Expectedly, the Supreme Court on Friday last week ruled that the old Naira notes still remain legal tender till December 31, 2023. Despite the judgement, The Central Bank of Nigeria (CBN) has yet to release the notes to the public thus forcing the citizens to fear to accept them even when available; BENJAMIN UMUTEME writes.
When the Central Bank of Nigeria (CBN) announced that it was re-designing the N500, N200, and N1, 000, many Nigerians were elated saying it would address some of the challenges associated with the nation’s currency.
Briefing newsmen in Abuja, the CBN governor, Godwin Emefiele, said re-designing the Naira would help tame inflation, curb kidnapping for ransom and curb vote- buying among others.
“The Management of the CBN sought and obtained the approval of President Muhammadu Buhari to re-design, produce, and circulate new series of banknotes at ₦100, ₦200, ₦500, and ₦1000 levels,” he had said.
The purpose of this exercise, according to the CBN helmsman, was to reduce the inordinate amount of cash outside the control of banks and currency counterfeiting.
“Recent development in photographic technology and advancements in printing devices have made counterfeiting relatively easier. In recent years, the CBN has recorded significantly higher rates of counterfeiting, especially at the higher denominations of ₦500 and ₦1, 000 banknotes.”
“Although global best practice is for central banks to redesign, produce and circulate new local legal tender every 5–8 years, the Naira has not been redesigned in the last 20 years.”
Since the notes were unveiled, Nigerians from different parts of the country have been struggling to access them from banks and ATM cash points.
Many have had to sleep at ATM points to get cash while others have had to forfeit as much as 30 per cent to PoS operators to get a certain amount of cash. And then enter the Supreme Court ruling which directed that the old N1, 000, and N500 notes should be legal tender until December 31, 2023.
The apex court faulted the government’s decision to go ahead with the re-design of the bank notes without consulting the federating units – that is the 36 states of the federation.
Nigerians have been struggling with a shortage in cash since the CBN began to swap old bills of the local Naira for new, re-designed ones, leading to a shortfall in banknotes. This has triggered violent protests in major cities as angry and frustrated bank customers attacked and vandalised banks and blocked roads.
CBN’s defiance
Despite the apex court ruling, the CBN has yet to release the old and new notes to the public to further cause more hardships on the citizens. However, since the start of this week, some banks have paid the old N1, 000 and N500, but conditions, while some have refused to dispense the old notes telling their customers that they were waiting for a directive from the CBN.
The hapless citizens are now stuck with the old N500 and N1, 000 notes as motorists, fuel stations, retailers, traders, and other categories of bank customers are not willing to collect them.
For most traders in Abuja, the story is the same; waiting for President Buhari to speak on the matter.
For Mercy George, she refused to collect the old notes (500, 1000). According to her, “I personally refused to collect the money because if I return it to the bank, they will not take it from me.”
“I just entered their trap as I joined the queue to collect the old notes from access bank, only for me to discovered that no one want to take it back from me not even the same bank that issue it to me, I advice everyone not collect that old notes from bank until the federal government or CBN issue out a public statement as regards to it, We have so many thieves as leaders in this country now, may God help us Amen,” Chinedu Nwachukwu said.
Mrs. Hannah Dare, a trader at Karu market, a suburb in the federal capital territory, said she would not collect the old notes despite the Supreme Court ruling. According to her, she would only start collecting the old notes when she hears from either the president or the CBN.
She said, “Ever since this Naira thing started, it is what CBN says that people have listened to, and now the CBN has not said the old notes should be accepted. If I collect old notes now, I can’t give it as change because other people will reject it.”
Mama Eloho, a resident of Jikwoyi said, she would rather collect bank transfers than to collect the old N1, 000 or N500 notes, as according to her, she would be left with the money if her customer fails to sell goods to her due to the old notes.
“God saved me. I collected an old N1, 000 note from one of my customers, and after going to several places and being rejected I was fortunate to see a woman who collected it from me. So, for now, until President Buhari directs the CBN to allow Nigerians to use the old notes, I will not collect it,” she said.
President’s silence
More than a week after the Supreme Court’s judgement, the Presidency has yet to come out with a statement.
Cash squeeze has nearly crippled the economy with banks unable to dispense the new bank notes, and the old N200 notes that Buhari earlier approved should only be in circulation until April end. Even the N200 is being rationed by banks, which dole out between N2, 000 and N10, 000 maximum to their customers with the CBN looking the other way.
Many business owners are anxious to hear from President Buhari over the validity of the old notes, noting that it was risky to accept the notes until there is a directive from either the Presidency or CBN. They said their decision was borne out of the controversy that followed a similar Supreme Court pronouncement that was not adhered to.
Speaking with this reporter, an economist, Friday Efih, said it would be difficult for the CBN to make any pronouncement since the approval for the policy was gotten from the President.
While he understood the frustration of Nigeria at the CBN, Efih noted that the final decision whether to use or not to use rests with the president.
“Severally, the CBN governor, Godwin Emefiele, has said that he got approval from the president on the policy; so, it would be very difficult if not impossible for the Apex Bank to act or make any pronouncement without getting approval from the President. I think that is where the dilemma of the Central Bank lies,” he said.
