Nigeria’s central bank is racing against time to announce an extension of the deadline for the old naira notes to be used.
In an effort to beat its January 31st deadline and avoid a currency circulation crisis for the distribution of the redesigned naira notes, the Central Bank of Nigeria has embarked on unconventional moves.
In its latest effort, the CBN will allow citizens to swap old naira notes for redesigned bills from January 23 to boost the adoption and circulation of the new currency before the old bills cease to be legal tender at the end of the month.
The latest move will allow Nigerians to swap their old for new notes, bypassing the traditional baking system. A source cognizant of the arrangement said the move may allow point-of-sale operators a bigger role to facilitate the process.
However, most Nigerians still have the old notes, facing the choice of either spending it quickly or swapping them for new notes.
It may be recalled that five days ago, the CBN dispatched some of its directors to sensitize the public about the currency change exercise.
Dr. Abubakar Abdullahi Kure, a CBN director/managing director of NIRSAL MicroFinance Bank, who led the Federal Capital Territory (FCT) team to kickstart the sensitization exercise, took the campaign to the palace of the Ona of Abaji and Chairman, FCT Council of Traditional Rulers, Alh. Adamu Yunusa.
According to him, top CBN officials were meeting opinion leaders, including traditional and religious leaders throughout the country, who would carry the message to the grassroots.
However, with less than 10 days to go, there is little time left for the central bank to decide whether it will announce an extension of the deadline, or set itself up for a currency circulation crisis.
What experts are saying
Analysts say the late sensitization exercise is akin to putting the cart before the horse.
They say the appropriate government agencies should have embarked on the sensitization exercise long before now, and not leave such a responsibility to CBN directors to carry out.
Samuel Ugwu, a social affairs analyst, told Nairametrics that the CBN has apparently foreseen that the time left to complete the exercise is not much, thus embarking on the new fire-brigade approach to the problem.
He said the National Orientation Agency should have been empowered from the get-go to give adequate orientation to the public, especially in rural Nigeria. Ugwu said with 7 days remaining, there is no way the CBN will be able to complete the exercise on time.
It is noteworthy that to date there are some banks still stocking their automated teller machines with old naira notes or a medley of old and new notes.
Dr. Felix Echekoba, a lecturer in the Department of Banking and Finance at Nnamdi Azikiwe University said as the deadline fast approaches, the CBN will have no option left but to extend the date, otherwise, many Nigerians will lose their hard-earned savings to a system that does not work.
An importer who operates at the Alaba International Market in Lagos, Mr. Paul Akindinobi, told Nairametrics that bringing POS operators to take part in the swap at this time is ‘medicine after death.’
“Everything should have been put in place long before the apex bank issued a deadline.” He also said having CBN directors go out on sensitization exercise depict confusion in the government.
“What is the job of the National Orientation Agency? What is the job of the Ministry of Information? Should local governments not be active in this exercise?” he asked.
A field survey conducted by Nairametrics also reveals most banks still do not have the new currency notes to give out.
One banker who texted Nairametrics explained, “they (banks) don’t pay it (new naira notes) again over the counter except at the ATM.”
The explanation is also in line with the central bank’s directive that banks should not issue the naira notes over the counter but via ATMs.
However, when we approached some ATM machines in the Lekki and Ikeja parts of Lagos, most ATMs still dispensed the old naira notes. Only a few dispensed the new naira notes.
The central bank will also have to contend with the 2023 election campaigns which appear to have garnered more of the attention of Nigerians. Thus a sensitization late in the game might appear futile for the apex bank.
As the January 31st deadline approaches, Nigerians with the old naira notes will have to be circumspect about holding the old naira notes.
This could trigger a rush to spend while merchants may also be forced to start rejecting old notes.