Fides Media Living the Faith
By Ikeugonna Eleke
On the very last day of this month, January 31, 2023, old Naira notes of N200, N500 and N1, 000 will cease to be legal tenders in Nigeria, with the Central Bank of Nigeria (CBN), warning there will be no extension of the deadline for the use of the old notes.
Following up on this, the CBN had commenced an aggressive sensitization nationwide to update the people on the need to pay in all old notes into their bank accounts to help them beat the deadline.
The CBN said that old notes which were not paid into the banks before January 31, 2023 would become invalid, even as it disclosed that the bank had taken steps to ensure that everyone was able to meet the deadline by ensuring that firstly, no charges were imposed on customers who wanted to pay any amount of money into the bank, and that banks would open even on Saturdays to ensure that no one missed the opportunity of paying their old notes into the bank.
On January 19 and 20, officials of the CBN took time to move round some markets in Anambra State to sensitize the people on the deadline, the security features of the notes, the quality and the dangers of not accepting the notes as legal tenders.
Early in January, there had been incidences of people rejecting the notes, probably out of ignorance about the changes. Some said the rejection was about the inferior nature of the notes, which, they said, was susceptible to being counterfeited.
Some traders who had spoken to Fides during an independent interview, including an Awka based commercial driver, Mr Edward Ezediuno, said, ‘All the new notes look fake already, so we are afraid that if they give us the fake ones, we will not be able to differentiate it from the authentic one.’
There were also incidences of many consumers having problems with sellers as a result of this, but the recent sensitization tour of markets in Anambra, and the complaints received, showed that the issue is no longer about the authenticity of the notes, but the availability. This may be because the CBN had insisted that there would be no grace period after January 31, and that Nigerians had no option other than accepting the new notes.
During the CBN sensitization exercise which happened in major markets in Awka, Nnewi and Onitsha, Fides monitored the reactions of traders who were being sensitized about the new notes. Though a few traders still complained about the inferiority of notes, the major complaints were about the non-availability and the high cost of getting the notes from black market retailers.
During a visit to Onitsha Main Market, which is reputed to be the largest market in the entire West Africa, many traders complained about the non-availability and quality of the notes. Mr Igwemba Uzor, a trader in the market, removed a white handkerchief from his pocket to show the stains made on it by the N1, 000 note.
‘This white handkerchief was stained by the new Naira notes. See the ink. One of my friends just asked that we try it, and this is the result. From what this note did to this handkerchief, I am sensing that if you wear a white dress and you have the money on you, if rain beats you, or you sweat very well, the money can stain your cloth,’ he said.
At Nkwo Nnewi Spare Parts Market, traders sang a different tune. They welcomed the money but protested that the notes were virtually unavailable in banks and that they had made efforts to take their old notes to the bank, hoping that when they withdrew, they would get the new notes. They however said that had not always been the case.
A trader at the market, Pastor Frank Ejimbe, accused CBN officials of playing politics with the new notes. He said, ‘You people are doing business with the new Naira notes. How can black market people have the new notes to the point that any amount you want, they can sell to you, but banks don’t have it? Does that make sense?’
Two traders, Mr. Nwabueze Igwe and Mr. Sylvester Ekweonu, at the same market, expressed worry that commercial banks and Point of Sale (POS) operators were still issuing the old Naira notes to customers. Nwabueze said, ‘We want the CBN to be sincere about the introduction of the new notes. We need to know why each time we take old notes to the banks, it is usually the old notes that they use to pay us when we come to withdraw.’
For two other traders, Mrs. Nkechi Ogbu and Mr. Solomon Ejike, the deadline was too short to mop up all the old notes in circulation across the country; even as they appealed for the extension of the period.
‘When we were young, the usual practice was that when there was a new currency, all the banks did was that once they got your old currency, you would never be able to get it again because they paid the new currency. But today, banks receive the old currency as deposit and also pay out the old ones. How will they now be able to mop up the old currency?’ Mrs Ogbu queried.
Meanwhile, officials of the bank, including the Branch Controller, CBN, in Awka; CBN’s Director, Other Financial Institutions Department, Mrs Nkiru Asiegbu, and many others who spoke to the traders during the sensitization exercise, carried out various announcements, including the deadline of the use of the old currencies.
The officials visited several markets in the state, including: Agbo-Edo Market at Nnewi; Main Market; Onitsha, Tools and Allied Materials Market; Bridge Head, Onitsha; Odera Market in Awka and Building Materials Market in Nkpor.
Speaking at the Tools and Allied Material Market, Bridge head Onitsha, Mrs Asiegbu said, ‘You must also strive to deposit all old notes of the N200, N500, N1, 000 (denominations) before the last day of this month. We have met with heads of all commercial banks and directed that they begin the distribution of the new Naira notes without further delay.’
As at the time of filing this report, the traders expressed skepticism about meeting the deadline of the bank in depositing their old notes, noting that they also drew old notes each time they made deposits.
Mr Tony Eze, a trader at Odera Market said, ‘This bank people think everyone is as rich as themselves; they don’t know that many people survive through their daily hustle. They want us to pay our money into banks and wait for when new notes will be dispensed, not knowing that many people survive by making sales, and taking the money to the market to purchase more goods. How can they now pay into the banks and leave their money there, waiting for when new notes will be available?’
To this, the bank officials also explained that soon, banks who failed to pay customers with the new Naira notes would be sanctioned, adding that there had been strict monitoring to ensure that banks dispensed the new notes through their Automated Teller Machines.
It was however gathered that the shortage of the new notes could have been deliberate and meant as a policy that would curb the rising inflation in Nigeria as the mopped up funds will never be released to the public again, while the new notes will also be scarce. It is believed that this will give the Naira some prestige.
‘If the Naira becomes scarce, what it means is that less money will be chasing many goods, as against now that too much money is chasing less goods because of the high level of money in people’s hands,’ a source told Fides.
Fides checks last Monday at some banks revealed that they were paying the new notes through their ATMs. At one of the banks, the First City Monument Bank (FCMB) along the Awka-Enugu Expressway, people were seen at the bank’s ATM facilities withdrawing new notes. But in the late evening of same day, it was a different story. Checks at FCMB, Access and United Bank for Africa (UBA) showed that none of the banks’ ATMs was functioning, leading those who came to withdraw money to fume and suspect that it was a deliberate action by the banks. This was contrary to the assurances of the CBN that new notes would be seamlessly issued from that day.
It was particularly frustrating for those who had finished their old notes and who resorted to doing electronic transactions which can be truncated by poor network, thus further frustrating them.
With the long weekend and the next Monday being usually observed by many as a sit-at-home day during which none of the banks operate, the last day of the month, being Tuesday is expected to experience a massive rush by customers at the banks to get new notes.
It is hoped that the banks will handle the last day of the use of the old notes by loading the new ones in their ATMs over the weekend.
Additional report from Jude Atupulazi.