What if I told you that since the Central Bank of Nigeria (CBN) released the new naira banknotes on December 15, 2022, I’m yet to get my hands on them? This is a subject I write about frequently and even I have only ever seen them once physically.
As it turns out, there are many Nigerians like me who haven’t seen them either. This is abnormal because according to the deputy governor of the CBN, Aisha Ahmad, 500 million pieces of the new notes were ordered. It’s also alarming because the old notes will no longer be recognised as legal tender by January 31. So why are the new banknotes so scarce?
No more over-the-counter withdrawals
To start with, the CBN on January 7, ordered banks to stop giving the new notes to customers over the counter. Anyone who wants to go to the bank to exchange notes shouldn’t bother anymore.
The exact reason for this policy change wasn’t stated but one possible reason might be fears that the new banknotes are being hoarded. Instead, the CBN directed that banks load their ATMs with the new notes for customers to withdraw. But that has created another wahala.
ATM machines don’t recognise the new banknotes
According to Punch, one challenge that the new naira banknotes bring is that the ATMs don’t know them.
Banks are having to reconfigure their ATMs so they can recognise the new naira banknotes.
Apparently, one bank claimed that only one denomination was accepted. This forced banks to mix up new notes with old ones which if we’re honest, defeats the purpose of the policy.
The CBN has created a hydra-headed problem. It wants you to use the new naira notes — to tackle money hoarders and counterfeiters who have the old notes. But at the same time it is also restricting your access to cash because it wants Nigeria to transition to a cashless economy.
One economic expert believes the CBN is not forthright on exactly how much new notes have been printed because it would have to explain how much it cost to do so. For comparison, the CBN in 2021 spent ₦58.6 billion to print 2.5 billion naira notes. Assuming constant cost — which is impossible — that’s around ₦12 billion to print the 500 million new notes.
What is being done to address these issues?
The Nigerian Senate on December 28, urged the CBN to extend the deadline for phasing out old notes from January 31 to June 2023. The CBN doesn’t send the Senate. It maintains that the deadline won’t be extended.
While the CBN and the Senate are playing a game of who’s who, please don’t slack. The deadline ends in exactly three weeks. Maybe between now and then some of the challenges are resolved and the new notes fully circulate. Or maybe the CBN backs down and extends the deadline. We’ll continue to observe how things play out.