CBN deadline and new notes circulation crises

The governor of Central Bank, Godwin Emefiele, shortly after the Monetary Policy Committee meeting on Tuesday stated that the 31 January deadline for the collection of old naira notes remains sacrosanct. Emefiele’s statement came after the National Assembly deliberated on the need for the apex bank to extend the collection of the old naira notes […]

The governor of Central Bank, Godwin Emefiele, shortly after the Monetary Policy Committee meeting on Tuesday stated that the 31 January deadline for the collection of old naira notes remains sacrosanct.

Emefiele’s statement came after the National Assembly deliberated on the need for the apex bank to extend the collection of the old naira notes to June in view of the rush with which the policy is being implemented and how the rural and unbanked communities would suffer the consequences.

It could be recalled that last year, the CBN announced its decision to redesign the N200, N500 and N1000 notes in its quest to move the country to a cashless economy.

Though the policy has continued to generate mixed reactions from Nigerians, it has the blessing of Mr President. There is no gainsaying the fact that the policy is a big blow to money launderers, kidnappers and vote/voters’ buyers.  However, it has come at the wrong time. Majority of Nigerians do not have bank accounts and 80 percent of transactions in the country are cash backed.

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Besides, lack of good network systems coupled with erratic power supply have made electronic banking services across the country, especially in rural areas, more difficult and unreliable to Nigerians.

The CBN’s January deadline is like putting a cart before the horse. While the grace period granted to Nigerians to deposit their old notes was 90 days; there was inadequate enlightenment and sensitization campaign not only by the CBN but also by other government agencies such as the National Orientation Agency to enable Nigerians to be abreast of the policy.

The blame games between the CBN and Deposit Money Banks (MDBs) has compounded or worsened the scarcity of the new notes. CBN insisted that it has released adequate newly printed notes to banks to upload in their respective automobile teller machines (ATM), while banks continued to disperse old naira notes to the surprise of desperate Nigerians. Nigerians have been eager to obtain the new notes but there are nowhere to be found.

Most of the ATMs don’t have the new notes to dispense to desperate Nigerians who are all out to get the notes for their transactions.

The development is already taking a negative tolls on business activities across the country as people are now rejecting the old notes in the face of non availability of the new notes. This is quite unfortunate!

Yes, the CBN’s swap policy in which mobile money agents are allowed to swap new money to the tune of N10,000 directly to rural Nigerians is good and may hasten quick circulation of new notes but the few days remaining are not enough to penetrate remote communities and other riverine areas.

Why has the apex bank waited until now before coming up with the cash swap policy? They ought to have done this a long time ago.

Besides, the CBN has also waited until the last minutes before they hurriedly embarked on sensitization campaigns to markets and other informal sectors of the economy.

The decisions by the merchants or marketers to stop collecting old notes before the deadline amidst scarcity of the new ones will fuel naira circulation crises. The POS operators who are supposed to ease transaction difficulties have been making brisk businesses. They have increased charges ranging from N500 to N1000 per N10,000 deposit.

With the deadline fast approaching and many Nigerians yet to deposit or access the new redesigned naira, CBN should as a matter of urgency extend the period as being demanded by Nigerians.

Ibrahim Mustapha Pambegua wrote from Kaduna State