Analysts have urged the Central Bank of Nigeria (CBN) to raise more public awareness on the currency reform implemented, especially among rural dwellers, markets, and other residents at the grassroots level, as the deadline for using old N200, N500, and N1, 000 banknotes as legal tender issued by the CBN gradually approaches. While the new banknotes will begin circulation on 15 December 2022, the old ones will continue to be legal money until 31 January 2023, as indicated by CBN Governor Mr. Godwin Emefiele.
Emefiele stands firm on the CBN stances of the existing banknote deadline, 31 January 2022, noting that the 100 days provided for the people to deposit existing banknotes in commercial banks was adequate. President Muhammadu Buhari, on 23 November 2022, unveiled the redesigned N200, N500, and N1, 000 banknotes during the weekly Federal Executive Council (FEC) meeting. The move was explained to control money supplies and circulation and address currency counterfeiting and terrorism, among others.
CBN should address the availability issues of the new banknotes.
However, the Senate last week urged the central bank to extend the suspension date of the existing currency notes from January 31 to June 30, 2023. Subsequently, analysts also revealed to the media that the government should increase awareness of the new banknotes saying that it has not been easily accessible to Nigerians since their inception. In addition, analysts also lament that most market women and rural dwellers are currently rejecting the new banknotes as legal tender.
Nasarawa State University, Keffi Professor of Finance and Capital Markets Uche Uwaleke told the media that he disagrees with the appeal to extend the deadline for withdrawing old notes but noted that the CBN should address concerns about the availability of the new banknotes. In addition, he explains why he opposes extending it to June 30, 2023: doing so would undermine one of the goals of the currency reform, which is to prevent vote-buying, as the general election would have already taken place by then. Uwaleke said the new banknotes have been in limited circulation for more than two weeks after their introduction on December 15, 2022.
The new notes should be largely circulated by now.
Uwaleke speculated that banks were stockpiling the new naira notes for the holiday season’s delivery to their high-net-worth clientele, the vast majority of whom are politicians. Uwaleke said he expects the CBN to issue additional new notes and supervise bank dispersal if the January 31, 2023 deadline is to be met. In light of the recent changes to the policy governing the maximum amount of cash that may be withdrawn at once, this is now obligatory. Uwaleke predicted a circumstance in which the deadline is prolonged by at least two weeks in light of the sluggish pace and the uneven mentality around the circulation of the new naira notes.
Also, in his remarks, Managing Director/Chief Executive Dignity Finance and Investment Limited, Dr Chijioke Ekechukwu, emphasized the need to create more awareness and enlighten Nigerians. He noted that rural dwellers prefer the currency they already know and would rather not sell than receive the new naira. According to the former Director General Abuja Chamber of Commerce and Industry (ACCI), said by now, the new currency should have circulated very well to enable mass access to it. Also, all ATMs should have been dispensing new notes, and banks should now be paying only new notes. Going this way will make the target achievable.
Nigerians could end up striving for new banknotes.
On his part, Managing Director/Chief Executive, SD&D Capital Management Limited, Mr Idakolo Gbolade, said the new notes have been scarce and impacted by counterfeits, adding that the current note deadline as a legal currency would see Nigerians racing and straining for the new notes. According to him, the most extensive ramifications when the old legal tenders become obsolete is that it would lead to a loss of value for those possessing the old notes, which might result in massive protests by the already impoverished, as it were, to still be at danger of losing the little they have obtained. Gbolade said that losing such vast amounts of money might be detrimental to the country’s economy.
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