Centre for Social Justice (CSJ) welcomes with relief the approval by President Muhammadu Buhari, of the request by Central Bank of Nigeria (CBN), for the extension of the deadline for swapping old naira notes with the redesigned naira notes from January 31 to February 10, 2023. CSJ believes that many hardworking Nigerians, especially in the rural areas would have lost their honest income if the January 31st  deadline was not extended.

CSJ recalls that the major challenge necessitating the clamour for extension was the failure, refusal and neglect of CBN to make available the new redesigned notes in sufficient quantity to match the legal and legitimate needs and demands of Nigerians. If the CBN had made available enough new notes from the date it was launched till the end of January 2023, coupled with massive sensitization, there would have been no need for the extension. The money deposit banks were still issuing the old notes to customers as at Friday 27th January 2023 when the deadline had not been shifted from the end of the month.  

CBN’s claim that it had issued out sufficient quantity of new notes is unfounded and not supportable by empirical evidence. CBN mandated banks only to pay the new notes from ATMs and to continue to put the old notes in circulation through customers who came to withdraw money across the counter. This is a clear contradictory instruction which guaranteed that old notes continued in circulation. There are no reports that cash limits for individuals and corporate organizations were breached. Moreover, at the public hearing organized by the House of Representatives on this matter, senior bank officials averred that banks got only ten percent of the value of old notes deposited with the CBN. So, how can this percentage be sufficient?

If by any empirical calculation, the percentage stated to have been received by the banks is the usual ratio between deposits and cash releases by CBN to the money deposit banks, then the CBN will be guilty of the failure of supervision and effective regulation. The CBN has wide powers to supervise and sanction errant banks if for any reason their officials were diverting the new notes.

CSJ therefore calls on the CBN to release sufficient quantum of the new notes to meet the demand of Nigerians, to the extent that such demands are in compliance and not above the cash withdrawal limit. But if the CBN continues in its business-as-usual approach, which it manifestly deployed in the last three months, there would be another clamour for extension of the deadline.  Finally, the CBN should ensure that every old note that gets into the banking system is automatically withdrawn and not paid back to customers whether from automated teller machines or across the counter.