The Central Bank of Nigeria (CBN) has recently made waves with the suspension of new loan applications under its intervention programme. In a circular titled “Suspension of Acceptance of New Applications under the Existing Central Bank of Nigeria, CBN Development Finance Intervention Programme,” sent to bank chief executives, the CBN signaled a significant departure from its previous development finance intervention funds approach. This move underlines a notable shift in the bank’s strategy introduced by the previous central bank governor.
Additionally, the CBN has mandated commercial banks, historically responsible for disbursing these intervention loans, to take on the task of recovering outstanding loans issued under the programmes. Concurrently, the apex bank has assured the public of addressing reported cases of cash scarcity in major cities across the country.
The current situation has been attributed to Naira hoarding by some individuals, a response to challenges encountered during the Naira redesign project. Mrs. Hakama Sidi Ali, the Acting Director in charge of Corporate Communications at the bank, revealed in a discussion with reporters in Abuja on December 13, 2023, that the CBN is vigilantly monitoring the situation and has disbursed ample cash to its branches nationwide for onward distribution to Deposit Money Banks (DMBs).
Sidi Ali offered insight into the hoarding cases, citing that as of February 2023, the currency in circulation stood at N1 trillion, surging to over N3.4 trillion by December 11, 2023. This surge indicates sufficient cash in circulation, albeit held by apprehensive individuals due to their past experiences.
She emphasized the CBN’s readiness to meet the daily transaction needs of Nigerians, urging patience while the CBN diligently ensures the availability of cash, especially during the festive season and beyond. While encouraging the acceptance of all Naira banknotes for daily transactions, Sidi Ali reiterated the bank’s call for the public to embrace alternative payment methods – e-channels – to alleviate the reliance on physical cash.
