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As Buhari unveils new naira notes; N165bn mopped up

The Central Bank of Nigeria (CBN) says it has received a total of N165 billion so far out of a total of N2.7 trillion currently…

The Central Bank of Nigeria (CBN) says it has received a total of N165 billion so far out of a total of N2.7 trillion currently outside the banking system, since it announced plans to introduce new naira notes and asked Nigerians to deposit all their old notes. 

This was made known by the CBN’s director of currency, Rasheed Adams, at a post-press briefing of the Monetary Policy Committee (MPC) meeting on Wednesday in Abuja. 

The revelation came as President Muhammadu Buhari unveiled new naira notes ahead of yesterday’s Federal Executive Council meeting in Abuja.

He expressed concern that, in spite of some waivers by the CBN on deposits, only a few Nigerians have come forward; stressing that there will be no extension on the January 23, 2023 deadline. 

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Recall on October 26, the CBN governor, Godwin Emefiele, while announcing the planned redesign of the high denomination naira notes by December 15, 2022, said the initiative will aid security agencies in tackling illicit financial flow, among others. 

Emefiele said there was significant hoarding of naira notes by members of the public, with statistics showing that over 80% of the currency in circulation was outside the vaults of the commercial banks. 

Speaking at the post MPC briefing, Adams said, “As at Friday last week, 18th of November, we have a total deposit that we have received from the banks in the sum of N165bn, which is still small.

“We are not seeing the rush. In fact, some of the banks have not even made any deposits within the period and some of these banks have a large customer base.

“So, it is a problem for us and we are hoping that it will not result in a stampede when we are getting close to the deadline.”

He explained that the apex bank has made a lot of concessions to the commercial banks by extending its opening periods to Saturdays, and has waived charges on those deposits and removed all limits in terms of KYC.

“We are still far from where we want to be. We have three scenarios; we have the optimistic scenario where we are hoping that 80 per cent of the N2.7 trillion will come back. We have the pessimistic scenario, where we are looking at 40 per cent. But in the realistic scenario, we feel we will have 60 per cent,” he added.

Adams further hinted that, as of October 26, there was a baseline report prepared on all the account balances in the system. “So if you have a balance of say 10 million on October 26th and now you have a billion, then you may have to explain to some people why or what you do to have that volume.

“So, there is no cause for alarm. If it is your money, bring it.

Exercise not an exchange programme

Adams said: “This exercise is not an exchange programme. It is not like you bring N10 million and we give you N10 million. What we are saying is to put your money in your account and use all the available channels including eNaira to do your transaction.”

He also said “currently we have 88 per cent of the total money in circulation, approximately N2.9 trillion (both inside and outside the bank) constituted by two denominations of N500 and N1,000.”

According to the director of currency, “Even from the deposit, we have received now, 95 per cent is in those denominations.”

“Out of N165bn, N1,000 constitutes N86bn, N500 is about N51bn and if you come down to N200, it is just N7bn which translates to 4 per cent.

“Going forward, the N1,000 and N500 will not be easily available for hoarding. We want to drive a cashless policy and we want to reduce the cost of currency management because you have to carry these sums across the 36 states.”

Redesigned naira notes not targeted at anyone 

Fielding questions from State House reporters after the launch of the redesigned naira notes by President Muhammadu Buhari at the Council Chambers of the Presidential Villa, Abuja, Emefiele said: “Our policy of redesign and reissue is not targeted at anyone.

“But of course, we have the laws and we will indeed be more intense in ensuring that the provisions of the law and our CBN regulations about the size and volume of currency that people can carry, or hold or withdraw we will insist that this is done going forward.  

“In other countries, in the US, you want to withdraw $10,000 from the counter, you will be interrogated, you will fill numerous forms, they will even track the use of that $10,000 cash that you are withdrawing. Or if you want to withdraw £10,000 from the counter, they will refuse and if you insist, then you will fill out forms.

“The problem we have had in the past is that we say this is a cash economy. There is no economy that is inbuilt thinking that it has to be a cash economy.

“The world has moved away from predominantly cash to a cashless economy. And I think Nigeria and the Central Bank of Nigeria are prepared at this time to move towards a cashless economy. 

“And that is the reason why, with the reissue of these notes, we will insist that cashless be nationwide. We will restrict the volume of cash that people can withdraw over the counter.

“If you need to withdraw a large volume of cash, you will fill out uncountable forms. We will take your data, whether it is your BVN, or your NIN, so that enforcement agencies like the EFCC or ICPC can follow you and be sure that you are taking that money for a good purpose.


By Sunday Michael Ogwu & Muideen Olaniyi 

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