Twenty-three working days to the deadline for Nigerians to return old N200, N500 and N1,000 notes to the banks for new ones, there are indications that top executives of banks are frustrating the distribution.
Investigation by Daily Independent revealed that instead of giving their customers the new banknotes, the new notes are only seen in parties and in the hands of politicians.
As a result of this, Nigerians have cried out that the banks are not releasing the new notes to them as they asked the Central Bank of Nigeria (CBN) to curb this ugly development.
The CBN governor, Godwin Emefiele, said on December 8, 2022, when he visited President Muhammadu Buhari in Daura, Katsina State, that banks in the country have taken delivery of the redesigned new notes for onward distribution to Nigerians.
Remarking that the CBN was prepared for the transition from the old notes to the new notes within the stipulated period, Emefiele said, “I said December 15 when we announced it. We said that will be when we issue the cash but we have to move it forward as the president unveiled it on November 26 and yesterday (December 7, 2022) the banks have received the new cash and will start dispensing them.
“I can assure everyone that it will go round but let us be calm and be patient. Luckily, the old currency continues to be legal tender until January 31 2023. Both the “painted and unpainted” will be legal tender and by January 31, unpainted ones will not be useful to you.”
The new twist is that the banks are not ready to give it out to Nigerians but to their friends and cronies, especially politicians.
It was gathered that some bank MDs are using their influence to help politicians who hitherto stashed huge sums of money at home for a huge cost.
A concerned Nigerian, Mrs. Idayat Omowale, said her husband who works with at politician in Lagos came home last week with new notes and told her that “a top banker” brought it to his boss.
Stakeholders, who spoke to Daily Independent, said the CBN needed to monitor the banks to ascertain the level of the distribution.
“I think the CBN should not allow the banks through their MDs and executives take advantage of the new notes distribution. They should take action to be able to achieve the desired goal of ensuring that currency in circulation are returned to the banks,” said Dr. Joseph Aniagolu, a retired university lecturer.
To Comrade Moses Omiyale, a human rights activist, “The new notes are also being hoarded by politicians with the connivance of top bankers.”
Currency in circulation seems not to have reduced significantly after almost two weeks of the commencement of the distribution.
Aisha Ahmad, Deputy Governor, Financial System Stability of the CBN, while briefing the House of Representatives recently said the bank is doing all in its capacity to ensure that the goal of the redesigned new notes is not defeated.
In her presentation, she said currency management was a key function of the apex bank as enshrined in section 2(b) of the CBN Act, 2007, noting that the integrity of the currency and efficient supply of banknotes were indicators of a performing central bank, especially in predominantly cash-based economies such as Nigeria.
Highlighting the various challenges facing currency management, which had affected the ability of the CBN to efficiently carry out its mandate of issuing legal tenders, Ahmad said the challenges have continued to grow in scale, with the attendant consequences on the bank’s policy effectiveness, if left unaddressed.
According to her, these challenges include wholesale hoarding of naira banknotes by members of the public.
“An observation supported by statistics shows that cash outside banks consists of over 80 percent of the currency in circulation, worsening shortage of fit banknotes in circulation. This portends negative public perception of the bank and increasing threat to financial system stability.
“High and increasing cost borne by the bank: A review of the cost of currency management from 2017 to 2021 indicated an average increase of over N10 billion per annum and over 90 percent of currency management costs are attributed to banknote production.
“This affects the CBN and other participants in Nigeria’s currency management sector (banknote production, storage processing, distribution activities and banknote destruction),” she said.
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