New naira: Confusion deepens as CBN deadline ends today

Nigerians, particularly bank customers, were baffled and uncertain as to whether the Central Bank of Nigeria’s deadline of today for the phase-out of the old naira notes was still in effect or had been suspended as a result of the Supreme Court injunction obtained by some northern governors.

The Supreme Court had ruled on Wednesday that the deadline should be postponed while the Kaduna, Kogi, and Zamfara State governors’ appeal of their case was being heard.

The case will be heard on February 15 by the court. Abubakar Malami, SAN, the Attorney-General of the Federation and Minister of Justice, claimed, among other things, that the Supreme Court lacked jurisdiction over the case in his response to the lawsuit later on Wednesday.

However, on Thursday, a day before the deadline, commercial banks in the nation and bank customers were in the dark as to whether the old N1000, N500, and N200 would cease to be legal tender by Friday (today), or if they would continue to be so until the Supreme Court has had a chance to review the governors’ lawsuit.
The Friday deadline is uncertain, according to a number of senior bank executives who spoke on the record because they were not authorized to discuss the situation.

They based their defense on the fact that banks still hadn’t received instructions from the CBN, the body that regulates the banking industry.

The governors, they added, did not join the banks in their lawsuit.
Upon being contacted, a senior Access Bank executive who did not wish to be named said, “I cannot say yes or no. You are aware that a court decision has been made; as of right now, it is a Supreme Court decision, and the CBN has not updated us on it.

In response to questions, a top source for Ecobank stated, “We don’t yet know what will happen. You are aware that today is the deadline, so we will continue to collect old naira notes on Friday. However, after that, we are unsure of what will happen.

Further, a senior management representative of Zenith Bank said, speaking on the condition of anonymity, “Friday is the deadline as it stands, but there is a Supreme Court ruling so we are unsure of what will happen. As of right now, the CBN has not issued a new circular announcing an extension.

Additionally, a Polaris Bank executive stated that the lender was awaiting word from the CBN regarding the situation.

As of right now, the official said, “We’re not sure if Friday is the cutoff date for the phase-out of old notes or if we need to wait until next week when the Supreme Court will hear the case.

A top executive of a tier-2 bank also commented on the situation, stating that the CBN had not given any instructions regarding whether or not to adhere to the February 10th deadline. As things stand, new notes should be arriving from the CBN, but they aren’t.

“The banks can’t even pay out any of the few old notes they have in their vaults. Unfortunately, instead of loading their ATMs three to four times per day due to the lack of new notes, some banks only do so once.
Cash-strapped POS operators
The development happened on Thursday, when many banks were closed and cash-strapped Point of Sale operators closed their shops.

As the situation deteriorated, officials warned that Nigerians might experience hardship due to a cash shortage in the days ahead.

The CBN allegedly restricted the amount of cash distributed to banks, according to some bankers.

The bankers revealed, under the condition of anonymity, that the CBN could do more to ease the cash shortage that Nigerians are experiencing.

The CBN is hoarding supply for branches, according to a banker who spoke with our correspondent. The new naira notes were not released by them. They are currently providing banks with older, lower denominations, but in limited quantities.

Cash is scarce, a different banker said. Although we are aware that the goal is financial inclusion, there will be problems if users are unable to use their accounts for the intended purpose and demand that we adopt a technological approach. The CBN can do more in terms of the cash supply.

A banker rejected the idea that there was any sort of pressure, saying, “People are not moved by the CBN’s deadline. In contrast to the previous one, when people believed that if they deposited old notes, they would be able to exchange them for new ones or deposit N500 million and receive the same amount in new notes. No one is stirred. Nothing I’ve seen indicates that people will comply, but we’ll see how tomorrow goes.

One of the bankers responded, “No, customers are not bringing in their old naira notes before the deadline. In fact, banks are pleading with clients to bring cash so they can fund cash-related activities.

The responses have been varied, according to another banker who went by the name Emese. Consider the decision made by the Supreme Court in this case.

“Cash is being brought in by customers. There are a few people there, but only between 2 and 3 p.m. People began entering the bank to deposit their cash today (Thursday).

One of the top banks’ banker continued, “It is not what we anticipate, but it is in keeping with the CBN cashless policy. One trillion dollars won’t simply be taken out of circulation and put back in.

On Friday of last week, President Major-General Muhammadu Buhari (ret.) pleaded with Nigerians to give him seven days to end the naira crisis.

