Last Sunday, news filtered in about the decision of the nation’s apex bank, the Central Bank of Nigeria, CBN, to extend the deadline given for the use of certain categories of old Naira denominations. The denominations include the N200, N500, and N1000 Naira notes. Prior to the extension, many Nigerians had groaned and complained about the difficulties in getting the new notes and called for an extension of the deadline. Their wish was granted last Sunday by the CBN.
However, the announcement of the extension of the deadline has left some people unsure whether to celebrate or not. Before the extension, even though it was difficult to get the new notes from banks and POS operators, things had eventually started to slowly take shape and it was obvious that by the first day of this month everything would have stabilized.
But with the extension, though with the best of intentions, we may have a situation where all the gains made may be lost. This is because of the banks’ seeming reluctance to do the bidding of the CBN by dispensing new bank notes.
While this went on, people were selling the new notes in markets and charging anyone who wanted to have the new notes. POS operators were not left out as they added more money to their charges. As at Monday, many of them were charging one thousand Naira from anyone who wanted to withdraw ten thousand Naira.
But many believe that if the extension had not come, by now things would have normalized. But because it has been extended, the same problems witnessed may still continue.
Truth is that the CBN failed to handle the entire matter well as it seemed they were not in control of banks. Last week many banks’ Automatic Teller Machines, ATMs, did not issue new notes. Those that did, ended after a little time, such that in the evenings one could not withdraw money from many of such facilities.
It was as if the banks were reaping from the chaotic situation and giving the new denominations to friends, cronies and those able to pay. Because of this, they were reluctant to deal with ordinary folk whose businesses were affected.
POS operators also had a hard time of it getting money from banks and some who went in the morning stayed up till 2 O’clock. They would come back to take their pound of flesh from their customers.
We are of the view that if the apex bank fails to control the other banks and compel them to release the new notes, extending the deadline will not address the problem and the extension will therefore only reopen old wounds.
Thus, unless the CBN has decided to handle this matter much better, we think it would have been better not to have extended the deadline as things would have normalized by now.