Connect with us


NEWS REVIEW… Has CBN missed the target with new naira policy?



 The Central Bank of Nigeria (CBN) recently took the bold step of redesigning the country’s national currency, the naira, in an attempt to better reflect the changing economic and cultural landscape of the country. While the CBN hoped this redesign would lead to increased stability in the value of the naira, its effort has not yielded the desired results…yet, begging the question: has the CBN missed the target on naira redesigning? FATIMAH IDERA and FAWAS ADEBISI write:

Residents in virtually every part of Nigeria have suffered over the last few months trying to get their money from banks. Students and lecturers have also had their share of the stress.

The CBN has been the primary body responsible for regulating monetary policy and financial stability in the country since its inception in 1958. As such, it has had a great deal of influence over the Nigerian economy, and has been subject to an increasing amount of scrutiny in recent years due to its inability to meet certain key targets.

So far, the CBN has not met the goals they set for the redesign of the naira. In the preface to their currency redesign plan, the CBN outlined a goal to make the currency more secure and combat counterfeiting, stressing that the layman would have access to their money conveniently while the rich would struggle to get their money.

Different crises have evolved due to this naira redesign policy. Many Nigerians have been left stranded, sleeping at Automobile Teller Machine (ATM) points, striping naked in banks or involved in riots, in order to exchange or swap their old notes.

Following scarcity of the new naira notes, riots ensued in different parts of the country, especially the South-West region, raising doubts among Nigerians over the aim of the Central Bank of Nigeria, concerning the new naira policy.

Many Nigerians in different parts of the country have lamented the scarcity of Naira, stressing that the CBN has put citizens in unrest, as they couldn’t withdraw their money at their convenience.

Recall that on October 30, 2022, it was reported that the president, Muhammadu Buhari revealed that he approved the redesigning of the old naira notes, shortly after the announcement was reported on October 26, 2022.

Meanwhile, in November 2022, he launched the new naira notes of N200, N500, and N1,000 denominations, which are aimed at combating counterfeiting, improving the effectiveness of monetary policy tools on inflation, as well as mopping excess liquidity.

According to the president, the new naira has special features that makes it hard to manipulate.

He added that only people hoarding money would suffer the brunt as workers would be free from stress.

Buhari said, “People with illicit money buried under the soil will have a challenge with this but workers, businesses with legitimate incomes will face no difficulties at all.”

However, the reverse is the case today, when workers are forced to stay at home because there is no cash to spend for fares.

People have been spotted, spending the new naira notes lavishly at parties. To the surprise of Nigerians, the money being spent at parties are spent in packets, and bundles.

Recall that before the declaration of the February 10 deadline, for the exchange of naira notes, the CBN had initially said the deadline was January 31, 2022.

However, after much consideration of the effect of naira scarcity in the country, it was later adjusted to Feb 10, 2023.

And finally, the Supreme Court of Nigeria ordered the suspension of the deadline, after 3 governors intervened, complaining about the stress their citizens were going through.

Buhari gives reasons for redesign

On November 23, 2022, the president of Nigeria told Nigerians that the invention of the new naira notes is to reduce theft in politics, banditry, and any form of illegal hoarding of cash.

According to him, the new notes have special security features that could help the CBN, the Economic and Financial Crimes Commission, EFCC, and other security agencies in fighting corruption in the country.

In the same vein, on November 24, it was reported that the CBN governor vowed to work with security agencies in the country to track large withdrawals across the country.

According to the report, large withdrawals, if needed, would take much process that could frustrate one, as there won’t be giving of large cash at counters.

However, in contrast to this, immediately the new notes were launched, some Nigerians were seen spending the cash lavishly, in bundles, while many Nigerians were queuing at banks, for hours, in order to get their money.

CBN recovers N1.9tn in two months after naira redesign

On January 30, 2023, it was reported that the CBN had recovered a total of N1.9 trillion naira, within two months, from the naira notes redesign only.

According to the CBN governor, on 29th of January, 2023, out of the 2.7trillion old naira notes in circulation, only N900 billion was with Nigerians.

However, instead of producing enough of what was taken, according to a report, on February 11 2023, “What the CBN is doing is to give us only 10 percent of the worth of the old notes we deposit with it. For instance, if a bank takes N1bn to the CBN branch office in its area of operation, it will be given N100m new notes to distribute to its branches nationwide and load onto its ATMs.”

