• Wednesday, June 19, 2024
businessday logo

BusinessDay

Traders protest sale of new naira notes in Onitsha Market

Will 2024 be the year of the Naira?

Traders at the Onitsha Main Market, Anambra State, have protested to the Central Bank of Nigeria (CBN) over the sale of the redesigned N1000, N500 and N200 currency notes in the market by people suspected to be agents of commercial banks in the area.

The traders said because of this ‘dark deal’, commercial banks were reluctant to dispense the new banknotes to the public.

The traders directed their protest to the Anambra State branch controller of the CBN, Benedict Maduagwu, during the bank’s sensitisation of stakeholders on the currency redesign at the Onitsha Main Market.

As a consequence, the chairman of Onitsha Main Market, Innocent Ezeoha, implored the CBN to bring the new naira notes to the market.

Responding, the CBN branch controller, Madugwu, said the apex bank would henceforth mount surveillance on the commercial banks in the area over the development, warning the banks that every money allotted to them had security codes.

He restated that the CBN would sanction commercial banks found hoarding the new naira notes.

He said: “Currency management is a key function of the CBN as enshrined in Section 2 (b) of the CBN Act 2007, adding “the integrity of a local legal lender, the efficiency of its supply, as well as its efficacy in the conduct of monetary policy are some of the hallmarks of a great central bank.

“In recent times, however, currency management in Nigeria has faced several challenges that have continued to grow in scale and sophistication with unintended consequences for the integrity of both the CBN and the country.

Read also: New naira scarcity forces businesses to opt for e-payment

“Some of these challenges primarily include: First, a significant hoarding of banknotes by members of the public. Statistics show that 84.71 percent of currency in circulation are outside the vaults of commercial banks, with only 15.29 percent in the central bank.

“Second, is the worsening shortage of clean and fit banknotes with attendant negative perception of the CBN and increased risk to financial stability; third, there is increasing ease by criminals and risk of counterfeiting evidenced by several security reports received at the Central Bank of Nigeria.

“The benefits of the currency redesign to the Nigerian economy are enormous given that: This policy will help to control inflation as the exercise will bring the hoarded currency into the banking system, thereby making monetary policy more effective.

“It will also help with better design and implementation of monetary policy as we would have much more accurate data on money supply and monetary aggregates. We believe that this exercise would help in increasing financial inclusion, moving towards a more cashless economy, and ensuring greater formalisation of the Nigerian economy

“The new design and current series are to circulate side by side until January 31, 2023 when the current series ceases to be legal tender. We advise members of the public to ensure that they deposit cash holdings in these denominations at their commercial banks.