Is the Naira Currency Exchange Deadline Extension Long Enough?

of central bank of nigeria (CBN) has extended the deadline for replacing old notes with new designs. The old banknotes were scheduled to be abolished on January 31, but the deadline has been extended by 10 days. But there are growing calls for a further extension amid concerns over supply shortages.

October 2022, President of Nigeria Muhammadu Buhari New naira banknotes launched to combat counterfeiting, terrorism financing and illegal stash of cash. The redesign of the N200, N500 and N1,000 banknotes includes a fixed expiry date of 31 January 2023, phasing out older naira notes and replacing them with new naira notes.

this week, Godwin Emefile, the governor of the Central Bank of Nigeria (CBN) has extended the deadline to February 10, but some say that is still not enough. Chaotic scenes have been reported at banks as people queue up to exchange banknotes.

Even the president has admitted that he is “aware of the cash shortages and difficulties people and businesses are facing because of Naira’s redesign.”

Emefil’s statement on the progress of Naira’s redesign implementation

at Emefile latest statement, he thanked the President of Nigeria for his support of the initiative. He explained that the policy was launched because only N500 billion of the N3.23 trillion in circulation was within the banking industry, he said people should keep the rest of his N2.7 trillion at home. said that

Godwin Emefile, Governor of the Central Bank of Nigeria

Emefiele said in a statement: This leaves about N900 billion (N500 billion + N1.9 trillion). To achieve effective distribution of the new currency, CBN has taken the following steps:

Procedures for effective bill distribution
  • “We have held several meetings with the Depository Bank (DMB) to provide guidance notes on the processes that must be adopted in the collection of old banknotes and the distribution of new banknotes to all Nigerians. contains specific instructions to the DMB to load new banknotes into ATMs across the country to ensure a fair and transparent mechanism for distributing new banknotes to all Nigerians.
  • “We launched a national awareness campaign through print and electronic media to raise awareness about the redesigned Note to Nigerians. This included working with national orientation agencies, all across multiple channels. of Nigerians.
  • “We have 30,000 super agents deployed across the country to support cash swap initiatives in hinterlands, rural areas and underserved areas of the country’s banks, allowing the weak and underprivileged to buy old banknotes. I made it possible to exchange/replace.
  • “We have dispatched all staff, especially assistant directors, deputy directors and directors in Abuja to all CBN branches across the country to participate in a massive mobilization campaign and monitoring programme, and to reach out to 36 deposit banks, agents and branches. Cooperated with administrators of federal states.
    “This is to ensure compliance with all guidelines already issued for the smooth implementation of the programme. Although we have received reports of violations by some bank branches, the EFCC and ICPC agreed to send staff to all CBN and DMB branches nationwide to participate in monitoring the implementation of these guidelines, in cooperation with the executive chairman of the to comply.
Agent Naira Swap Initiative

“We are pleased to have achieved a success rate of over 75 per cent of the 2.7 trillion Np held outside the banking system so far. Take advantage of the opportunity to exchange the Agent Naira Swap initiative and the exercise of the CBN senior staff national sensitization team.

“All Nigerians legally earning naira and locked up, except for those who keep illegal/stolen naira in their homes for speculative purposes, are urged to exchange their legally locked money for exchange. We aim to give them the opportunity to deposit with CBN.”

deadline extension

The most notable part of the announcement was the 10-day extension for Nigerians to trade old banknotes. Previously, the trading deadline for the old banknotes was 31 January 2023 (he was 10 February 2023 for the new banknotes).

However, there were some Defects in this rollout36% of Nigerians do not have a bank account. What this means is that 36% of the adult population cannot deposit old banknotes into bank accounts and exchange them for new ones.

At least that was the first realization. Following Emefiele’s statement, an initiative appears to be in place to allow these underserved segments to exchange notes. Time will tell if these are effective.

political incentives

Some question the timing of the policy’s introduction. It was just before the general election, so some speculate that political incentives may have played a role. Aisha Ahmad, the Deputy Governor of the Central Bank of Nigeria assured otherwise.Emeifele said in a statement that the redesign of the currency should deter political bribery. however, Stephen Vas of of conversation, This may result in foreign currency being used instead.

not enough supply for demand

In theory, extending deadlines is a good thing. This gives many people the opportunity to exchange their expiring currency for new currency. Critics of the change, however, quickly found flaws in the initiative. The most prominent problems were the lack of supplies and tight deadlines.

In December, Ahmad announced that Apex Bank 500 million redesigned notebooksHowever, when questioned later, she admitted she didn’t know how many notes were printed.

These concerns carried over into the new year. The House has subpoenaed Emefierre four times in the past two months due to confusion over currency redesign. Due to a possible arrest warrant for him, Emefiele said he appeared before the House of Commons on January 31.

This was because the House did not feel the initiative had served its purpose. Speaker of the House, Femi Bahabi Mirasaid: “How does the money get to the people? The people don’t get the money. That’s what we were trying to clarify, and that’s exactly what we’re trying to do.”

Ultimately, CBN created an initiative to accelerate Nigeria’s transition to a cashless society. With this, withdrawal limits were implemented. An individual could withdraw his N100,000 (US$222 at the official exchange rate) and a company her N500,000 (US$1,111) per week.

However, following concerns that this would impose hardships on Nigerians, these limits have been raised N500,000 per week for individuals and N5 million ($11,111) for businesses.

building tension

As the deadline for exchanging banknotes approaches, more and more ordinary citizens are panicking to exchange their old banknotes. However, as mentioned above, not enough notes were printed. As a result, banks did not have enough banknotes to exchange. physical quarrel Between bank customers.

These heightened tensions have prompted the governor to Nasir El-Rufay The Kaduna state president pleads with the president to extend the February deadline further. According to ThisDayLive, the governor told the president that the public was suffering and traders were losing goods due to lack of sponsorship. Tomato sellers who traveled to Lagos with their goods were faced with wasted produce because people didn’t have the money to buy them.

Despite these pleas, on February 3, Emifiere insisted there would be no further extension.

“I understand the turmoil and I am pleading in the name of God. We are on our knees begging people to show understanding.

“Eventually the limits will be lifted and eventually the restrictions will be lifted and people will be able to do business as they have in the past,” he said.

  • Francis Bignell

    Francis is a journalist and leading correspondent in Latin America, with a Bachelor’s degree in Classical Civilizations and a professional interest in North and South America.

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