But as the crisis persisted, Thursday was a difficult day for Nigerians. Even after the country’s recent naira shortage subsides, traders and business owners have stated that they would think about keeping their money at home rather than using the banks.

Nigerians have been waiting in line for empty automated teller machines and crammed into banking areas where they can hardly get the cash they require for weeks.
Some Lagos State traders who spoke with our correspondent on Thursday expressed skepticism toward the banking system, while others claimed they had no choice but to keep using the banks.

Because things have to get back to normal before Mrs. Fatima Oyebisi, who sells building supplies at the Maza-Maza plank market, can bank her money.

Even when everything returns to normal, she declared, “I’m not keeping money in the bank again. I’ll keep an eye on things.

At the Trade Fair Market near the Lagos-Badagry Expressway, a shoe vendor named Mr. Emmanuel Osita bemoaned the negative effects of the new naira policy on him. He declared he would keep his cash at home.

We are already dejected, Osita said. Yesterday (Wednesday), my sister spent the entire morning at the bank but left empty-handed. People won’t be able to carry large amounts of cash, like N300,000 or N500,000, to the bank. I’ll store it at home.

Other traders, on the other hand, were concerned about the risk associated with keeping money at home.

traders bemoan
Adaku Nkwor, who sells cosmetics at the Trade Fair market, asserted that she would never carry cash with her.
Wosilat Taiwo, who sells perishable foods at the market in Ketu, has no intention of going to the bank once more.

She asserted that she wouldn’t be going to the bank anyhow because she didn’t have much money.

In the meantime, the World Bank stated in a report published in 2022 that the percentage of unbanked Nigerians had increased to 45% in 2021.

About 64 million of Nigeria’s nearly 200 million people still do not have an account with a financial institution or mobile money platform, according to the report titled “The Global Findex Database 2021: Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19.”

Nigeria was listed as one of the seven nations with the highest percentage of unbanked citizens in the report. Bangladesh, China, India, Indonesia, Mexico, and Pakistan are the additional nations.

David Owumi, an inclusion consultant with the Salt House—Institute for Inclusive Governance and Sustainable Development, expressed concern about the impact of the naira shortage on the Central Bank of Nigeria’s efforts to promote financial inclusion in a conversation with our correspondent.

“The lack of money has a significant impact on people and businesses,” he said. Our understanding of economics and how financial institutions operate will change as a result of these experiences. Nigerians will look for more effective methods and tools to maximize control over their money.
Our correspondent noted that major banks in the area of Redemption Camp did not open for business as the CBN policy deadline went into effect today.

Frank Boku, a GTbank client, claimed that the residents were unconcerned about the deadline.

Bolanle Lukman, another Access Bank client, added, “I am managing the cash I have at the moment; I don’t care any more. I’m so grateful I was able to get the new notes. The deadline will still be extended, I am aware of that.

Fatima Jaiye, a UBA client, expressed her dissatisfaction with the system.

Our source reported that the Fidelity Bank in Lagos State’s Palm Grove neighborhood closed at 2:00 pm on Thursday. Several ATMs were also not working.

According to an accountant named Nike Olusanya, the GTB and Wema Bank in Ogun State’s Ago-Iwoye axis had to close due to the influx of people out of concern for rioting.

An employee of a point of sale who asked that her name not be published said she was gradually going out of business because she lacked the operating capital.
Nigerians in fear stormed the banks in the Federal Capital Territory on Thursday to deposit their old notes, taking no chances.

At Guaranty Trust Bank in the Central Business Area, First Bank in the Jabi area, and United Bank of Africa at the NICON Luxury Hotel, our correspondents observed an increase in the number of people depositing old naira notes.

Several banks in Garki, Area 3, including Access Bank, Keystone Bank, and Eco Bank, were experiencing the same issue.

However, some banks appeared to be out of the new money as cashiers were seen dispensing N50 bills.

Due to the lack of the customary heavy foot traffic, many ATMs in the city center were inoperative.

However, at the First Bank ATM, people could be seen waiting in vain for the bank to reload the machines with cash.

The Association of Mobile Money and Bank Agents in Nigeria had declared it would not shut down in the midst of the naira shortage crisis.

grocery stores and gas stations
“The issue is not peculiar to point of sale agents alone,” Osaro Ekhator, Chairman of the Association of Mobile Money and Bank Agents in Nigeria, said in an interview. “However, some of the agents are able to source funds from unconventional sources like going to the filling station, and supermarkets, among others.”

