With loud honks from motorists, mercantile chatter, and conductors of commercial buses in lively animated tones calling passengers and bus stops, the market along Ahmadiyya bus stop along the Lagos-Abeokuta Expressway seemed busy as traders exchanged old naira notes with their customers on the sunny Thursday.
Some of the traders told Sunday PUNCH that they were aware of the deadline for the return of old notes to the banks.
A commercial bus driver, Thomas Alan, said he had yet to receive any of the new naira since the notes got into circulation.
The new naira
In October 2022, the Central Bank of Nigeria announced plans to redesign the naira to reduce inflation, tackle currency counterfeiting and reduce excess cash in circulation.
On November 23, 2022, the President, Major Gen. Muhammadu Buhari (retd), unveiled the new N200, N500, and N1,000 notes at the Federal Executive Council meeting in Abuja. The new naira was released into circulation on December 15, 2022, and the apex bank fixed a January 31, 2023, deadline for the old naira notes to cease being legal tender.
The CBN also gave a directive that the maximum weekly limit for cash withdrawals by individuals and corporate organisations is N500,000 and N5m respectively. Those who have a compelling need to withdraw above the approved limits are required to pay a processing fee of three per cent and five per cent respectively.
Traders, motorists lament scarcity
Sunday PUNCH visited the popular Bodija International Market, Ibadan, Oyo State, on Friday to feel the pulse of traders regarding acquiring the new notes.
A trader in the market, Alhaja Kofoworola Sokope, stated that traders expected an extension of the deadline for the deposit of the old notes, adding that the new notes should be made available in large quantities.
She said, “We have been going to the bank to deposit the old notes and get the new ones. However, we are told that we would only get old notes over-the-counter and new notes at ATMs.’’
Asked if she accepts the old notes, she noted, “Yes, we are accepting them. There is no way we will make sales or profits if we don’t. However, by next week, we will stop accepting the old notes but we don’t know how to get the new ones to trade with.”
A fruit seller, Victoria Olajesu, noted that the new notes needed to be released for public use. She stated that if the notes were with people, that would be what they would transact with.
She added, “Since I got here today, I have only got a new N1, 000 note, others have been the old notes. Some people are not even collecting the old notes again despite the fact that the deadline is Tuesday.’’
A pepper seller, Yetunde Dauda, claimed that some Hausa farmers who sold goods to us in the market had started rejecting the old notes.
Dauda said, “When I got to them they told me that they no longer accept the old notes. The government should allow the old and new notes to be spent together until it’s mopped up completely. Since the money came into circulation, I only got a new N500 brought by a customer.’’
Also speaking, a meat seller at the market, Musbau Adisa, stated that he was unaware of the deadline for depositing the old notes, noting however that he had not received any of the new notes.
He said, “He appealed to the government to be merciful and extend the deadline so that members of the public will not suffer the brunt of the scarcity of the new notes.’’
Another trader selling eggs in the market who spoke on condition of anonymity also lamented that she was unable to buy eggs at a poultry farm in Oyo State because she presented old notes.
A crayfish seller identified only as Ajayi said she was unable to reject the old notes from customers, wondering about the urgency in phasing out the old notes. Ajayi said, “The fact that most of those who buy things from us transact with cash makes it more difficult.’’
On the part of a dried pepper seller, Lilian Obi, the CBN should have flooded the banks with new notes before fixing a short deadline for depositing the old notes. She lamented that the policy was causing hardship to the populace.
Same situation in Ogun
One of our correspondents observed that at the Ibafo market along the Lagos-Ibadan expressway, Ogun State traders were receiving and giving out old notes to their customers.
A butcher and meat seller, Abubakar Sanni, said that he was aware of the deadline for the deposit of the old 200, 500, and 1000 naira notes, noting that getting the new notes was the issue.
For a commercial motorcyclist, Sunday Uko, transacting business with the new notes was a big challenge. He said, “You cannot find the new notes easily and it is affecting us.’’
A Point of Sale operator, Dami Lukman, brought out old N1,000 notes to give to our correspondent when she tried to withdraw some cash. Asked if she had new notes, she said she got only old notes from the bank when she went to withdraw some money for her business.
Another PoS operator, Itto Alex, told Sunday PUNCH that she had been unable to get new notes from the bank, noting that with the new policy one could withdraw only a limited amount from the ATM.
He stated, “By Friday, we will stop accepting old notes so that it doesn’t become useless in our hands. Before Tuesday we would deposit whatever remains of the old notes.’’
Economists react
A professor of Economics at the University of Nigeria, Nsukka, Enugu State, Cletus Agu, stated that some people were trying to sabotage Nigeria’s economy.
He said, “I don’t know why people do not obey rules and regulations in Nigeria. The CBN should be allowed to do its job, if people had responded well, we wouldn’t have this problem. We refused to do what was requested of us and that is why we are here today. The CBN should not be interfered with, there should be independence for the CBN to operate because in Nigeria, we interfere in the affairs of the apex bank so much.’’
He stated that the 100 days given by the CBN were enough for people to have deposited their old naira notes.
He said, “When you go to the banks, you will see crowds. Why do they wait until now to make a deposit? Why does it have to be when the deadline is near?’’
