By Daniel Bulusson, Esq

Nigeria and Nigerians have been agog with queues, tension, protest, and unease about the scarcity of the New note due to the Naira redesign policy embarked upon by the Godwin Emefiele led Central Bank of Nigeria (CBN). Normally Nigerians in their usual fire brigade approach waited till the deadline before rushing to deposit old notes and possibly get the new note, but alas they were disappointed as once the old notes got into bank towards January 31st deadline, such notes were not released back into the society.

In order to reduce money in circulation, the CBN printed only 500 Billion naira of the new notes and retrieved over 2 Trillion naira of the old notes, hence the scarcity. To avoid any misunderstanding of my standpoint, this article would be divided into (i) Cashless Policy, (ii) The New Naira Policy (iii) Distribution of the New Note (iv) Role of the Banking Sector (v) the Politicians (vi)My ‘Naija’ people, and (vi) solutions moving forward, please bear in mind that all these are predicated on the underling factor that we are Nigerians (if you get my point).

CASHLESS POLICY

In 2012 the Sanusi Lamido led CBN introduced cashless policy with the aim of reducing the quantum of physical cash that was being used in the system in an attempt to cut down Nigeria’s dependence on cash payments. The policy earmarked seven (7) states as pilots namely, Abia, Anambra, Abuja, Kano, Lagos, Ogun and Rivers state and then the policy was spread to the whole country. What this means is that if Nigerians had fully complied with the cashless policy in the first place, the naira redesign and shortage of cash flow would not have been felt the way it is now, because by now, we would have advanced in technology to accommodate the online banking traffic, but not my ‘Naija’ people, eleven (11) years down the road, some of my brothers and sisters don’t have a Bank account number.

THE NEW NAIRA POLICY

By virtue of Section 20(3) of the CBN Act (2007) with the permission of the President of the country, The CBN Governor is empowered to call in any of its notes based on moving the economy of the country forward. The CBN governor has informed Nigerians that of the 3.2Trillion Naira in circulation, 80% of the money is in private hands (i.e unbanked), this has led to a high rise in inflation and have also made economic policies ineffective as the unbanked monies always overwhelms these economic policies.

In order for the CBN to recover majority of its cash in circulation and achieve 100% cashless policy, the best move therefore is to redesign higher denominations (200, 500, & 1000) and give a deadline when the old notes shall cease to be a legal tender, now after January 31st 2023, 75% of the cash in circulation has now gone back to the system while the remaining unbanked old notes is what is surviving cash expenses in the country right now (just imagine how the unbanked notes affects our society).

Some Nigerians are of the opinion that the CBN should print the same amount of new notes as the old notes, forgetting that such move would defeat the purpose of the re-call in the first (less cash in circulation).

DISTRIBUTION OF THE NEW NOTE

The CBN printed 500Billion Naira new note to be circulated evenly to the society. To avoid the new notes being accessible to only the rich and connected, the CBN pegged daily cash withdrawals of N20,000 per day, and directed banks that all new notes should be distributed through Automated Teller Machines (ATM), but alas my fellow Naija people who find themselves as bank managers flouted this directive and was selling the new notes to people who were spraying it at parties, then other Nigerians started sleeping at ATM’s using friends card to withdraw large sums of money, leaving the ATM close to empty before the sun rises, this all contributed to the scarcity.

THE BANKING SECTOR

The commercial banks responsible for the smooth transmission of the financial market into cashless, have been complicit on their role which has further led to the hardship experienced by Nigerians. The network issue of non-alert, and failed online transaction during the surge was an avoidable challenge that ought to have been worked on long before the deadline, by upgrading all servers and Apps long before the deadline.

This is in addition to them flouting CBN directives on the distribution and circulation of new notes into the economy, while some were hoarding new notes in their vault.

THE POLITICIANS

It amazes me how Nigerians are falling cheaply into the propaganda of politicians seeking elective office as regards the new note, these set of people whose primary constituency is their selfish interest, and who intends to use large sums of cash to influence the outcome of voting in the forthcoming election are crying foul using the yearnings of Nigerians as an avenue to fight the naira redesign policy, and Nigerians fail to see in between the lines.

MY NAIJA PEOPLE

Lately, everywhere I sit amongst neighbors, friends, colleagues and loves one, and declare support for the naira redesign policy and its implementation, no be small attack I dey get from all angles, but when the storm subsides, I ask “what do we really need cash at hand to purchase, except for petty stuffs, and services?”, “Is it the CBN that is selling the new notes back to Nigerians with exorbitant charges, or is it we Nigerians?”

We are hit hard by the naira redesign policy, because we have a lackadaisical attitude towards approaching issues, rather than foresee a problem and begin to work on it’s solutions, we wait for the problem to reach our doorstep, before we begin to find solution.

If you ask me, we should give the new naira redesign policy a chance, if you don’t have a bank account open an online wallet that makes your phone number your account number (Opay, Palmpay, Firstmonie, Nomba, Vaulte e.t.c), where you can send and receive money, buy airtime and pay utility bills etcetera, etcetera, etcetera; If you have a bank account get your ATM card and activate all online channels of doing transaction; if you are trader (Business man) go apply for Point of sale (POS) terminal so that your customers can buy goods and services using their online channels.

SOLUTION MOVING FORWARD

After all has been said and done, my thoughts on solutions to solve the current naira scarcity are;

  1. That more of the lower denominations of N5, N10, N20, and N50 be printed and circulated to enable customers withdraw same over the banking counter.
  2. That each bank be allowed to give their POS operators a minimum of N100, 000.00 (One Hundred Thousand Naira) cash, as monies in their possession are redistributed to the masses.
  • That the old notes outside the banking sector at the moment be allowed to float until a time the CBN has enough New notes in circulation, and then any new notes that finds its way to the bank should not come back to the society.
  1. That the Banks should update their online platforms to avoid all the network issues making Nigerians to loose confidence in electronic transfer of funds.
  2. That we as a people, have to be innovative in how we spend and receive money, not all payments must be by cash. As at the time of writing this article, I had not stepped out of my office to go about my daily running because I did not have cash, so what did I do? I went to all the offices on my floor and informed them that anyone who wants to buy airtime and have cash should come to me, and that’s how I got N2000 to transport myself around town.

In sum, we the people must join hands together to make this cashless policy work, if you check am see bah, it even makes you save more because cash at hand always means more expenses.

Godspeed

For comment(s), observation(s) and recommendation(s) please send mail to danielbulusson@gmail.com

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