The Central Bank of Nigeria (CBN) has said that its January 31, 2023 deadline for the validity of the old N200, N500 and N1,000 notes remains.
The CBN Governor, Godwin Emefiele, announced this after the apex bank’s Monetary Policy Committee (MPC) meeting in Abuja, yesterday.
The CBN also raised the Monetary Policy Rate (MPR), which measures interest rate, to 17.5percent.
According to him, kidnapping and ransom-taking have reduced since the three banknotes were redesigned.
He also said the time given for the swap of the old naira notes with new ones were enough for Nigerians to go to commercial banks and get new notes.
The CBN on October 26, 2022 had announced its plan to redesign the three banknotes. President Muhammadu Buhari subsequently unveiled the redesigned N200, N500 and N1,000 notes on November 23, 2022, while the apex bank fixed January 31 deadline for the validity of the old notes.
There have been concerns from many Nigerians over the slow spread of the three new naira notes as the January 31, 2023 deadline approaches but the apex bank has insisted that the date stands.
The CBN also recently directed commercial banks to halt over-the-counter payment of the new notes and load their Automated Teller Machines (ATMs) with the redesigned naira notes to boost circulation.
The apex bank also launched a cash swap programme nationwide to enable those in the unbanked areas to exchange their old notes for new notes before the deadline.
On the wide clamour for the extension of the deadline for old currency usage, the CBN Governor said: “Unfortunately, I don’t have good news for them. My apologies. We can’t shift the deadline. Just like Mr President has said on some occasions, 90 days is enough for people to get their money into the bank. We ensured the banks extended banking hours and opened on Saturdays to accept the old notes. But they did not see the rush. Only the same normal deposits. So, no need for a shift”.
On the scarcity of the new naira, Emefiele said the CBN holds three meetings with the banks every week to address the challenge.
“We saw that the banks were paying the new notes to their close customers and we stopped it and said, feed it to the ATMs. It has worked. In the initial stages, they were seeing old notes and after a week, we said that only needed notes should be in ATMs and we increased the volume of new notes.
“We told the banks that we want to have zero old notes in your vaults by the 1st of February. There are adequate new notes available. Our mint is producing and we are supplying.
“I held a meeting with state governors and some said no banks in riverine areas and upland areas. But we have 1.4million super agents for cash exchanges.
“We’ve put this in place. A week ago, we told our directors and deputies to go around the country for mass sensitisation in markets, churches and mosques for weeks running. We remain focused on the weak and vulnerable even after the 31, we shall ensure new naira permeates every nook and cranny of Nigeria.
“In 2015, there was N1.42trillion currency in circulation and $3.2trillion in 2022. More than double! N2.7trillion of that is outside the banks. People are keeping vaults in their homes. They can’t be banks in their homes. We can’t allow that. They should release it back to the CBN. Ransom and kidnapping are reducing. I could be wrong.
“We have N1.5trillion back in banks and perhaps this week, we hope to get N2trillion in.
“Just bring it, no one will harass you. We’ve begged EFCC and ICPC to let us do our job. And nothing will happen to you. I promise you that on my honour,” he stated.
On the MPC decisions, Emefiele said the committee agreed to raise the interest rate from 16.5percent to 17.5percent, in a move towards taming the raging inflation in Nigeria, currently pegged at 21percent.
The MPC kept the asymmetric corridor at +100/-700 basis points around the MPR.
It also retained the Cash Reserve Ratio (CRR) by 32.5percent while the liquidity ratio was kept at 30percent.
“Tightening was the way to go. Our inflation target is 7-10percent and so we can’t rejoice at 21percent.
“We can hold or loosen when the inflation rate goes down. But right now, we remain aggressive on rates”, Emefiele explained.
However, the House of Representatives, the Senate and the Nigeria Governors’ Forum have asked the CBN to extend the date to enable more Nigerians get the new notes.
The Senate, yesterday, urged the Central Bank of Nigeria, to extend the mop-up of old Naira notes to July 31, 2023.
The upper legislative chamber, through an adopted resolution, arrived at the new deadline after a thorough debate.
This was against the backdrop of the earlier resolution in December, 2022, which the lawmakers said, was jettisoned by the apex bank.
The denominations of N200, N500 and N1000 notes have been redesigned and are already in circulation.
The redesign has been trailed by heavy criticisms, citing the timing as insensitive as a result of the general election coming up next month.
Meanwhile, the call for fresh extension was fallout of a motion sponsored by Senator Sadiq Suleiman Umar representing Kwara North Senatorial District, in which he said: “the new notes were not enough in circulation”, warning that if the deadline was not extended, there would be chaos in many parts of the country.
The House of Representatives hasalso asked the Central Bank of Nigeria to extend the deadline for acceptance of the old naira notes by six months.
The House also resolved to invite some managing directors of some banks and the CBN to brief the leadership of the House on the availability of the notes.
The decision was sequel to a motion of urgent public importance moved by Sada Soli, a lawmaker from Katsina State.
He stated that the January 31 deadline set by the CBN was not feasible as traders have started rejecting the old notes in his constituency.
He stated that banks and other financial institutions do not have the capacity to deal with the rush.
Speaking in support of the motion, Ahmed Jaha from Borno State informed the House that CBN officials were in his constituency to help, however, the measure was not enough.
“The CBN are in my constituency helping people to swap the old notes. The amount taken to my constituency, the amount is not enough. For 10 years, my constituents have not had access to banks.
“We have a lot to lose if the deadline is allowed to stand,” Jaha said.
The Speaker of the House, Hon Femi Gbajabiamila, in his reaction to the motion, said there was a need for an investigation into what was stalling the disbursement of the new notes.
“CBN is making spirited efforts. They were at the central mosques in Lagos. I am not sure if it is enough. As they say, the road to hell is paved with good intentions. The timing is what we have problems with.
“There is a need to review the policy. I think there is a need to add another prayer. The bank is saying they don’t have the money but the CBN is saying they have the money. We should invite the bank MDs to brief either the leadership or a small committee,” he said.
The House consequently resolved that an ad-hoc committee headed by the Majority Leader, Hassan Doguwa, should meet with the invited MDs.