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Shortage faces new naira notes rollout

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Central Bank of Nigeria’s (CBN) issuance of the new naira banknotes is currently surrounded by rumours of confusion, scarcity, and even rejection.

Yesterday, reports from across the nation indicated that some Nigerians were reluctant to accept the new banknotes, with some merchants and transporters refusing to accept them.

In some regions of the country, including the capital Abuja, the notes are so scarce that banks are rationing them or are still issuing the old notes.

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Some traders told News Week Nigeria that they would continue to use the old notes for the time being and observe events over the next few days.

Traders in numerous Benin markets stated that they could not vouch for the authenticity of the new naira notes that some customers wished to use as payment.

Mrs. Uche Chukwuma of New Benin Market stated that she has chosen to continue collecting old naira notes from her customers for the time being in order to avoid regrets.

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Chief Ehis Osemwengie, an additional trader at the Oba Market in Benin, has decided to use the old naira notes until he becomes familiar with the new ones.

Mr. Tobi Adejare, the operator of a Point of Sale (POS) centre in Mokola, Ibadan, reported that none of his customers had requested the new naira notes.

In addition, he reported that customers disliked the designs of the new naira notes, which made it difficult to identify counterfeits.

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Kayode Omole, a tricycle driver in Sango, Ibadan, stated, “I have no choice but to continue spending the old naira notes until the CBN deadline.” I prefer older music to newer music.”

A young boy selling bananas on Gimbiya street in Garki Area 11 refused to accept the new N500 note, claiming he did not know if it was genuine or counterfeit.

In a viral video viewed by one of our correspondents, a vendor is seen rejecting a customer’s new naira note. She stated that the new currency is not authorised for use in the country.

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Abuja banks are rationing new Naira banknotes.

Yesterday, an investigation by The Nation in Abuja revealed that banks were forced to ration the new naira notes.

Abuja, Federal Capital Territory (FCT) bank employees

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The bank confirmed to The Nation that they had received the new Naira notes but were hesitant to distribute them to customers.

According to them, the reason for the rationing was that the volume of the larger denominations of N500 and N1,000 was insufficient, and many bank customers were not interested in carrying large amounts of the N200 denomination.

The bank staff reported that customers appeared uninterested in the new currency.

Similar scarcity was observed in Ibadan, where it was discovered that the new N1,000 notes were more prevalent than the others.

A source from one of the banks stated, “The new notes are insufficient.” In the majority of banks, the N1,000 note has thus far been introduced.

“Customers are unenthusiastic about acquiring it because they must wait until January. There’s no hurry.

It is rationed so that it does not become concentrated in a few hands.”

Some Ibadan residents requested an extension of the deadline for the transition from old to new currency.

Mrs. Deborah Adekitan, a merchant in Bodija, Ibadan, alleged a shortage of the new naira notes and urged the government to extend the one-month deadline for the phase-out of the old notes.

The Director of Currency Operations at the Central Bank of Nigeria (CBN), Ahmed Bello Umar, stated that the distribution of the new notes across the country would begin last Thursday.

“This does not mean that we will immediately begin distribution, as we do not want to create panic or a stampede among those who want to collect the new notes,” he said.

The CBN has already informed the banking public that when the new cash withdrawal limit policy goes into effect, there will be fewer high-denomination currencies in circulation and more low-denomination currencies.

It was also confirmed that the majority of Abuja’s banks have not yet configured their Automatic Teller Machines (ATMs) to dispense the new naira notes.

Automated Teller Machines (ATMs) continue to dispense outdated naira notes.

The majority of Automated Teller Machines (ATMs) across the country are still dispensing obsolete naira notes, according to an investigation.

In Benin City, the state capital of Edo, and its environs, ATMs were dispensing the obsolete currency. Additionally, commercial banks paid customers in the banking halls with the outdated currency.

Officials of a number of commercial banks who loaded money into ATMs in Benin yesterday declined to comment on the situation and referred our reporter to their headquarters in Lagos.

The situation was identical in Abia, as commercial banks in the state continued to issue outdated currency to their customers.

Our correspondent who visited some commercial banks in the state yesterday reported that old naira notes were still being dispensed at ATMs and over the counter by bank employees who were assisting customers who had come to withdraw cash from the banking hall.

This is contrary to the directives of Nigeria’s central bank (CBN) for banks to begin paying customers with the new notes.

Some bank customers who wished to remain anonymous told our correspondent that they were disappointed that their banks had not yet complied with the CBN governor’s directives.

They claimed that their hopes of touching the new naira banknotes were dashed.

Plateau State bank customers were left frustrated for the second day in a row yesterday, as the majority of commercial banks in the state continued to struggle with the unavailability of the redesigned Naira notes.

