Despite CBN moves and assurances, where have all the redesigned Naira notes gone?

By Isaac Asabor

Toadd to the several moves made by the apex bank and baggage of assurances given, the CBN on Friday says the scarcity of naira notes is not due to a shortage of printing materials at the Nigerian Security Printing and Minting Company (NSPMC) and assured that printing company was working to print all naira denominations to accommodate Nigerians’ transaction needs.

There is no denying the fact that since President Muhammadu Buhari and the governor of the Central Bank of Nigeria (CBN) launched the new naira banknotes on November 23, 2022, by virtue of the power vested in the apex bank of Nigeria, the CBN Act of 2007 (as amended), and consequently put the notes into circulation on Thursday, December 15, 2022, that Nigeria’s fiscal system has never remained the same as it has been distorted in favor of moneybags. As originally planned by the CBN, the existing N200, N500, and N1000 notes would cease to be regarded as legal tender by January 31, 2023.

Unfortunately, the old notes that were expected to be out of circulation from January 31, 2023, unprecedentedly became extremely scarce as banks could not dispense them to their respective customers, so much so that the demonetization exercise has to be extended to February 10, 2023.

The situation has been so bad that the exercise has to be further extended by 10 days for the old notes to be swapped for new ones as the cash squeeze continued across the country while millions of Nigerians struggled to complete transactions for goods and services, and even to eat and to transport themselves from one destination to the other.

To worsen the situation, not a few bank customers have continued to experience service downtime on Internet banking, Automated Teller Machines (ATMs), and Point of Sales (PoS) terminals. These challenges especially that of accessing cash over the counter, ATMs, and POS, have in the last few days, taken a downward trend as banks failed to give out cash to customers. The situation is even chaotic as various ATM terminals were (and still) not dispensing cash, while those dispensing minimally had a huge crowd to contend with.

In fact, the story of anger and pain has been the same across the country, particularly at the POS outlets as operators lament the inability to get cash. However, POS merchants with cash charge between N1, 500, and N2000 for N10,000 withdrawals, as against the usual going rate of N200.

Without resorting to denigrating anyone in this context, the first gaffe that presaged Nigerians should expect from banking services was when the Deputy Governor of the apex bank in charge of Financial Stability, Aisha Ahmad in December 2022, while responding to a question by a lawmaker on the quantities of the redesigned naira notes said she did not have the exact figure and did not want to give a wrong account. She however ostensibly guessed and disclosed that the apex bank ordered the printing of 500 million pieces of the redesigned notes.

Without any scintilla of hyperbole, the shortage of the newly redesigned naira notes has worsened in recent days resulting in long winding queues and black markets where the naira is unusually trading against itself. The situation has deteriorated substantially so much that some sellers and providers of various services have started rejecting the old notes, despite the scarcity of the newly redesigned naira notes.

As if the governor of the Central Bank of Nigeria (CBN) Mr. Godwin Emefiele, is not perturbed about the chaos that the monetary policy he has unleashed on Nigerians has caused, he on Tuesday, February 14, 2023, said there was no need to extend the February 10 sunset date for the old naira notes, as efforts are in top gear to ensure more redesigned notes are available nationwide, in addition to alternative banking channels.

Emefiele made the disclosure when he unfolded the apex bank’s monetary policy programmes to members of the diplomatic community in Abuja.

According to him, several strategic steps were taken before venturing into the currency redesign programme.

His position is coming after he met with President Muhammadu Buhari on Monday, amid an existing Supreme

Court interim order kicking against the implementation of the currency redesign programme, though the CBN was not a party to the suit.

It is expedient to recall that the apex bank’s governor has all along been giving Nigerians the impression that “All is well” whereas it is crystal clear that all is not well as far as the circulation of the new naira notes is concerned.

It is expedient to recall that prior to the foregoing assurance given by the CBN under Emefiele’s leadership that not a few moves and assurances have been made since the cash crunch began. For instance, the apex bank had directed banks to pay the redesigned naira notes over the counter at the limits of N20, 000 per day, yet bank customers could not get either the old or the new notes from the counter or the ATMs in virtually all the banks despite the apex bank’s promise to join the Police and other agencies to prosecute sellers and abusers of the naira.

Ostensibly raising the collective hope of Nigerians, Osita Nwanisobi, Director, Corporate Communication, CBN, disclosed in a statement that the apex bank will collaborate with the Nigeria Police, Federal Inland Revenue Service (FIRS), the Economic and Financial Crimes Commission (EFCC) and the Nigerian Financial Intelligence Unit (NFIU) to prosecute abuses and sellers of the naira.

He said: “The Central Bank of Nigeria (CBN) has observed, with grave concern, the activities of persons who sell the newly redesigned banknotes and those who flagrantly abuse the legal tender by hurling wads of Naira notes in the air and stamping on the currency at social functions.

“We have equally noticed the queues at Automated Teller Machines (ATMs) across the country and an upward trend in the cases of people stocking and aggregating the newly introduced banknotes they serially obtain from ATMs for reasons best known to them. Also worrisome are the reported cases of unregistered persons and nonbank officials swapping banknotes for members of the public, purportedly on behalf of the CBN.

Even before the situation became this ugly, the CBN says it allocates N30 million new naira notes daily to each branch of commercial banks to increase customers’ access to the new notes.

To add to the several moves made by the apex bank and baggage of assurances given, the CBN on Friday says the scarcity of naira notes is not due to a shortage of printing materials at the Nigerian Security Printing and Minting Company (NSPMC) and assured that printing company was working to print all naira denominations to accommodate Nigerians’ transaction needs.

Given the foregoing, the question remains, “Despite CBN’s moves and assurances, where have all the redesigned new naira notes in Nigeria gone?

Isaac Asabor is a Public Policy Analyst.