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New Naira Scarcity: CBN Reveals Why New Notes Are Not In Circulation

Many Nigerians are bemoaning the lack of the newly designed naira notes as the Supreme Court’s deadline of December 31 regarding the legal status of the old naira notes approaches.

Approximately 80% of the naira notes used by Nigerians today are old notes, according to information.

Recall that the Supreme Court’s seven-member panel, chaired by John Okoro, had decided that the old and new notes should be used concurrently until the end of the year.

Despite the ruling that the notes can be used side by side, bank customers across the country have admitted that a large portion of the cash they have been getting at ATMs and banking rooms is old money. Customers hardly ever pay traders and transporters with the new notes.

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There were still lines of clients waiting to withdraw cash up to the weekly cap of N20,000 at several of the bank branches visited in Lagos’ Victoria Island, Matori, and Ikeja area, even though banks could only give out the old notes.

Before the deadline in December for the phase-out of the old notes, many Nigerians are stockpiling the new naira notes, according to CBN officials who spoke to Newsmen.

According to a CBN source, there is currently roughly N1 trillion in circulation, and additional money is being generated and disbursed.

The insider, who is involved in the top bank’s important monetary policy decisions, continued, “People, including ordinary Nigerians, are stockpiling the new notes due to uncertainties.

“You know December will soon come. That is when all the old notes will cease to be legal tender. So people are stocking the new notes to mitigate uncertainties over the old or new naira notes.”

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The CBN official advised the “authorities to engage in massive enlightenment and reassurances that the new notes will be available in and after December.”


According to the official, the CBN “releases N70 billion to the banks to distribute to their various branches every day, and they are largely old notes by way of strategy because of the phenomenon I spoke to you about earlier.

“When people see the new notes, they just take them out of the system and don’t bring them back.

“That is the reason the CBN is dishing out the old notes so that they become available and citizens can make transactions very easily. That is the current position.


“So, it’s not that the CBN is not releasing money at all.”

When told that Nigerians want the new notes, the CBN official said: “Why are people looking for the new notes if they want to buy goods and services and money is available?

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“They should leave that strategy to the CBN. That’s the bank’s problem because, by the end of the year, all the old notes being released now will also be removed from the system.

“For now, that is not the problem of the citizens.

“Those complaining are looking for the new notes to hoard. That’s the implication.”

What is happening, the source said, “is that the new notes are not returned to the commercial banks.

“If they can be returning them to the commercial banks, the banks will also give them out to the citizens to use, but it appears that that is not happening,


“I don’t know what the fancy is in the new notes that they are hoarding them again.”

According to the source, the central bank will continue to print new notes up to December.

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According to the CBN official, the apex bank’s current goal is to address immediate needs, alleviate suffering, and make money, both new and old, readily available so that people can use it.


The source added: “But the CBN has its own strategy to ease out the old notes before the end of December, so the implication is that there is the likelihood that more new notes will come into circulation.”

The initial attempt to revamp the currency failed in part because regular residents were unable to spend smaller denominations of N100 and N200 notes.

Admitting that that was a lapse in judgment on the part of the CBN, the official told The Nation: “I envisaged that one. Some of us have also made that point because printing of the lower denomination notes will reduce the prospects of hoarding and counterfeiting of large denomination notes.


“That will help to meet the objectives of the CBN to minimise hoarding and counterfeiting of large notes.

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“You know it is the large denomination notes that are very vulnerable to counterfeiting because of the huge profit they make from it.


“So the possibility is there that the CBN will print more of the lower denominations in line with its own objective.”


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