The low circulation of the new naira notes (N200, N500, N1000) in the country is sending a mixed signal that the Central Bank of Nigeria (CBN) may likely not meet up with the 31 December deadline on the old currency.
Some bank staff who spoke to TechEconomy on Monday said ever since the Supreme Court ruled that the old notes will remain legal tender until December 31, 2023, the CBN hardly delivers the new notes to commercial banks.
Nigerian deposit banks have been largely dispensing the old naira notes through Automated Teller Machines (ATM) and paying over the counter.
“The amount of old notes I see the banks give out to customers as of now is a call for concern. If we aim to meet the December 31st deadline, by now the banks should solely be releasing new notes, allowing the old notes to naturally go out of circulation without any stress,” staff from Access Bank who prefer her name not to be mentioned said.
According to a Customer Service Specialist at GTB, the CBN at the beginning of the year usually conveys new notes to various branches, however, “the story isn’t the same today.”
He admitted that banks have not been issuing out the new notes as they should but Nigerians aren’t complaining as long as there is no scarcity.
Background Story – Naira Redesign Policy
Governor Godwin Emefiele, CBN Governor on October 26, 2022, announced in a press conference the intention of the apex bank to implement the naira redesign policy.
Governor Emefiele said the recent development in photographic technology and advancements in printing devices have made counterfeiting relatively easier.
“In recent years, the CBN has recorded significantly higher rates of counterfeiting especially at the higher denominations of N500 and N1,000 banknotes,” Emefiele said.
“Although global best practice is for central banks to redesign, produce and circulate new local legal tender every five to eight years, the naira has not been redesigned in the last 20 years.
The CBN began the implementation of the new naira policy on December 15, 2022. The policy incorporates setting weekly withdrawal limits for individuals (N100,000) and corporate entities (N500,000), as well as redesigning N1000, N500, and N200 notes.
Consequently, some state Governors initiated a legal battle against the CBN which led to the final judgment that apex banks should release old notes by 31st December 2023.
Economic Loss
The new naira redesign policy backfired leading to scarcity of notes, suffering, economic losses, and social unrest across the country. Physical cash was largely unavailable and that crippled many activities in the country.
Nigeria lost N20 trillion to the policy, according to a report by the Centre for the Promotion of Private Enterprise (CPPE).