The apex bank acknowledged on Thursday that the ongoing shortage caused by the redesign of the naira and the cash withdrawal policy was not anticipated, especially given the ongoing uncertainty surrounding the CBN policy.

The admission was made at the 22nd fellowship conferment lecture and ceremony, which was held in Abuja and was organized by the Nigerian Society of Engineers. It was made by Folashodun Shonubi, the bank’s deputy governor in charge of operations.

The complexity of the naira redesign and its advantages for Nigerians was the subject of the lecture.

Contrary to popular belief, he clarified, the redesign plan, which had been in the works for two years, was not intended to punish anyone but rather to boost the economy.

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The deputy governor revealed that many advantages have been realized, including the return of N2 trillion to the banking system, despite claiming that difficulties were brought on by a new industry started by native Nigerians.

“As you know, Nigerians are very intelligent,” he said. And we developed a completely new sector of the economy for people that we had never imagined. Queuing is a part of that, where you exchange your place in the line for cash. Night crawling is a practice in which you wait until it is dark, gather numerous cards from friends and family, go to an ATM, empty the cards using various cards, and then take the money to sell.

To be honest, it has been a little stressful because we did not expect this kind of behavior.

Shonubi further pleaded for the apex to allow it to do everything in its power to salvage the current situation, adding that the required challenges would soon be a thing of the past.

Osita Nwanisobi, the CBN’s Director of Corporate Communications, was sent WhatsApp messages on Thursday, but he never replied, making it impossible to get a response from him.

A top CBN official, who spoke on the record under the condition of anonymity because he was not authorized to speak on the subject, claimed that as of Friday, the central bank had not yet informed commercial banks of the situation.

In due course, he promised, the CBN’s position would be made clear. “At this time, the CBN has no position on it,” the official declared. We haven’t also issued any instructions to the banks in this regard. In due course, the bank will state its position on the issue.

Inquiries regarding the deadline received no response from Shehu Garba, the presidential spokesperson.
FG to conform
However, the AGF declared on Thursday that the Federal Government would abide by the Supreme Court’s decision.

He stated on Thursday night’s episode of Arise TV that “there is no doubt that the Supreme Court’s decision, regardless of the current situation, is binding, and that you can equally take steps that are available to you within the context of the spirit and circumstances of the rule of law”

He claimed that because the government was dissatisfied with the order, it was being challenged.

It is all about the rule of law, he continued. According to the rule of law, the Supreme Court’s rulings and orders must be obeyed. We’ll behave submissively. In accordance with the rights and privileges granted to us as a government, we are equally considering it from the perspectives of challenging the order and seeking for it to be set aside. The rule of law provides that when you are not happy with a ruling, you can now file an application, among others, for setting aside.

“So, it all comes down to the rule of law, both in terms of obedience and compliance and in terms of filing an application to have a judgment or order set aside. The rule of law governs how we conduct our business.

Despite the AGF’s assurance that the Federal Government would follow the Supreme Court’s decision, banks claimed on Thursday that they had not yet received any instructions from the CBN.

In a related development, the Edo State Government has distanced itself from the remarks and actions made against the currency swap policy by Mallam Nasir El-Rufai, the governor of Kaduna State, and some other governors.
The state government said the governor of Kaduna State does not speak for Edo State and urged “guided utterances and inferences in such critical matters, especially in the heat of the political season” in a statement by Crusoe Osagie, Special Adviser to the Edo State Governor on Media Projects.

However, the governor of Zamfara State, Bello Mattawalle, referred to the negative remarks that followed the Supreme Court’s ruling as merely political retaliation.

Speaking through his Special Adviser on Media, Zailani Bappa, Matawalle declared that he was absolutely certain that anyone who opposed their action and subsequent victory at the Supreme Court was either misinformed or oblivious to political chauvinism.

According to Matawalle, “I and my counterparts from the states of Kaduna and Kogi found it necessary to approach the Supreme Court in order to prevent the economy of Nigeria from degenerating further into crisis.”

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As a result of the shortage of both the old and new naira notes, “our action will also ease the agonizing pain the average Nigerian is feeling.”

Malam Salihu Lukman, national vice chairman of the All Progressives Congress (North-West), has expressed concerns about the naira swap policy, pointing out that over 300 of the 774 local governments, particularly those in the North, lack banks.