Why Nigerians are obsessed with cash

NAIRAMETRICS

Last week was very stressful for many Nigerians as far as getting cash was concerned. Many people endured long queues in banking halls, ATM galleries, and POS stores in search of cash. And at the end of the day, they still couldn’t get any.

Many disturbing viral videos and pictures emerged online of Nigerians standing in queues for hours and even fighting themselves all in a desperate bid to withdraw cash.

Many POS operatives have also started charging higher fees for the withdrawal of cash either old or new notes. Some POS operators charge as much as N200 for every N1,000 old note that is withdrawn, while others charge N300 for every N1,000 new note. This represents a premium of at least 20% and as much as 30%.

Findings by Nairametrics around some markets in Lagos, Ogun, and Oyo state revealed that market traders have refused to receive payments through transfers or adopt POS payment and have insisted on cash collection. This has also had a ripple effect on the level of business activities in the country as most Nigerians are now more prudent in their cash expenditures.

Meanwhile, the growing demand for cash in the country, despite moves by the CBN to improve Nigeria’s cashless policy begs the question of why Nigerians are desperate for cash rather than mobile transactions.

In understanding the need for cash by Nigerians, it is imperative to consider the demographics of the country as well as the socio-economic level of most citizens. This will help paint a better picture of why Nigerians would rather spend valuable time to get cash rather than adopt mobile transactions or other forms of internet banking.

High poverty rate: According to the National Bureau of Statistics (NBS), about 133 million Nigerians are multidimensionally poor largely due to the lack of access to adequate healthcare, food insecurity, and lack of education amongst others.

• The number of multi-dimensionally poor Nigerians represents 63% of the entire population. On the other hand, the World Bank estimates about 95.1 million Nigerians to be poor based on their income, with much Nigerian living below the poverty line of $1 per day.
• The high level of poverty in the country means that most will transact in petty trades, which would involve small amounts, that are not easily done over the use of an app. For example, buying a sachet of water costs an average of N20, fish N300, and many other petty staple foods.
• It becomes a difficult form of transaction for Nigerians to use a transfer