The report added that it was obvious that the NSPMC was not capable of printing more than N500bn, adding that, “with the Mint’s current capacity, to print N2tn will take about a year.”

Areas where protests have ensued over naira scarcity are; Lagos, Abeokuta, Ondo, Delta, Ekiti, Uyo, Warri, and Abuja among others.

Therefore, this has led to the closure of some banks, as the protest always results in damaging of bank properties.

According to a report, on February 8, 2023, Zenith Bank, First Bank, Sterling Bank, Polaris Bank, United Bank for Africa, Fidelity Bank, Stanbic IBTC Bank, among others, ordered some of their branches in different parts of the country to shut down their activities.

Also, on the effect of this, it has been reported that some rural dwellers in some parts of the country have resorted to practicing the olden days trade by barter act.

The act of giving out their goods, in exchange of getting other goods, has now started due to the naira scarcity in the country.

“I Withdrew N3000 With N600”

Akinyemi Monsurat, a 100 Level student of Banking and finance at Adekunle Ajasin University, Akungba Akoko, Ondo State, said it has really affected her negatively as withdrawing is a problem and also making transfer.

“Imagine collecting #3000 with #600 charges. It sucks a lot and those point of sales (POS) people their own is too much. They collect 20% on what you withdraw.

“Also, It has affected my feedings and I can’t buy foodstuffs due to charges and hunger is real”, she lamented.

Delay in debit alert hinders movement, business

Igbekele Olabisi Temidayo popularly known as SIR.TEMZY a 300 Level student of Public Administration at AAUA, said it has not been easy to cope with the scarcity of the new naira notes. He lamented that prices of things in the market have skyrocketed which makes the cash at hand not even sufficient.

READ ALSO:NEWS REVIEW… 2023 and the INEC transparency test. Why is APC afraid of BVAS?

This had led to something akin to “survival of the fittest”. He narrates his ordeal: “In a struggle to survive with the present state of the country, we’ve all resolved to online transactions by transferring funds from one bank to another. Funny enough, if the recipient didn’t get the alert on time, you might have to wait for a long period of time just for confirmation that the money you sent has been delivered to its destination.

“Imagine having money in your bank account but still borrow money from your friends and family just to survive, this is as a result of the scarcity of the new naira notes. This new development is not impressive at all.

“There are countless challenges that I can’t even mention, a perfect example was when I wanted to go to a particular area but the bike man didn’t have a functioning account number. That has been a big challenge to me and this has eventually forced me to stay at home.

“Another scenario was when I went to buy some things at a provision store in my area, then I made a transfer that was successful but I didn’t get a Debit alert at that moment and even the recipient didn’t receive the Credit alert as well. But because I was known as a man of integrity, I was allowed to go home. Then I came back the next day to show them the debit alert I received after I left the scene the previous day.

“Of recent, I hardly go near the school environment because I don’t have any cash to pay those shuttle drivers. I can’t imagine making a transfer of just #100 to the shuttle drivers, then wait again to receive debit alert before leaving the premises. That’s definitely not a good idea”.

‘The rich also cry’

For Shittu Abass Opeyemi a 100 Level student of Political science schooling at AAUA, the scarcity of the new naira note is a great mishap for the society, individuals and the country at large.

He lamented that the naira scarcity had made people, who have money in their account, stranded, looking like ones that don’t have a dime as it deprived him of buying or acquiring things he needed in school.

He mentioned that one of the challenges this has caused was the hike in POS agent service fee, fighting in banks and increase in citizens’ frustrations.

He said, “I look like someone that doesn’t have a dime, this issue has made the rich suffer for their money.

“I can’t get things I need in school because there’s no cash. Also, there have been queues, fights in banks, and these add to the frustration of the citizens.”

‘I can’t eat because of POS Charges’

Aiyenuro Promise, a 100 level student of industrial chemistry in AAUA also maintained that he finds it hard to get food due to the unnecessary increase in money withdrawal charges caused by the emergence of the new notes.

According to Promise, the situation in the state had been frustrating, as he stressed that there was no need for the redesigning since both have the same value.

He said, “From my own perspective, I feel this scarcity of the new naira notes is annoying and unpleasant as there’s no need for changing the naira notes because both notes have the same value in terms of trading.

“The challenges I am currently facing on the issue are all about the increase in money withdrawal charges which is way too awful, I can not buy enough food, also, increase in bank queues,” he lamented.

