Nigeria: 27 Days to Retirement of Old Naira Notes, Analysts Urge CBN to Intensify Awareness

Abuja — Barely 27 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, analysts yesterday urged the apex bank to increase awareness on the initiative, especially among market women, rural dwellers, and other categories of Nigerians at the grassroots.

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.

Emefiele said the move would help to manage money supply, tackle currency counterfeiting and terrorism, among others.

He explained that while the circulation of the new banknotes would commence on December 15, 2022, the new and existing currencies would remain legal tender and circulate together until January 31, 2023, when the existing currencies shall seize to be legal tender.

Emefiele had insisted that the January 31 deadline remained sacrosanct, adding that the 100 days provided for people to deposit existing banknotes in commercial banks was adequate.

President Muhammadu Buhari, subsequently, on November 23, 2022, unveiled the redesigned banknotes during the weekly Federal Executive Council (FEC) meeting.

But the Senate last week urged the central bank to extend the withdrawal date of old currency notes from January 31 to June 30, 2023.

But analysts told THISDAY in separate interviews that the new banknotes had not been easily accessible to Nigerians since they were introduced. They also said the central bank needed to increase awareness of the currency redesign, noting that many market women and rural dwellers are currently rejecting the new legal tender.

Speaking in an exclusive chat with THISDAY, Professor of Finance and Capital Markets, Nasarawa State University, Keffi, Professor Uche Uwaleke, said though he did not support calls for an extension of the deadline for withdrawal of the old notes at the end of the month, 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 done in 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.”

Commenting on the development, also, Managing Director/Chief Executive, Dignity Finance and Investment Limited, Dr. Chijioke Ekechukwu, stressed the need for the CBN to boost education and awareness of Nigerians, pointing out that the rural dwellers “prefer the currency they know and would rather not sell than to receive the new naira”.

According to the former Director General, Abuja Chamber of Commerce and Industry (ACCI), “The awareness has to be increased by CBN. Many market women and rural dwellers are rejecting the new currency, even now. They prefer the currency they know and would rather not sell than receive the new naira. In rural communities, therefore, they may encounter a scarcity of the new currency and may not be aware of the deadline.

“The circulation should be intense by now to enable everybody to have access in good time. By now all ATMs should be dispensing new notes and banks should by now be paying only new notes. That’s the way to go, in order to achieve the desired milestone.”

On his part, Managing Director/Chief Executive, SD&D Capital Management Limited, Mr. Idakolo Gbolade, said the deadline for the use of the old banknotes could see Nigerians scrambling for the new notes, which are “limited in circulation and is facing rejection from the market traders and rural dwellers due to lack of adequate education and awareness”.

Gbolade said, “Since the introduction of the new naira notes, it has been fraught with scarcity and counterfeiting problems. The deadline for the use of the old notes at the end of January 2023 will see Nigerians scrambling for the new notes.

“The major implications, when the old legal tenders become void, is that it would lead to loss of value for those having the old notes and could lead to protests by the masses who are already impoverished, as it were, to still be at risk of losing the little they have acquired.”

He said, “The economy will also feel the impact because, according to statistics from CBN, 80 per cent of cash in circulation are outside their control, so losing such huge amounts of cash because of the deadline for changing to the new notes could portend great danger for the economy.”

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