It is exactly 21 days to the deadline issued by the Central Bank of Nigeria (CBN) for the return of the old N200, N500, and N1,000 banknotes following the currency redesign programme. But, what has been pondering on mind is this: can the apex bank beat the deadline (January 31st) considering the fact that the old currency is still in circulation and in dominance with about 60 percent circulation even within Capital City, Abuja which is CBN’s Power House?
Recall the CBN Governor, Mr. Godwin Emefiele, had on October 26, 2022 announced the central bank’s resolve to redesign, produce, and circulate new series of the N200, N500, and N1,000 denominations.
The appraisal and approach to the new currency by Nigerians was another setback considering that most people especially the hoi polloi were widely seen rejecting the currency including Okada riders and market women who are merely focusing on the appearance of the notes without deepening their thoughts on the positive purpose of the initiatives.
One of the analysts who expressed his feelings concerning the notes is a Professor of Finance and Capital Markets at Nasarawa State University, Keffi, Professor Uche Uwaleke, who said though he does not support calls for an extension of the deadline for withdrawal of the old notes at the end of the month, but the CBN must address the concerns over the availability of the new currency.
The former Imo State Commissioner for Finance said, “Since December 15, 2022, more than two weeks after the CBN began distributing the new naira notes via the banks, you hardly find them in circulation. The bulk of cash withdrawals from the banks and POS agents are still being done with old naira notes.
“It appears the banks have been hoarding the new naira notes for distribution to their high-net-worth customers most of whom are politicians, especially this festive period.”
Uwaleke also said, “If the January 31, 2023 deadline must be kept, I expect the CBN to push out more of the redesigned notes and also ensure that the banks are dispensing them to their customers. This has become necessary given the upward revision of the cash withdrawal limit from N100,000 to N500,000 per week for individuals.
“Else, at the current slow rate and the lopsided manner in which the distribution of the new naira notes is being done by the banks, I foresee a situation where the deadline is extended by at least two weeks.
“Having said that, I do not support the idea of extending it to June 30, 2023, as has been canvassed in some quarters. Doing so would defeat one of the aims of the currency redesign, which is to discourage vote-buying, in view of the fact that the general election would have been over by then.”
Eventually, the apex bank has warned the commercial banks in the country to stop putting old notes in ATMs or face a penalty. The bank explained that the new and existing currencies shall remain legal tender and circulate together until January 31, 2023, when the existing currencies shall cease to be legal tender.
With 21 days to the deadline given to Nigerians to deposit their old notes, the CBN has reiterated that there will be no extension. The CBN recently emphasised that there will be no timeline extension, “so all are advised to ensure they deposit the N200, N500 and N1,000 Banknotes in their possession before the deadline of January 31, 2023.”
The Nigerian Senate had called on the CBN to extend the deadline to phase out the old naira notes till June 30, 2023.
Amid complaints that the new naira notes are not fully in circulation, the CBN on Friday launched a countdown to the January 31 deadline when the old notes will cease to be legal tender. The apex bank announced the countdown on its Twitter page on Friday, noting the deadline now remains 21 days and a few hours.
But reactions had trailed the countdown by CBN as Nigerians took to their Twitter handles to express their grievances on the new development. Amid the rising demand for the new naira notes, the CBN equally dismissed speculations over the inadequacy of the new notes in the Deposit Money Banks (DMBs), saying the banks have enough new notes to circulate across the nation ahead of the January 31 deadline when old notes will cease to be a legal tender.
The CBN also clarified that it did not ban the banks from paying customers the new notes over the counter, pointing out that the directive to the banks to dispense new notes via Automated Teller Machines (ATM) was to complement over-the-counter transactions and increase the circulation of the redesigned notes.
However, the Apex bank Director, Currency Operations, Mr Ahmed Umar, while speaking at the Training Session for State Directors, National Orientation Agency (NOA) on Redesign of Currency Notes Policy in Abuja on Monday, reiterated that CBN had directed the banks to load their ATMs with only new notes to ensure that the currency circulates across the nation ahead of the January 31 deadline, urging commercial banks in the country to make sure that they comply with the directive of loading the newly redesigned naira notes in their Automated Teller Machines (ATMs).
He noted that the CBN’s directive was to implement the January 31 deadline withdrawal of old naira notes (N200, N500 and N1,000) in circulation. The management has mandated banks to stop putting old notes in their ATM machines. They should only put the new notes. And here is a serialisation of the policy that they can put either N500, N1,000 or N200 notes whichever denomination they have or combination of any of those notes, they should just put a new note in their machines.
The CBN needs to partner with sister agencies in the financial Sector and stakeholders to ensure strict and fast circulation of the new currencies across the country. This is because the current stage of circulation cannot beat the targeted deadline. Also, the Apex bank should beam its torchlight on the Deposit Money Banks (DMBs) to avert possible connivance with the money bags richmen on the grounds of hoarding.