Also, a student of Mass Communication from Osun State Polytechnic, Fathia Idera narrated her ordeal on how the new notes had affected her academics.

Fathia explained that quite a number of students fainted during school hours as they could not get cash to buy food.

She further explained that the school market was closed down as they refused to accept old notes while students were unable to get something to eat.

“Everyone starved till evening until it was announced that the deadline was extended,” she added.

She said, “My challenge is POS attendants who also claim new notes scarcity and raise the charges inconsiderately. Fuel stations don’t accept old notes nor transfer or any form of online banking transactions, Market closed down, sudden hike in transport fares and many more”.

Since bank users are not able to cash out their money in new notes, they come up with different dramas; some stripped themselves, some went into fisticuffs with personnel while many forced themselves in without being accepted by the bank security guards.

Students Are Facing ‘Shege’ — NANS PRO

In an interview with the Public Relation Officer of the National Association of Nigerian Students, Giwa Temitope, a student of University of Lagos said the new notes are really affecting students who have been very broke.

According to him, students now withdraw N10,000 for N2,000, lamenting that it is disgraceful to use money to buy money..

He said, “We buy money with money, which is so discouraging. People are curious to see the betterment of the government outcome since they made a promise to get it resolved within days.

“How can you ask us to pay N2,000 to get N10,000? This is so disgraceful.”

He therefore added that he had faced many challenges due to the naira scarcity.

He said, “I have seen several ‘shege’ including ‘ banza’, there are some assignments I should have submitted a week earlier but couldn’t due to the new naira note issues and fuel scarcity.

“You can imagine staying at Ikorodu and schooling at Yaba in Lagos, going to school everyday with spending expenses and feeding isn’t easy at all.”

He therefore urged the government to provide adequate cash, stressing that politicians are now hoarding the cash.

He said, “The solution to the problem is making the new cash available massively as the politicians are already hoarding money for elections.”

Students Should Be Careful Of How They Spend, Lecturer Advises

A lecturer at AAUA, Mr. Lamidi Ishola Lamidi, advised students in Nigeria to be careful on how they spend their money, as the naira scarcity worsens.

According to him, POS operators collect #300 for #1000, which he described as extortion and “total madness”.

He said, “it has been very difficult for Nigerians, some have been exploiting their fellow countrymen on account of this scarcity of the new notes, for you to withdraw now either from POS or other related points, you pay through your noses.

“To withdraw 1,000 naira currently in Akungba is now 300 naira per charge which is pure madness and you wouldn’t blame them. Mobility to buy things now is difficult.

“One has to be very careful now with the way one spends money. It’s a very awful scenario. The authority is funny and the idea may be good, but implementation is bad which is causing a lot of hardships to the masses. So the government should address this issue once and for all.”

He further lamented that he will “not be in school because of this issues, if I don’t have cash. I can’t even transfer money now as it is very risky because I did one and the money didn’t drop and I was debited.”

Engineer Benson, a Lecturer at Ekiti State University, Ado Ekiti has also lamented the situation, stressing that filling stations are worsening the situation by not accepting transfers nor POS.

According to him, 90% of filling stations are receiving cash irrespective of what they want to do as there is no clear solution to the problem.

He also lamented that Nigerians are frustrated as they are not able to get the cash.they need for their daily transaction.

He said, “one of my challenges was when I was in Ilorin, Kwara state, where I bought pepper without cash by transferring through interbank and I was asked to add charges to my transfer which is quite understandable with the cashless society.

“Most citizens are the ones mounting pressure on themselves because if everyone goes with the policy of transferring, the money will surely go into circulation and help to curb the situation.

“By now, the CBN should have 60% of the new note in circulation because it is very difficult for everyone to run a cashless policy in Nigeria. The POS should not be judged because the charged according to the amount placed on them from the banks. Accepting the policy is not really possible for people, especially people from rural society. Imagine being charged a thousand Naira for 10,000 naira. There are people who can’t do without cash which causes some to sleep at banks overnight and some causing chaos in the banks.”

He therefore stressed that the country is not strong enough for the policy it is introducing.

“The country is not ripe for the system they want to bring in as it affects the education of young children and even adults which make them weak,” he said.

However, he urged students and residents to take the issue lightly, mentioning that the problems they are facing “will fade away soon.”

Join the conversation


Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now