By Chinwendu Obienyi
Good as gone goes from zero to sixty in under six seconds and never lets off the gas. If you like your thrillers filled with non-stop action in a race against time through the world’s underbelly, hop in and take a ride.
This quote from Andrew Gross, describes the situation the Central Bank of Nigeria (CBN) is currently facing as the deadline for the cessation of old notes draws nearer.
This becomes rather worrisome as millions of bank customers across the country look frustrated with inadequate supply of the new notes for spending despite the CBN’s insistence that the redesigned notes (N200, N500 and N1000) are in adequate supply.
Several depositors have often alleged that the old notes being ordered to be returned to banks by the apex bank are still being dispensed by cashiers in the banking halls and ATMs.
Furthermore, Point of Sale (PoS) operators confirmed to Daily Sun that new naira notes remain scarce commodities in Nigeria, wondering how the new notes will circulate across Nigeria before the January 31 deadline when the old notes will be withdrawn totally.
Their concern was that some customers have already stopped accepting the old notes for the fear of not being able to get to the banks before the deadline.
A casual look at the CBN’s website showed that its countdown clock for the cessation of the old notes as legal tender is just six days. However, in an effort to beat its January 31 deadline and avoid a currency circulation crisis for the distribution of the redesigned naira notes, the CBN has embarked on unconventional moves.
Daily Sun gathered that Deposit Money Banks (DMBs) are in panic mode as officials of the Central Bank of Nigeria (CBN) widened their sting operations by discreetly inspecting ATMs and banking halls to ascertain their levels of compliance to various directives, including loading the newly redesigned notes into the machines.
A CBN source told Daily Sun that field officers who visited various banks were being evaluated to determine appropriate sanctions to be meted to defaulting banks.
“CBN staff have been visiting many banks and their ATMs in sting operations. Their identities are concealed and they come in as any other customer to observe things and where necessary, call on appropriate bank officials to answer certain on-the-spot questions. Where not necessary, they observe proceedings and leave.
“In all, the CBN officials are writing their reports and we are evaluating them and preparing queries and sanctions. This is a serious business and we won’t tolerate banks sabotaging our efforts. There is no going back on this new naira project and there would be no extension. Those banking on a possible extension should take their money to the bank to avoid losing it. The old notes would cease to be legal tender by January 31. That is why we have deepened our sensitization efforts taking place across the country simultaneously”, he said.
In its latest effort, the CBN launched its cash swap programme, to allow citizens to swap old naira notes for redesigned bills 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 banking system. In a circular issued to DMBs, Mobile Money Operators and Super Agents, the CBN’s Director of Banking Supervision, Haruna Mustafa, said the move will work side by side with sustained nationwide awareness/sensitization programmes, enforced speedy collection of the new notes at CBN branches by the DMBs and mandated issuance of the new notes through ATMs to ensure distribution is fair, transparent and evenly spread across the country.
Under the cash swap arrangement, the old N1,000, N500, N200 notes can be exchanged for the newly redesigned notes and/or the existing lower denominations (N100, N50 and N20, etc) which remain legal tender.
“The agent shall exchange a maximum of N10,000 per person. Amounts above N10,000 may be treated as cash-in deposit into wallets or bank accounts in line with the cashless policy. BVN, NIN, or Voter’s card details of the customers should be captured as much as possible.
To promote financial inclusion, this service is also available to anybody without a bank account. Agents may, on request, instantly open a wallet or account, leveraging the CBN Tiered KYC Framework. This will ensure that this category of the populace are able to exchange or deposit their cash seamlessly without taking unnecessary risk or incurring undue cost. Agents shall sensitize customers on opening wallets/ bank accounts and the various channels for conducting electronic transactions.
Designated agents are eligible to collect the redesigned notes from DMBs in line with the Revised Cash Withdrawal Limit policy. Agents are also permitted to charge cashout fees for the cash swap transactions but prohibited from charging any further commissions to customers for this service”, the circular noted.
A source cognizant of the arrangement said the move may allow PoS 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. Hence, with six days to go, there is little time left for the apex bank to decide whether it will announce an extension of the deadline, or set itself up for a currency circulation crisis.
Experts react
Economic experts have since stated that the late sensitisation exercise is akin to putting the cart before the horse. According to them, the appropriate government agencies should have embarked on the sensitisation exercise long before now, and not leave such a responsibility to CBN directors to carry out.
Abdul Jelili, a stock market operator, told Daily Sun that the CBN has apparently foreseen that the time left to complete the exercise is not much, and added that there is no way the apex bank will be able to meet up with the deadline.
“This fire brigade approach from the CBN is not what should be happening with a few days to the deadline. I mean it is kind of helping but this should have been done as from December 2022. 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”, Jelili said.
Analysts at Nairametrics, said, “The CBN will also have to contend with the 2023 election campaigns which appear to have garnered more of the attention of Nigerians. Thus a sensitisation 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”.