The naira redesign policy of the Central Bank of Nigeria (CBN) has come with diverse challenges including the scarcity of the new naira notes leading to untold hardships on the people.
The CBN said saboteurs in the banking sector are limiting the seamless circulation of the new naira notes to the cities and grassroots population.
The apex bank is therefore working with banks, Economic and Financial Crimes Commission, Independent and Corrupt Practices Commission and Nigerian Financial Intelligence Unit to tackle violators of the policy implementation and make the local currency widely available to the people and businesses.
The Central Bank Bank of Nigeria (CBN)-led naira redesign policy was initiated to ensure that monetary policy decisions produce the right results of reducing inflation rate and achieving exchange rate stability.
It is expected that ensuing deflationary pressure could elicit interest rate cuts that will in the short- to medium-term, boost economic activities, spur aggregate demand, and enhance output growth.
The naira redesign policy was also meant to support the efforts of security agencies in combating banditry and ransom taking in Nigeria and curbing counterfeiting of higher denomination of the N200, N500 and N1,000 banknotes.
The policy saw the redesigning of the N200, N500 and N1,000 banknotes and advice that people to deposit old notes in their bank accounts.
However, there have been several hurdles making the policy making difficult for the financial sector regulator to record seamless implementation. The biggest challenge has been difficulty in getting the new notes to circulate widely in cities, towns and rural areas across the country.
CBN Governor, Godwin Emefiele at the weekend, expressed sadness over the unscrupulous and unpatriotic conduct of some of bankers, whose greed and malevolence are sabotaging the CBN’s efforts.
“I assure you all that the enforcement agencies are on the prowl of these unpatriotic colleagues and their collaborators. A few of them involved in the sale of the new currency have been arrested by EFCC, ICPC and indeed the DSS and let me assure all Nigerians that these unscrupulous persons shall face the full wrath of the Law,” he said.
Emefiele therefore asked Nigerians to show understanding in the face of acute scarcity of the naira notes and excruciating pains they are passing through at the moment.
While the CBN mandated banks to pay N20,000 daily on over-the-counter transactions or through other channels like Automated Teller Machines (ATMs), banks are not making the funds available.
Long queues were reported in ATMs, and banking halls across the country, with banks turning customers back as at the close of business. There were also cases of poor network connectivity and excess charges for customers using Point of Sale (PoS) terminals.
Emefiele said the difficulty is transient given the strong believe that the ultimate gain of the policy to the country far out ways the short run pains of today.
He however foreclosed the possibility of further extension of the deadline February 10 deadline set for customers to deposit old notes to their bank accounts.
The deadline was earlier extended to February 10, 2023 plus a grace period of seven days amid scarcity of the new banknotes. At a press conference in Lagos, Emefiele admitted the hiccups in the implementation process. He, however, said he would not promise a “further extension”.
Emefiele said the apex bank is addressing “pressure areas” by redeploying cash where there are excesses. The governor dismissed the enormous challenges as transient, promising that the issues would be overcome soon even as he urged Nigerians to embrace alternative payment channels.
He sought the understanding of Nigerians while decrying the vandalisation of bank facilities and attack on bankers. According to him, destroying bank facilities would worsen the situation.
Emefiele admitted that the process is being sabotaged by greedy individuals. He said the bank and law enforcement agents would go after individuals spraying money at social events as well as bankers and CBN officials working with them.
“Some people have been arrested. We will trace others. They must go to jail because what they doing is a criminal offence,” he insisted.
On the scarcity, he said: “CBN is aware of the difficulty being faced by Nigerians in accessing the new currency at this initial stages of its issue and circulation but wishes to plead with all to please show some understanding as everything is being done to correct some of the observed lapses in the implementation of this ambitious programme,” Emefiele pleaded.
The programme came on the heels of directive to banks to commence over-the-counter payment, capping the maximal limit at N20,000 daily.
