The Central Bank of Nigeria (CBN) reminded the businesses that the present denominations will stop being accepted as legal cash on January 31, 2023 as part of its campaign yesterday to encourage Nigerians to adopt the new naira note policy.
One thousand, five hundred, and two hundred naira notes are among the denominations that are impacted.
The merchants were given the assurance that they would not be charged any fees, regardless of the amount they deposited in the banks, by Mr. Benedict Maduagwu, the branch controller of CBN, Awka, who headed the team.
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He described currency management as a crucial role of the CBN and bemoaned the fact that Nigeria has recently encountered a number of issues that had continued to expand in scope and sophistication with unintended repercussions for the integrity of the central bank as well as the entire nation.
He claims that among the difficulties is the significant hoarding of banknotes by the general public. According to statistics, as of June 2022, N2.72 trillion of the N3.26 trillion in currency in circulation was reportedly held outside the vaults of commercial banks across the nation by the general public.
He said: “The statistics show that 84.71 percent of currency in circulation are outside the vaults of commercial banks, with only 15.29 percent in the Central Bank and commercial banks’ vaults.
“There is also the worsening shortage of clean and fit banknotes with attendant negative perception of the CBN and increased risk to financial stability, just as there is increasing ease by criminals and risk of counterfeiting evidenced by several security reports received at the Central Bank of Nigeria.”
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Considering that the strategy would help to control inflation and bring the hoarded cash into the banking system, hence increasing the effectiveness of monetary policy, Maduagwu claimed that the benefits of the currency redesign to the Nigerian economy were enormous;
As the nation would have far more accurate data on the money supply and monetary aggregate, he continued, it would also aid in the better design and implementation of monetary policy.
“We believe that this exercise would help in increasing financial inclusion, moving towards a more cashless economy and ensuring greater formalization of the Nigerian economy.
“The currency redesign would also assist in the fight against corruption as the exercise would rein in the higher denomination used for corruption, and the movement of such funds from the banking system could be tracked easily.
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“Although the global best practice is for central banks to redesign, produce and circulate new local legal tender every five to eight years, the naira had not been redesigned in almost 19 years.
“The new design and current series would continue to circulate side by side until January 31, 2023 when the outgoing denominations would cease to be legal tender.
“We advise members of the public to ensure that they deposit cash holdings in these denominations at their commercial banks.
“There is no limit to how much a customer can deposit between now and January 31, 2023 as the CBN has suspended bank charges”.
While bemoaning that some Nigerians were using naira notes to decorate their homes, he urged the traders to investigate other payment methods for their business operations, including eNaira, POS, electronic transfer, USSD, internet banking, and mobile money operators and agents.
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Mr. Innocent Ezeoha, the chairman of the Onitsha Market Traders Union, pleaded with the CBN to release the new currency so that traders may swap the old currency as soon as they finished their daily tasks through January 31.
“We will visit traditional rulers, presidents’ general of communities, markets and churches to sensitize the people on the currency redesign”, he said.
Additionally, he demanded that the CBN order commercial banks to begin issuing the new notes, claiming that there were rumors that some of the institutions were doing so.
The National Orientation Agency, NOA, director for the state of Anambra, Mr. Charles Nwoji, stated in his speech that NOA would spread the message throughout the entire state of Anambra from January 16 to January 31, 2023.
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