Nelson Ugwuagbo

In a bid to alleviate the ongoing cash scarcity crisis in Nigeria, the Central Bank of Nigeria (CBN) has announced the temporary suspension of processing fees on cash deposits exceeding certain thresholds.

This suspension, which takes effect immediately and will remain in place until April 30, 2024, aims to incentivize cash deposits and enhance financial transactions for individuals and businesses.

Previously, individuals were charged a two percent processing fee on cash deposits above N500,000, while corporate entities faced a three percent fee for deposits exceeding N3,000,000.

The directive, signed by Dr. Adetona S. Adedeji, Acting Director of Banking Supervision, mandates all CBN-regulated financial institutions to comply. This means individuals and businesses can now deposit any amount of cash without incurring additional charges.

Leading Reporters gathered that CBN staff said “this measure will address the immediate cash shortage by encouraging the deposit of available cash into the formal banking system. This will increase the liquidity available for withdrawals and economic activity. Additionally, it promotes financial inclusion by making banking services more accessible to individuals who primarily rely on cash transactions.”

However, concerns remain about the potential for fueling inflation and illicit financial activities due to the processing fee suspension. Experts emphasize the need for the CBN to closely monitor the impact of this measure and implement appropriate mitigating measures if necessary.

The Nation has also reliably gathered that to address the current cash crunch in the country, the CBN has started deploying cash from its branches across the country to locations in dire need of cash.

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Another CBN official revealed that “efforts are currently being made to move cash to where the scarcity is hardest.”

Read Also: Why CBN must resist further hike in interest rates

He reiterated that the CBN has sufficient cash to meet the transaction demands of cash-using members of the public.

He attributed the biting cash crunch to the panic withdrawals of cash by Nigerians ahead of the yuletide to forestall the experience of the last year.

The CBN’s latest directive and action to deploy cash to needy areas demonstrates its commitment to addressing the current cash scarcity crisis while promoting a cashless economy and ensuring a robust and inclusive financial system.

The suspension of processing fees on cash deposits is expected to provide immediate relief to individuals and businesses affected by the cash shortage, boosting economic activity and access to financial services in the short term.

Point-of-sale operators in Nigeria have raised the alarm that some state governments have started charging them at least N30,000 in taxes annually per agent.

The National Vice President of the Association of Mobile Money and Bank Agents in Nigeria, Obioha Oti, disclosed this in an interview with news correspondent Thursday.

Oti was speaking on the emerging threat of the naira shortage and its effect on PoS operators.

According to him, PoS vendors are plagued by naira shortages and heavy taxes in some parts of the country.

He alleged that state governments in Anambra, Cross River, and Akwa Ibom, as well as other states in the southwest and north, tax PoS operators N100 daily and N2500 monthly.

“There are many other problems POS operators are facing now. This disturbing trend is why some state governments have started taxing operators heavily. We have reports in Akwa Ibom, Cross River, Anambra states, states in the southwest and others in the north. For Anambra, there is an agency the government commissions to collect N100 daily, N2500 monthly, and N1000 to register. If you do the calculation, one agent will pay at least N30,000 to the government in the form of taxes. And sometimes the people collecting these taxes are more than one,” he said.

An American multinational consumer goods firm, Procter & Gamble, popularly known as P&G, has announced that it is winding down its on-ground presence in Nigeria.

The Chief Financial Officer, Andre Schulten, made this known during his presentation at the Morgan Stanley global consumer & retail conference in New York on Tuesday.

P&G is the manufacturer of common Nigerian household items such as Pampers, Always, Oral B, Ariel, Ambi-pur, SafeGuard, Olay and Gillette.

According to Schulten, P&G will transition into importing its products to Nigeria rather than producing them in the country, adding that it is a result of the country’s challenging business environment as well as the difficulty in creating US dollar value

“The other reality that arises in some of these markets is that it gets increasingly difficult to operate and create US dollar value.

“So when you think about places like Nigeria and Argentina, it is difficult for us to operate because of the macroeconomic environment.

“So with that in mind, we are announcing a restructuring program with the intent to adjust the operating model and adjust the portfolio to ensure that we maintain the portfolio discipline that has brought us to this point.

“The restructuring program will largely focus on Nigeria and Argentina. We’ve announced that we will turn Nigeria into an import-only market, effectively dissolving our footprint on the ground in Nigeria and reverting to an import-only model,” he said.