Nigeria has got a Nairo crisis and it doesn't seem
to be easing for weeks ahead of a major national
election, Africa's biggest economy hasn't had enough cash for
its citizens. It all started back in October when
the Central Bank announced to de monetize the 200,
and 1000 Naira notes and what they say was a
chance to cut corruption, reduce excess cash and rein
in inflation. But the move spiraled into chaos.
For starters, a deadline to exchange old notes in
for legal tender led to long queues at ATMs and
banks nationwide, often times in the middle of the
night and up to seven hours long. Business runs
mainly on cash in Nigeria's large informal sector, as
does most of the economy, not just that only
60% of households, according to some estimates have access
to a bank account and that number dips to 40%
in rural places. So the shortage is grinding,
normally bustling. Shopping centers to a halt and even
getting to the front of the line isn't a feat
. In and of itself, residents are only allowed
to withdraw a maximum of 20,000 Naira or$43 at
a time. And even the machines meant to dispense
these notes are running dry. It didn't need to
be this chaotic. Other countries like India, the
UK and Somalia have all carried out similar dah monetization
schemes with varying degrees of success. Nigeria's crisis though
, comes as the Naira weakened against the dollar just
before presidential and with black market currency rampant compared to
the bank controlled market and Nigeria's largely unbanked population could
face even more hardship without any sharp increase in the
supply of the new notes, despite the extension of
the deadline.