Old Notes: CPPE Decry Conflicting Directives From CBN

The Centre for the Promotion of Private Enterprise [CPPE] is concerned about the conflicting directives emanating from the CBN on where to deposit the old currency notes – whether the commercial banks, or Central bank.  This confusion is inflicting additional pains on already traumatised millions of innocent Nigerians seeking to return the old notes. Amid the chaos which the badly implemented policy has created, it is evidently impractical for the CBN offices to properly handle this process of receiving old currency notes which are still in abundance in the hands of millions of Nigerians.  There is only one branch of the CBN office in each state of the federation and the FCT.  It is practically impossible for the CBN to manage this process without subjecting our citizens to another round of harrowing experience.

“The experience and images and disorderliness of the past few days at the CBN offices graphically illustrates this position.  We appeal to the President Muhammadu Buhari and the CBN to give this process a human face.  The agony and trauma inflicted by the entire management of the policy is unspeakable. Accordingly, We plead with the CBN to allow the old notes to be deposited at the commercial banks to ease the current pains and ordeal of returning the old notes. The process should also be simplified to accommodate millions of rural dwellers, the informal sector players, the over 30 million unbanked Nigerians and several millions that are not literate.  The current guidelines which require filling of forms on the CBN portals, generating codes etc. does not reckon with millions of Nigerians that seek to return their old notes who are not literate, who don’t have access to internets and who are in very remote locations in various parts of the country. They are Nigerians and are entitled to a fair consideration in the implementation process. Most of them are women, micro-enterprises and small businesses contributing immensely to employment, poverty reduction and social stability at the bottom of the economic pyramid of our country.  It is bad enough that their lives and livelihoods have been terribly disrupted and disoriented. We plead with the CBN to review its processes in the interest of fairness, justice and social inclusion”.

Some of the customers relied on an unsigned statement, purportedly from the Central Bank of Nigeria (CBN), authorising Deposit Money Banks (DMBs) to open shop during the weekend to attend to cash needs of their customers. The apex bank, however, denied giving such order. A customer at a bank in Central Area, Sanni Abbas, decried the scarcity of cash and the insensitivity of the DMBs. “The banks are so insensitive. What stops them from opening shop today, and loading their ATMs with cash. We do not even know who to blame between the CBN and the DMBs. If the apex bank has supplied cash to any bank and they are refusing to supply their customers, such a bank should be sanctioned,” he said.

According to Muhammed Sule, another bank customer, the CBN will need to make example of one bank to serve as deterrent. “At a time like this, the banks should understand that it is their social responsibility to ensure that Nigerians do not suffer unnecessarily. If the CBN is actually supplying the banks with the newly redesigned Naira and the old N200 notes, the situation should have ameliorated by now. If the banks are failing in their responsibility to dispense available cash, the apex bank should step in by withdrawing the licences of such erring banks,” he said. NAN reports that the CBN’s Naira redesign policy and phasing out of the old N200, N500 and N1,000 banknotes had been met with resistance across the country due to scarcity of the new Naira notes.

“President Muhammadu Buhari, however, stepped in on Thursday when he authorised the CBN to continue to accept the old N200 banknote as legal tender for additional 60 days, till April 10. Buhari, who said this through a national broadcast, however, said that the old N500 and N1, 000 notes had been phased out and would no longer be accepted as legal tender. He said that the additional 60-day concession was as a result of difficulty faced by Nigerians in accessing the redesigned Naira notes. According to the president, the new monetary policy was not meant to punish Nigerians. He said that it was designed to mop up huge currencies outside of the banking system into the system to deepen financial inclusion and also protect the Naira. The president said that there was the need to restore the statutory role of the CBN to have control over monies in circulation.

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“In 2015, currency in circulation was only N1.4 trillion. The proportion of currency outside the banks grew from 78 per cent in 2015 to 85 per cent in 2022. As of Oct., 2022, currency in circulation had risen to N3.23 trillion, out of which only N500 billion was within the banking system, while N2.7 trillion remained permanently outside the system,” he said. According to him, since the policy was introduced, N2.1 trillion of the currency outside of the banking system has been returned to the system. Buhari directed the CBN to intensify collaboration with anti-corruption agencies to check activities of individuals and groups bent on frustrating the smooth implementation of the currency redesign policy. He called on the apex bank to ensure that any institution or person found to be sabotaging the implementation was made to face the law.

“I am not unaware of the obstacles placed on the path of innocent Nigerians by unscrupulous officials in the banking industry, entrusted with the process of implementation of the new monetary policy. I am deeply pained and sincerely sympathise with you all over these unintended outcomes. To stem this tide, I have directed the CBN to deploy all legitimate resources and legal means to ensure that our citizens are adequately educated on the policy. I have similarly directed that the CBN should intensify collaboration with anti-corruption agencies. Any institution or person found to have impeded or sabotaged the implementation should be made to bear the full weight of the law,” the president said.