PoS BUSINESS SHRINKS AS NAIRA SCARCITY BITES
Written by Oyebamiji Idowu on December 18, 2023
Point of Sale (PoS) operators are feeling the pinch of a nationwide cash shortage, forced to buy cash at inflated rates from traders due to limited withdrawals from banks. This scramble for cash is shrinking their businesses, raising concerns about the broader impact on the Nigerian economy.
Banks across the country have been grappling with a lack of available cash for withdrawal lately, leaving frustrated customers facing long queues and empty ATMs. The Central Bank of Nigeria (CBN) attributes this scarcity to “naira hoarding” by some individuals, linked to challenges encountered during the recent naira redesign project.
For PoS operators, who rely heavily on cash transactions, the situation is dire. Their ability to serve customers is hampered by their own struggle to acquire cash, leading to a decline in business activity. This shrinking of PoS services, crucial for cashless transactions and financial inclusion, has the potential to ripple through the economy, impacting both consumers and businesses.
The CBN’s explanation of naira hoarding highlights the need for effective and transparent communication with the public. Addressing concerns about the new naira notes and providing clear incentives for exchanging old notes are crucial steps to encourage compliance and curb hoarding behavior.
Additionally, exploring alternative solutions such as increasing cash supply for banks and boosting electronic payment infrastructure could ease the immediate pressure on PoS operators and businesses.
Addressing the cash shortage and its impact on PoS businesses necessitates a multifaceted approach, involving the CBN, banks, and the public. Only through collaborative efforts can Nigeria overcome this cash crunch and ensure a healthy and thriving economy for all.