On Sunday, January 29, 2023, less than 48 hours to the initial deadline set by the Central Bank Of Nigeria, CBN, for old notes of the redesigned 1,000 naira, 500 naira, and 200 naira to cease from being legal tender in the country, the apex bank announced an extension to the deadline from January 31, 2023 to February 10, 2023. But, the perplexing question that is on the lips of many is: What change will the extension have? According to the CBN, over nine hundred billion naira of the old notes is still in circulation. In fact, in their words, a large chunk of the old notes are still in people’s homes.
The CBN had on October 26, 2022 announced that it would redesign the one thousand naira, five hundred naira and two hundred naira notes. Less than a month later, the bank unveiled the new notes. The bank had announced that the new notes were to be introduced into circulation on December 15, 2022 while the old notes cease to be legal tender 48 days later. The bank benched its policy on several reasons among which was that the apex bank had become concerned over the daunting challenges in the management of the existing banknotes in circulation, especially those outside the banking system. The bank revealed that two-point–seven-three trillion naira out of the three-point-two-three-trillion naira in circulation as of September 2022 were outside the vaults of commercial banks across the country.
The Governor of the Central Bank of Nigeria, Godwin Emefiele also cited the worsening shortage of clean and fit banknotes, increasing ease and risk of counterfeiting evidenced by several security reports and compliance with global standard to circulate new legal tender every five to eight years. He, therefore, explained that the naira notes redesign will help to rein in most of the currencies outside the banking system and make its monetary policies more efficacious, deepen its cashless economy drive and minimize incidents of terrorism and kidnapping, with regard to access to large sums used for ransom payment.
The move was commended in some quarters as strategic in cutting the tails of money bag politicians who are hoarding the notes to be used during the general elections. It was expected that the policy will take back the old notes and drastically reduce any tendency for massive vote buying in this month’s elections. However, for most of the opponents of the CBN’s policy, they ask how did the CBN hope to successfully mop up two-point-seven trillion naira that is being hoarded and the remaining five hundred billion it confirmed was in bank vaults in just six weeks?
With the extension and recent announcement by the CBN that nine hundred billion naira was still in circulation, it is clear to conclude that the apex bank was incapable of delivering its promise within the time frame. It could also be concluded that the bank was only able to mop up just about two-point-three-three trillion in the time under review. How would the bank have thought and still thinks that with a ten-day extension, it will be able to complete this onerous task?
Whatever the justification for this policy is, the outcome is the panic hoarding of even the unavailable currency by Nigerians. The new Naira notes are scarce and the old ones are nowhere to be found. Automated Teller Machines of commercial banks are barely dispensing these cash and the Point of Service Agents who litter the streets of Nigeria are charging exorbitantly for any withdrawal. It is now operation “hold the one you have”.
It is clearly evident that this is not a deliberate act by the CBN to transition Nigeria into cashless economy but their obliviousness and incompetence to implement the cash swap policy within a planned, reasonable time. The same bourgeoise who the policy was intended to take away the old naira from their hands seem to be the same people who have untoward access to the new Naira notes.
It is saddening that less than twenty-three days to presidential and National Assembly elections, Nigeria and Nigerians are in long queues. Queue for petrol, queue for collection of permanent voter cards and queue for the new Naira notes.
Written by DAVID OKPOKWASILI
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