The new naira notes remained scarce across the banking sector on Tuesday, even as the January 31 deadline for the expiration of the old ones draws near.
A visit to some banks in Lagos on Tuesday showed that lenders were dispensing mostly old notes to customers. Some banks said a customer could withdraw a maximum of N15,000 in new notes.
The Central Bank of Nigeria (CBN) ordered the printing of 500 million pieces of new naira notes in the first contract, whose distribution started on December 15, 2022, Aisha Ahmad, deputy governor in charge of financial system stability at the CBN, told the House of Representatives on December 22, 2022.
“It is disappointing for the majority of Nigerians and even unsettling for many as the clock ticks towards the deadline for the old naira notes, yet the new notes are barely available,” said Taiwo Oyedele, head of tax and corporate advisory services at PwC.
“Given the far-reaching implications of the old notes ceasing to be a legal tender and the aggressive opposition to the policy from certain quarters, especially by some politicians, one would have expected the CBN to be better prepared for a seamless rollout of the new notes, ” he said.
He said that in the meantime, it would be important for the CBN to clearly communicate the status of the new policy and any implementation challenges.
Read also: ATMs fail to dispense new naira notes on short supply
“Where necessary, the government should consider an extension of the deadline for the full withdrawal of the old notes from circulation,” Oyedele said.
Some Nigerians who have been expecting to get the naira notes have expressed disappointment over the scarcity of the redesigned banknotes.
Ali Musa, a registered agro-products dealer in Dawanu Market in Kano – Nigeria’s largest grain market, told BusinessDay on Tuesday that he was yet to receive payment with the new notes since it was launched in December.
“As you know, our nature of business here is ‘cash and carry’, which means that we deal more with physical cash, and since the redesign of the N200, N500, and N1,000, I am yet to receive any as payment,” he said.
“Many traders in the market are in support of the cashless policy of the Federal Government; the time frame for its implementation is too short and there is a need to review it if it must succeed,” he added.
Onoja Usman, a Lagos-based banker, said the new naira in circulation is not enough and this affects his customers who request to be paid with the redesigned notes.
“What we do is that we mix the new notes with the old notes and pay customers. For instance, if we are to pay N200,000, we give about N50,000 new notes,” he said.
Shehu Abubakar, a Point of Sale (PoS) terminal operator at Jaba Panisau road, Kano, said that since the introduction of the new notes in December, many of their customers have been showing less interest in accepting the old naira notes.
According to him, it has been difficult for PoS operators to secure the new notes from deposit money banks.
Muda Yusuf, director of the Centre for the Promotion of Private Enterprise, expressed doubt over the CBN’s readiness for the project, saying readiness means there must be capacity to print the volume needed and the capacity to distribute. “I think the CBN grossly underestimated what this project requires.”
He said the timeline is ambitious and needs to be reviewed. “This is not a project that you rush. The timeline is unrealistic. If some of those in the urban areas have not seen the new naira, what about the rural people? My take is that they need to review it,” Yusuf said.
Uche Uwaleke, professor of Capital Market at the Nasarawa State University Keffi, 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. Bulk of cash withdrawals from the banks and PoS agents is still done in old naira notes.”
According to him, it appears the banks have been hoarding the new naira notes for distribution to their high net worth customers, most of whom are politicians.
He 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 lopsided manner at 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 elections would have been over by then,” Uwaleke added.
