Business

Naira redesign: Uncertainties over January 31 deadline, experts warn CBN

Published

2 years ago

January 11, 2023

Twenty-one days to the deadline set by the Central Bank of Nigeria, CBN, for the stoppage of the circulation of the old Naira notes, there are doubts the apex bank might be unable to meet the January 31 target..

This is more so as some Nigerians have expressed worries and disappointment over the scarcity of the new naira notes and the apex bank’s handling of the process.

Recall that the CBN announced in October last year that it planned to redesign, produce, and circulate new series of N200, N500 and N1,000 notes. The three notes represent the highest denomination of Nigeria’s eight legal tenders.

Following the launch of the new designs on November 23, 2022, by President Muhammadu Buhari, the new currency notes were circulated from December 15, 2022, with both the new and existing notes considered legal tender until January 31, 2023.

DAILY POST conducted investigations across multiple bank branches and ATM galleries in the Abuja Federal Capital Territory between Monday and Friday last week to determine if the CBN directive had been complied with.

Our correspondent visited various bank branches in Maitama, Utako, Kubwa, Wuse and the Central Business District.

Findings showed that most of them were still dispensing old notes to their customers. Also, over-the-counter customers were being given old notes.

At the Access Bank branch in Utako District in Abuja, our correspondent who used the ATM reported that old notes of N500 and N1000 denominations were being dispensed to customers. The same was reported in other locations visited by our correspondents.

Also, some of the PoS operators doing business within Kubwa, Bwari Area Council of the FCT said that they did not have new notes to give to their customers, adding that in a bail of N100,000 they got from the bank, only N1,000 new notes were issued to them.

Amid the concerns about the scarcity of the new notes, CBN had insisted that January 31, 2023, remains the deadline for old currencies to be phased out from circulation.

DAILY POST gathered that the apex bank recently issued a directive to the banks on Wednesday and ordered the implementation to begin immediately.

However, as of last weekend, the banks had not complied with the directive by the apex bank as they complained of inadequate supply of the new notes, prompting them to load their ATMs with the old notes.

Although the CBN maintained that the current series of N200, N500 and N1,000 notes would remain legal tender until its January 31 deadline, it however, advised Nigerians to ensure they deposited all the old N200, N500 and N1,000 banknotes in their possession before the deadline.

It further noted that there would be no extension for the use of the old notes beyond the stated date.

“The current series of N200, N500 and N1,000 notes would remain legal tender until the deadline of January 31, 2023,” the CBN wrote on its Facebook page over the weekend.

Reacting to the development, a Nigerian economist and Chief Executive Officer, Centre for Promotion of Private Enterprises, CPPE, Muda Yusuf, said the CBN had grossly underestimated what it takes to make currencies available across the country.

Yusuf spoke on Monday when he appeared on the Arise Television morning Show Programme.

He said that the January 31 deadline set by the apex bank is unrealistic.

He said, “The CBN should be a lot more sensitive to developments in the environment. Obviously, from what we can see, the evidence abounds everywhere; we are dealing with a situation of a capacity problem on the part of CBN, capacity in terms of the production of the new notes and capacity with respect to logistics.

“Obviously, the CBN has grossly underestimated what it takes to make these currencies available across the country. If we are getting these kinds of feedback and stories from cities such as Lagos, Port Harcourt and Kano, What are we going to say about people in the more remote places in other States outside of these major cities?

“As I speak to you, I have not seen the new currency notes beyond what I see on the screen and things like that. Yet, we have practically just about three weeks to the deadline. This is clearly unrealistic, and I wonder if sometimes the CBN behaves as if they are on a different planet from where we are. This is obviously unrealistic; you see, the deadline is unrealistic. Frankly, I don’t understand what the rush is all about. I don’t know what they want to achieve.”

Meanwhile, the Human Rights Writers Association of Nigeria, HURIWA, has queried the CBN over the scarcity of the new naira notes a few weeks before the deadline.

HURIWA, in a statement, also urged the Economic and Financial Crimes Commission, EFCC, to go after currency hawkers and influential personalities who have mopped up the very few new currency notes that the apex bank recently released.

“About three weeks after the release of the redesigned N200, N500 and N1,000 banknotes by the CBN, millions of Nigerians, even those in cities like Abuja, Lagos, Port Harcourt, Kano and other places, are yet to see or touch the new naira notes. The situation is particularly worse in remote places and villages.

“Whereas, black marketers, politicians and expatriates continue to get access to crispy naira notes but deny millions of ordinary Nigerian bank depositors access to the new notes despite the approach of the deadline of January 31, 2023,” it said in a statement.

Speaking to DAILY POST concerning the development, a Financial Expert, Dr Anayochukwu Basil Chukwu of the Alex Ekwueme Federal University Ndufu-Alike, Ebonyi State, said the CBN was not prepared for the policy directions that they have set out to achieve.

The financial expert noted that many Nigerians, especially those living in rural areas, were out of the banking sector, adding that it would be difficult for them to cope with the new policy.

He said, “The CBN is not prepared to do the needful. Their body language and policy direction have not been in favour of what they want to achieve.

“Actually, they want to make sure that the economy is placed on a very good footing, but as it is, it is like they are not prepared for the policy directions that they have set out for themselves.

“I think there is a need for them to shift the deadline because, as it stands, most people, even those in urban areas, are yet to access the new naira notes, not to talk of those who are in the villages.

“This policy, if they don’t shift or reverse it, will cause a lot of difficulties, especially for those who are not among the bankable communities because a lot of people are outside the banking sector.

“More than 30 million Nigerians, if I am not mistaken, are out of the banking sector, and if they don’t have bank accounts and all those things, I wonder how they will cope with the new policy direction.

“The central bank should, by virtue of the situation in the country, shift that deadline to make it more realistic.”