Naira scarcity, confusion over old notes worsen

BY EMEKA EJERE

Conflicting steps by constituted authorities are making the journey to normalcy even more turbulent, as Nigeria struggles to come out of crisis emanating from the implementation of the naira redesign and swap policy.

The resulting acute cash shortages in the country have paralysed socioeconomic activities, bred violence, and inflicted suffering on the citizens, who cannot access their money in the banks, worsening the prevailing hunger and anger nationwide.

The situation became even more chaotic when commercial banks, motorists and major sales outlets across the country started refraining from the collection of old notes.

The CBN had on October 22, announced the introduction of redesigned N200, N500 and N1,000 notes into the country’s financial system. But since the notes were unveiled, Nigerians across different parts of the country have been struggling to access them from banks and Automated Teller Machine cash points.

As Nigerians expressed frustration over their inability to access the new notes, the apex bank extended the deadline for the phasing out of the old notes from 31 January to 10 February. Yet, many Nigerians have had a hard time getting the new notes.

Last week, the Supreme Court gave an order restraining the CBN from going ahead with the implementation of the February 10 deadline, following a suit filed by the governors of Kaduna, Kogi and Zamfara States. It later adjourned the case to February 22.

But both President Mohammadu Buhari and the CBN governor, Godwin Emefiele, refused to adhere to the court order, a development that has stoked heated debate among legal minds.

Among its objectives, the policy sought to flush out the billions of hoarded currencies that had led to a shortage of clean banknotes in circulation, neutralise the rising currency counterfeiting, and force many more persons into the formal banking system and towards achievement of the cashless economy aspiration.

The change, amid a tight deadline just before the elections, was also to maroon the billions of naira known to have been stockpiled by politicians, including governors and other state actors, to influence the elections. Properly executed, the policy would have forced them, kidnappers, terrorists, bandits, other criminals, and hoarders to either move their immense hoards into the banks or be saddled with worthless old notes, analysts say.

Our survey last week showed that many Nigerians are still in possession of the old naira notes due to poor circulation of the newly designed currency, but are not able to carry out their daily transactions because banks have commenced the implementation of the deadline since Monday (February 12).

“There are still lots of old notes in circulation apart from the ones some people have stashed away. So stopping it now and not pumping in more new notes, I believe, will cause a lot of pressure. Starting from Wednesday, the pressure will be so much,” a bank staffer, who declined to have his name in print told our correspondent last week.

“Come to think of it, most politicians still have that money. So they will want to instigate the masses. If the pressure is huge, there will be an outburst.”

On Thursday, President Buhari directed the CBN to extend the use of the old N200 notes. But in what analysts consider an affront to the Supreme Court, the President insisted that the CBN directive on the phasing out of the old N500 and N1,000 notes remains.

But Governors Nasir el-Rufai of Kaduna State, Babajid Sanwo-Olu of Lagos State and Dapo Abiodun of Ogun State have since directed residents of their respective states to continue using the old naira notes, threatening to sanction any individual or business that rejects same.

A total of ten governors, all of whom are of the ruling All Progressives Congress, are now part of the suit challenging the currency swap deadline at the Supreme Court.
Spreading protests.

In the midst of the uncertainties, many Nigerians have taken to the streets on major cities to protest the hardship caused by the policy. In parts of southern Nigeria, many protesters were said to have sustained injuries, while some were arrested for vandalising bank properties.

On Wednesday in Benin City, Edo State, residents attacked some of the banks in the city, including Ecobank, First bank and UBA, according to the police spokesperson in the state, Chidi Nwabuzor. Similarly, groups of protesters have also hit the streets in Lagos, Delta, Akwa Ibom, Ogun, Oyo and Rivers states. The protest necessitated some banks to suspend activities and several shops and market stores were shut.

However, the mother of all confusions was witnessed on Friday when the CBN denied directing banks to collect old N500 and N1,000 notes from members of the public. This was hours after banks had started issuing notice to their customers, informing them to commence deposit of old naira notes up to a maximum of N500,000, in compliance with a directive purportedly from the apex bank.

“It’s just for amounts N500,000 and below,” Osita Nwanisobi, CBN’s spokesperson had confirmed to TheCable.

But in a statement issued hours later, Nwanisobi denied the development, claiming that the CBN did not authorise banks to collect the old notes.

“The attention of the Central Bank of Nigeria has been drawn to some fake and unauthorised messages quoting the CBN as having authorized the Deposit Money Banks to collect the old N500 and N1,000 Banknotes,” the statement reads.

“For the avoidance of doubt, and in line with Mr. President’s broadcast of February 16, 2023, the CBN has been directed to ONLY reissue and recirculate the old N200 banknotes and this is expected to circulate as legal tender for 60 days up to April 10, 2023.

“Members of the public should, therefore, disregard any message and/or information not formally released by the Central Bank of Nigeria on this subject.”

However, contrary to the claim by the CBN that it did not instruct the banks to continue to collect the old notes from depositors, some Deposit Money Banks on Saturday opened their branches to customers for the purpose of collecting old N500 and N1,000 notes for deposit into their accounts. This may be related to threat from the state government to close down any institution that rejects the notes.

“I just heard from two persons, who confirmed that they were able to deposit their old N500 and N1,000 notes at the Iju Road branch of GTBank about an hour ago’’, a source told Business Hallmark on Saturday.

‘’I also learnt, though not confirmed yet, that Fidelity, UBA and Sterling Banks opened today to collect the old notes. I think the CBN, or could it be the banks is/are trying to redeem its/their battered image among Nigerians by disobeying the President to collect the old notes, yet not bold enough to publicly announce it for fear of recrimination’’.

An official at Access Bank branch explained to Sunday PUNCH, “We are only collecting deposits of the old notes from those who have filled the form and generated the code. If you don’t have a code, you cannot enter because you will not be attended to. We have been open since 10am and will close by 2pm.”