CBN deadline and new naira circulation crisis

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The Governor of Central Bank of Nigeria, CBN, Dr Godwin Emefiele, shortly after the Monetary Policy Committee, MPC, meeting on Tuesday stated that, the January 31, deadline for the collection of old naira notes remains sacrosanct.

Emefiele’s statement came even after the National Assembly had deliberated on the matter and passed a resolution asking the apex bank to extend the collection of the old naira notes to June in view of the haste with which the policy is being implemented and how the rural and unbanked communities would suffer the consequences. 

It would be recalled that last year, the CBN announced its decision to redesign 200, 500 and 1000 naira notes and move the country to cashless economy.

Although, the policy has continued to generate mixed reactions from Nigerians, it has the blessing of President Muhammadu Buhari. There is no gainsaying the fact that the policy is a big blow to money launderers, kindnappers and vote buyers. 

However, it has come at wrong time. Many Nigerians do not have bank accounts just as over 80 percent of transactions in the country are cash backed. Besides, lack of good network coupled with erratic power supply have made electronic banking more difficult and unreliable for Nigerians.

The CBN January deadline is like putting a cart before the horse. While the period of grace granted to Nigerians to deposit their old money is 90 days, there has been inadequate enlightenment and sensitisation campaign not only by the CBN but also other government agencies. 

The blame game between the CBN and Money Deposit Banks (MDBs) has compounded or worsened the scarcity of the new notes. The CBN insisted that it has released adequate newly printed mint to banks to upload in their respective Automotive Teller Machines (ATMs), while banks have continued to dispense old naira notes to the surprise of dispirited Nigerians. 

Nigerians have been eager to obtain the new naira notes. Yes, the CBN’s swap policy in which mobile money agents are allowed to swap new money to the tune of N10,000 directly to the rural Nigerians is good and may hasten the circulation of new notes, but the few days remaining are not enough to penetrate remote communities and riverine areas.

The decision by merchants or marketers to stop collecting the old naira notes before the deadline amidst scarcity of the new ones will fuel naira circulation crises. The PoS operators who are supposed to ease transaction difficulties have instead been making brisk business. 

They have increased charges ranging from N500 to N1000 per N10,000 deposit. With the deadline fast approaching and many Nigerians yet to deposit or access the redesigned naira notes, the CBN should, as a matter of urgency, extend the period as being demanded by Nigerians and the National Assembly.

Ibrahim Mustapha,

Pambegua, Kaduna state 


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