The Central Bank of Nigeria, CBN, took the campaign to the famous Onitsha main market yesterday, reminding traders that the current denominations would cease to be legal tender on January 31, 2023.
The denominations affected are one thousand, five hundred, and two hundred naira notes.
Mr. Benedict Maduagwu, branch controller of CBN, Awka, who led the team, along with officials of commercial banks operating in Onitsha, assured the traders that they would not be charged any fee regardless of the amount deposited in the banks.
He described currency management as a key function of the CBN and lamented that in recent times, Nigeria had faced several challenges that had grown in scale and sophistication, with unintended consequences for both the apex bank and the country’s integrity.
According to him, one of the challenges is a significant hoarding of banknotes by members of the public, with statistics indicating that N2.72 trillion of the N3.26 trillion in circulation as of June 2022 was outside the vaults of commercial banks across the country and allegedly held by members of the public.
“The statistics show that 84.71 percent of currency in circulation is outside commercial bank vaults, with only 15.29 percent in Central Bank and commercial bank vaults,” he said.
“There is also a worsening shortage of clean and fit banknotes, which leads to a negative perception of the CBN and an increased risk to financial stability, as well as increased ease and risk of counterfeiting by criminals.”
Several security reports received at the Central Bank of Nigeria attest to this.”
The benefits of the currency redesign to the Nigerian economy, according to Maduagwu, are enormous, as the policy will help to control inflation and bring hoarded currency into the banking system, making monetary policy more effective.
He went on to say that it would also help with better monetary policy design and implementation because the country would have much more accurate data on money supply and monetary aggregate.
“We believe that this exercise will aid in increasing financial inclusion, transitioning to a cashless economy, and ensuring financial security.”
More formalization of the Nigerian economy.
“The currency redesign would also assist in the fight against corruption as the exercise would rein in the higher denomination used for corruption, and the movement of such funds from the banking system could be tracked easily.
“Although the global best practice is for central banks to redesign, produce and circulate new local legal tender every five to eight years, the naira had not been redesigned in almost 19 years.
“The new design and current series would continue to circulate side by side until January 31, 2023 when the outgoing denominations would cease to be legal tender.
“We advise members of the public to ensure that they deposit cash holdings in these denominations at their commercial banks.
“There is no limit to how much a customer can deposit between now and January 31, 2023 as the CBN has suspended bank charges”.
He encouraged traders to use other payment channels for their economic activities, such as eNaira, POS, electronic transfer, USSD, internet banking, and mobile money operators and agents, while regretting that some Nigerians were using naira notes to design their rooms.
Mr. Innocent Ezeoha, Chairman of the Onitsha Market Traders Union, urged the CBN to bring the new currency to the market so that traders could exchange the old currency immediately after their daily business until January 31.
He also urged the CBN to direct commercial banks to begin disbursing the new notes, claiming that some of the banks were selling the new notes.
Mr. Charles Nwoji, Anambra State Director of the National Orientation Agency, NOA, stated in his speech that NOA would take the message to all parts of Anambra from January 16 to 31, 2023.
“We will visit traditional rulers, presidents of communities, markets, and churches to educate the public about the currency redesign,” he said.
