the reason for the sudden adjustment.

During visits to several NNPC retail outlets, The Nation observed fuel attendants recalibrating their pumps to reflect the new price.

At NNPC filling station on Ogunusi road, Ojodu Berger, petrol attendants at the station said they were instructed to change the price to reflect the new rate N992 per litre.

However, checks at Ibafo along the Lagos /Ibadan expressway showed that NNPC outlets still displayed the old price of N875 per litre, although they were not selling to commuters.

Most of the NNPC stations were not dispensing fuel.

Business

CBN Directs Banks To Refund Failed ATM Transactions Within 48hrs

Published

4 weeks ago

October 11, 2025

Editor

The Central Bank of Nigeria has directed Deposit Money Banks and other financial institutions to refund customers for failed Automated Teller Machine transactions within 48 hours, in a sweeping reform aimed at protecting consumers and restoring confidence in the banking system.

The directive is contained in a draft guideline released by the apex bank on Saturday, titled “Exposure of the Draft Guidelines on the Operations of Automated Teller Machines in Nigeria.”

The document, signed by Musa I. Jimoh, Director of Payments System Policy Department, was circulated to banks, payment service providers, card schemes, and independent ATM deployers, with a call for stakeholder feedback by October 31, 2025.

Under the draft, failed “on-us” transactions, where customers use their own bank’s ATM, must be reversed instantly. If technical glitches prevent immediate reversal, the bank is required to manually refund the customer within 24 hours.

For “not-on-us” transactions, involving other banks’ ATMs, refunds must be processed within 48 hours.

“Customers must not be made to suffer for failed transactions caused by system errors or network failures,” the circular stressed.

In a significant shift, the CBN mandated banks and ATM acquirers to deploy technology that automatically reverses failed or partial transactions, removing the need for customers to lodge complaints.

Institutions holding customer funds due to failed disbursements must reconcile and return balances immediately.

According to the apex bank, these measures respond to widespread frustration over delayed refunds and poor customer service and form part of a broader effort to enhance consumer protection, improve reliability, and modernise Nigeria’s payment infrastructure in line with global standards.

The guidelines will also overhaul ATM operations nationwide. Banks and card issuers are now required to deploy at least one ATM for every 5,000 active cards, with phased targets of 30% compliance in 2026, 60% in 2027, and full compliance by 2028. Any future deployment, relocation, or decommissioning of ATMs must receive prior approval from the CBN.

To ensure safety, ATMs must be fitted with anti-skimming devices, CCTV cameras, and placed in enclosed or well-lit areas.

Machines are expected to comply with Payment Card Industry Data Security Standards, maintain audit logs, and display functional helpdesk contacts. At least 2% of all ATMs must feature tactile symbols for visually impaired customers.

ATMs are also required to dispense cash before returning cards, allow free PIN changes, issue receipts for all transactions except balance inquiries, display clear transaction fees, dispense only clean banknotes, and provide backup power to reduce downtime.

Downtime must not exceed 72 consecutive hours, after which operators must inform the public of the cause and expected restoration time.

The CBN will enforce compliance through regular audits, on-site inspections, and monthly reports from ATM operators detailing deployments and locations. Defaulting institutions risk sanctions, though fines were not specified.

The apex bank explained that the overhaul was necessary due to rising complaints about failed transactions, cyber fraud, and declining service quality, noting that “the goal is to build a payments system that works seamlessly for everyone, urban and rural users alike.”

Nigeria’s electronic payments landscape has grown rapidly in recent years, with 200 million cardholders and rising reliance on digital banking, but network failures, poor infrastructure, and delayed reversals have continued to undermine confidence.

The fresh guidelines, coming eight months after a revision of ATM fees, are expected to streamline service delivery, enhance transaction security, and hold banks accountable. Stakeholders are invited to submit feedback ahead of the final policy adoption, which could take effect before the end of the year.