Asked about the availability of the new notes, Agu stated rhetorically, “Who said it’s not available? Then we should ask if it is a problem of the CBN, commercial banks, or the people. The CBN is saying the money is available and commercial banks are saying it is not available, then who should be believed? This tells us that something is wrong somewhere. Some people are sabotaging the economy, and should we allow them to continue to sabotage the economy? We all have to bear the brunt one way or the other.”
Also commenting on the development, a professor of Economics and former Head of Department, Department of Economics at the University of Port Harcourt, Rivers State, Godly Otto, stated that the problem with the new naira was hidden and had not been unravelled.
He said, “The CBN stated that by the end of the month, they want the old notes to cease being legal tender. Also, if the CBN wants the new notes to be in circulation, they should have released enough units from October, the notes should have gradually been coming into circulation but I don’t know whether it is the commercial banks who are sabotaging the CBN, or maybe the CBN itself wants to use this same policy to kill two birds at a time.”
Otto stated that the commercial banks which were between the CBN and the public had not been dispensing new notes.
“If the banks are dispensing new notes, traders will be able to run their businesses smoothly. But the major problem that we have now is that even if you pay money into a bank, you can’t get new notes. It appears that the desire to hold onto this deadline is from the President, and if it is from him, how much can the CBN do? Theoretically, the CBN governor is independent but in operation, I don’t think it is that independent,” he explained.
He noted that the pressure being mounted on the CBN governor by the House of Representatives and Senate was misdirected, stating that the pressure should be directed to the President.
He said, “If the deadline is extended for a year and the new notes are not released for circulation, we will still be here. The only solution is that the CBN should be questioned on how much of the new naira notes were given to commercial banks and how much of the new notes were disbursed by the banks to the populace. That should be the solution, it is for the banks to cooperate, and if new notes are well disbursed, there’s nothing stopping the month-end deadline from happening.’’
On his part, an economist, Dr Muda Yusuf, opined that the deadline wasn’t realistic, stating that the problem with the transition from old notes to new ones obviously emerged from the CBN and the banks.
He stated that it would be insensitive for citizens to pay for what they weren’t responsible for. He further said that the so-called sensitisation started barely two weeks before the deadline.
Yusuf said, “The citizens are not to blame. Whatever shortcomings we are seeing are from the CBN and the banks because up until the close of last week, many banks were still dispensing old notes. The logical thing to do is for the CBN to demonstrate responsiveness and sensitivity by extending the deadline. The transition shouldn’t be at all cost because the cost to the economy, small businesses, and the ordinary Nigerian will be grave. Many small businesses and Nigerians might lose money completely. If people in Lagos are complaining of shortage in new naira notes, you can imagine what those in remote locations will face.”
He advised the apex bank to face reality, urging it to listen to the House of Representatives, governors, and senators’ pleas, stating, “These people cannot all be wrong. The citizens are complaining about the inability to get the new notes. People have started selling the new notes and that has created another business for some people; you give them N20,000 and they’ll give you N15,000 in return.
“The deadline was too short. In developed countries, this won’t be done in less than a year so that the lives of people will not be disrupted. The effect of this decision is that it’ll slow down transactions in the market.”
He appealed to the President to prevail on the CBN to extend the deadline by three months.
On insinuation of the policy likely aimed at vote-buying, Yusuf said it should be addressed by other means; through security agencies, and not through a policy inflicting pain on Nigerians.
Reacting to the issue, a social commentator and chartered accountant, Mr Akin Fatunke, said that though the cashless policy was a good one, the implementation was appalling, adding that he was unsure how practicable the deadline would be without an extension.
Fatunke said that he had predicted that implementation would be tough due to the deadline, as it would affect many people.
He added, “As we speak about Abuja, Lagos, Kaduna, Port Harcourt, I mean the central cities, there are many state capitals where there are not enough banks. Places such as Yobe do not have enough banks. If the CBN was ready to flood the country with new notes, how will they achieve that in those areas within the limited time?
“How much of the money will go to people in the villages, the SMEs? Supermarkets, market women, and others are confused about whether to continue with the old notes or not and some are already rejecting them.”
He further said that the resultant effect would be a collapse of the economy and an increase in crimes, noting that the decision was a bit insensitive on the part of the CBN.
Fatunke stated, “I don’t see how the CBN’s deadline will work. They have come up with a cash swap with super agents and Deposit Money Banks. What about community banks? If we are serious about our policy and have the compassion to cater to people, there should be more creative ways to go about this thing. If they don’t know what to do, then those who are knowledgeable in that area should be consulted.
“In social events now, the new notes are being sold. They want to use corruption to fight corruption and in the end, bind us to a halt. There’s no fuel, light, and no currency to spend so it’s a double tragedy. The CBN can achieve this but with a better timeline. This decision might fuel a riot but I will plead with Nigerians to see the greater good in the decision.’’
He urged the apex bank to find alternative means to cater to those under-banked in the hinterlands, especially the farmers and petty traders helping to tame urban migration.
He added that the landlords and tenants association, community development associations, and local government chairmen could be engaged, stating, “There should be proper communication. This is affecting every one of us. We cannot get the new notes to stock the house with essentials and this is atypical of every home. This is not economics; it is curtailing our capacity which is a recipe for confusion. Good concept that should be properly thought of in a better way.’’