In many cities, Point of Sale (PoS) operators, bureau de change agents and emergency currency hawkers sold old and new notes to desperate Nigerians in need of cash.
In Lagos, Bureau De Operators cashed in on the scarcity by selling the new notes. An operator offered to sell N50,000 worth of new notes for N65,000 to a resident.
At one of the PoS points in Lagos, a resident was charged N1,000 for N10,000 worth of old notes.
In Abuja, a PoS operator collected an extra N600 charge from a resident for the N2,000 because he asked for new notes.
“A few of them involved in the sale of the new currency have been arrested by EFCC, ICPC and indeed the Department of State Service-DSS; and let me assure all Nigerians that these unscrupulous persons shall face the full wrath of the Law,” Emefiele said.
He said CBN possesses the capacity, manpower, and equipment and grit to produce and circulate the new notes and are doing all in our power to ease the inconvenience on all Nigerians , particularly the vulnerable Nigerians.
“I want to use this opportunity to once again emphasize that this policy is not targeted at anyone or any group of persons. Rather it derived from our inhouse analysis to strengthen our macroeconomic fundamentals and better our socio-economic conditions,” he added.
Emefiele said that currency management is a key function of the Central Bank of Nigeria, as enshrined in Section 2(b) of the CBN Act 2007. Indeed, the integrity of a local legal tender, the efficiency of its supply, as well as its efficacy in the conduct of monetary policy are some of the hallmarks of a great Central Bank.
“Besides, the general practice across the globe is that a central bank should normally redesign its currency within 5-8 years. From the on-set of this currency redesign program, we made it clear that for over 19 years, the CBN has not been able to undertake this important currency and liquidity management function that has important ramification for the effectiveness of monetary policy.
“Also, we aim to increase financial inclusion in the country by reducing the number of the unbanked population. Thirdly, our aim is to support the efforts of our security agencies in combating banditry and ransom-taking in Nigeria through this program and we can see that the Military are making good progress in this important”.
He said the CBN is aware of the difficulty being faced by Nigerians in accessing the new currency at this initial stages of its issue and circulation but wishes to plead with all to please show some understanding as everything is being done to correct some of the observed lapses in the implementation of this ambitious programme.
Despite these challenges, Emefiele assured all Nigerians that the CBN is working with the Deposit Money Banks and other very important stakeholders such as the EFCC , the ICPC and the Nigerian Financial Intelligence Unit are working together to ensure that the ultimate goal , which is to deliver to all Nigerians , a new currency that meets global standards is achieved.
CBN monitors banks’ strong rooms
The CBN team has also been moving from states to states monitoring banks’ compliance with the directive meant to get the new naira notes to all nooks and crannies of the country.
The Rivers State Branch Controller of CBN , Maxwell Okafor, said the apex bank is committed to ensuring that the new notes circulate massively across the country. He spoke after monitoring the CBN cash swap in Port Harcourt and Igwurita in Ikwerre local government area of Rivers State at the weekend.
He said the Point of Sale (PoS) operators remain a vital link to getting the new naira notes to the areas where banks do not exist.
Central Bank of Nigeria (CBN) officials led by the director of the Internal Audit Department, Mrs Lydia Alfa Ifeyinchukwu, also monitored commercial banks on the dispensing of new naira notes with a view to sanctioning defaulting banks in Adamawa State. The officials during the exercise, checked Automated Teller Machines (ATMs) and expressed satisfaction with the level of compliance by the banks.
In Lagos, CBN Deputy Director Governor’s Department, Moses Ademosu, also monitored compliance in Epe axis of the the state to ensure banks’ compliance.
He said the apex bank is monitoring the ATMs to ensure compliance and ensure that the new naira notes circulate to the people at the grassroots.
Besides, the monitoring exercise, the apex bank also commenced a nationwide sensitization through the Print and electronic media to create an awareness on the redesigned notes to Nigerians including collaboration with the National Orientation agency to reach all Nigerians across multiple channels.
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