Financial institution customers have expressed their dissatisfaction with the need that the freshly created banknotes be made accessible at ATMs and for in-person transactions. They believed that the poor circulation was detrimental to business.
Customers voiced worry that the deadline of January 31, 2023 for turning in all old banknotes to the banks will place an unnecessary strain on them owing to the restricted circulation of the banknotes.
A trader in Lagos named Moses Adigun claimed that despite it having been about two weeks after the new notes entered circulation, he has still not received any.
“I keep hearing that there are new banknotes in town, but I have not even touched one. This will make it difficult to beat the January 31 deadline for all old notes to get to the banks,” he said.
Michael Obinna, who owns a provision store, revealed that only one of his customers has ever given him a N1,000 note.
“I have only received N1,000 note from a customer who came just yesterday. I think the circulation of the new notes is very poor,” he said.
Tope Fasua, an economist, provided a different perspective on the shortage of new banknotes.
He speculated that the Central Bank of Nigeria was trying to bolster the naira by making banknotes scarce on purpose.
He stated, “People have speculated that the CBN will not print all the N3.2 trillion it is taking out of circulation, and that makes sense. The scarcity of the naira at some point may lead to people changing their dollars back into naira cash just to live their everyday lives, thus strengthening the naira.
“Scarce naira cash, coupled with the innovations that the CBN is bringing up, such as the naira domestic card, will also lead to better adoption of e-banking. In the UK for years now, a third party cannot pay cash into any account. In most countries, they have since gone contactless.”
Fasua said that the redesigned naira has a wider significance than combating counterfeiting and provides an opportunity to improve the currency’s long-term trajectory.
“The Central Bank must seize this opportunity and I also advise President Buhari to do the same. In Economics we always talk about unintended consequences. The first phase was the slump in the value of the naira as people moved money from their soak-aways to buy foreign currency, especially those who are too criminal to put same in a bank. A second phase could be marked by the strengthening of the naira in that same black market,” he speculated.
As the Central Bank of Nigeria (CBN) instructed, Deposit Money Banks (DMBs) began issuing new naira notes to their customers on December 15.
Due to a shortage of new notes, bank tellers have used a combination of old and new naira notes while dealing with customers in person.
According to an unnamed customer care representative at a Tier-1 bank: “The tellers were asked to mix the funds. For large volume withdrawals, only 10 per cent of the funds will be in new notes. I think it will get better with time,” she remarked.
On the first day the new naira note was circulated, several Automated Teller Machines (ATMs) in Lagos still dispensed old naira notes.
Commercial banks in Nigeria’s major cities have started dispensing a few redesigned naira notes to over-the-counter clients, despite the Central Bank of Nigeria’s (CBN) announcement that distribution of the new naira notes has begun to Deposit Money Banks across the country.
Some clients who were paid the newly redesigned naira notes during a Tuesday visit to some banks on Victoria Island, Ajah, Ikate, and Oshodi in Lagos stated the notes needed more to meet their needs requests, while all ATMs were dispensing old notes.
Recently, CBN Governor Godwin Emefiele announced that the new currencies have arrived at banks and are likely to be distributed to the public in the near future by banks to their customers.
They may be doing this because Emefiele has stated that the new and old notes will function together for some time.