On 26 October 2022, the Central Bank of Nigeria, led by Governor Godwin Emefiele announced the introduction of redesigned N200, N500, and N1, 000 banknotes into the financial system. The nation’s apex bank had also stated that the new currency will be in circulation from 15 December 2022 and had pegged January 31, 2023, as the deadline for the old note to seize to be legal tender.
Harping on why the bank made the move to redesign the naira notes, Emefiele had said in recent times, currency management has faced several daunting challenges that have continued to grow in scale and sophistication with attendant and unintended consequences for the integrity of both the CBN and the country.
According to him, these challenges primarily include: “Significant hoarding of banknotes by members of the public, with statistics showing that over 80 percent of currency in circulation are outside the vaults of commercial banks; worsening shortage of clean and fit banknotes with an attendant negative perception of the CBN and increased risk to financial stability; increasing ease and risk of counterfeiting evidenced by several security reports.”
“Indeed, recent development in photographic technology and advancements in printing devices have made counterfeiting relatively easier. In recent years, the CBN has recorded significantly higher rates of counterfeiting especially at the higher denominations of N500 and N1,000 banknotes.”
He added that although the global best practice is for central banks to redesign, produce and circulate new local legal tender every 5–8 years, the Naira has not been redesigned in the last 20 years.
“On the basis of these trends, problems, and facts, and in line with Sections 19, Subsections a and b of the CBN Act 2007, the Management of the CBN sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N200, N500, and N1,000 levels.”
However, the policy is being criticized by many Nigerians as it has occasioned hardship in financial transactions. There have been vociferous outcries across the nation both on and offline over Nigerians’ inability to get the new notes, making life difficult for the citizens.
Some banks’ ATMs visited by SecretReporters were laced with Nigerians who were struggling to withdraw the new notes. Like the usual long queues that have gradually become the ritual in the petrol stations and PVC collections centers, so have the queues at ATM stands become, as seen by our reporters.
To exacerbate Nigerians’ plight, the banks have limited their withdrawals at the ATM to just a thousand naira at a time. And, one can only withdraw a maximum of N10, 000.00 per day. To achieve this feat, one will have to make withdrawals of N1, 000 ten times to be able to get ten thousand Naira.
For every withdrawal of a thousand naira, the bank charges N37.63.
To ascertain the growing claims that have sparked mixed reactions across the nation, our reporters visited some ATMs in the Federal Capital Territory to make withdrawals and for every N1,000 withdrawal, they were charged N37.63.
So, for every N10, 000.00 withdrawal, Nigerians pay N376.3.
For those operating the Point of Sale (POS), the story is worse as Nigerians pay through their nose for withdrawals. Though the charges vary across different centers, in some places, Nigerians pay as high as N3000 to collect N10, 000.
Even though Nigerians are being forced to part ways with a chunk of their money to collect the new notes, the struggle to get it has become a tussle as it is scarcely in circulation.
Though the CBN extended the deadline for the old note to seize to be legal to February 10, both the old and new notes have become very scarce.
Several stakeholders have sued for the review of the policy, this is even as the President of the Nigeria Bar Association, Yakubu Maikyau has observed that “President Buhari may have been wrongly advised on the policy.”
In a statement, the NBA, while recalling a similar policy during President Muhammadu Buhari’s military regime in 1984, urged the federal government “to avoid the repeat of the harsh experiences of Nigerians in 1984 when a similar demonetization policy reportedly claimed the life of a trader who committed suicide because he was stranded with about N200, 000 of the old notes.”
Maikyau noted that “…The necessary logistical, infrastructural and manpower support, required for the successful implementation of the (monetary) policy are in short supply”.
The NBA boss who compared the naira redesign policy with the UK government which announced a date for demonetization 18 months in advance, lamented that Nigerians were given “a mere 45 days to swap (the old) naira notes (with new ones).”