Cash Withdrawal Limit: POS Operators Petition President Buhari and Congress

Point of Sale (POS) Operators in Nigeria and the Arewa Consultative Forum filed petitions in response to the cash withdrawal limit policy issued by the CBN yesterday in conjunction with the redesign of naira banknotes (ACF).

In a petition to President Muhammadu Buhari and the National Assembly, the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) requested the suspension of the policy to prevent 1.4 million bank agents from losing their means of subsistence.

Mr. Victor Olojo, the national president of AMMBAN, addressed journalists in Abuja regarding the petition and stated that over 1.4 million people could lose their jobs if the policy is not suspended or reviewed.

The group specifically requested an increase in the maximum weekly withdrawal limit for individuals to N500,000 and for corporations to N3million.

They added that they would continue their series of interactions with key stakeholders.

Olojo stated at the news conference, “AMMBAN believes the cashless policy in its current form has not adequately accommodated Mobile Money and Bank Agents in Nigeria.

“Although the CBN Governor cited the widespread presence of Mobile Money and Bank Agents as one of the reasons he believes the country is ready for a cashless policy, the current cashless policy threatens the employment of over 1.4 million agents.

“This and numerous other pertinent considerations influenced the Association’s decision to engage the CBN, the National Assembly, and other relevant parties.

“This is to ensure that, while showing support for the government’s cashless policy through the CBN, the policy recognises the categorization of Agents’ accounts in the same manner as individuals and corporations.”

Senator Uba Sani, chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, and Representative Victor Nwokolo, his counterpart in the House of Representatives, were contacted by the organisation.

He stated: “They all agreed that due to the importance of Mobile Money and Bank Agents in the successful implementation of the Cashless policy, the accounts must be categorised in order to serve the Nigerian people, particularly in areas where there are no banks or basic infrastructure to facilitate the use of alternative channels of transaction.

“It is important to note that AMMBAN and its members have been at the forefront of the Financial Inclusion initiative since its inception, ensuring the achievement of its goals.

“It is widely believed that no success story could be told without the selfless efforts of agents who, against all odds, travel to the creeks and hinterland in an effort to advance the CBN’s financial inclusion goals.”

Why the ACF must review the cash withdrawal limit

In its own response, the ACF asserted that CBN’s insistence on implementing the policy would cause the informal sector of the economy to collapse catastrophically.

Murtala Aliyu, the forum’s secretary general, said in a statement that the CBN seemed to have overlooked the fact that commodity market transactions, particularly in rural areas, are entirely cash-based.

The statement: “The decision by the Central Bank of Nigeria, CBN, to launch the long-awaited cashless payments regime in Nigeria beginning in January 2023 is well-justified and perhaps even well-intended.” Cash-based economies are notoriously expensive, inefficient, and vulnerable to attacks from bad actors.

“It takes an enormous amount of time and money to print the currency, and even more to move it through the system. The currency notes have an expiration date, after which they must be replaced. Cash is the lifeblood of the criminal underworld, as it is difficult to trace and extremely convenient for terrorists, money launderers, smugglers, etc.

“Therefore, it’s better for law-abiding citizens if the CBN succeeds in making less cash available to all of these criminals. However, we must keep in mind that the path to hell is paved with good intentions. While pondering this policy, CBN officials may have had the best intentions, but they have evidently failed to consider the unintended consequences of implementing it as planned, which may be extremely grave.

“If the CBN insists on implementing this wholly unrealistic policy of restricting cash withdrawals from banks to N20,000 per day, N100,000 per week, or N500,000 in the case of corporate bodies, the informal sector of the economy will soon collapse catastrophically. CBN understands better than anyone else that transactions on commodity markets, particularly in rural areas, are entirely cash-based.

“Villagers who bring their chickens, beans, onions, goats, or cows to market typically lack bank accounts and internet access. Cash remains the predominant medium of exchange in the majority of the country, especially in the North. This should not come as a surprise, as bank offices are generally inaccessible to even the most motivated and skilled individuals.

Even according to CBN reports, more than 38 million adults in Nigeria do not have access to banking services, with “women, rural residents, Micro-Small and Medium-Sized Enterprises, and Northern Nigeria” among the most disproportionately excluded. And despite its pious pretensions, it is documented that the CBN under its current management has done much to undermine and stifle the progress of financial inclusion in Nigeria, ostensibly to protect the commercial banks’ interests.

“Due to the decisions made by the CBN, Nigeria has the dubious distinction of having the lowest financial penetration in all of Africa, and possibly the world. The CBN will do itself and the nation a world of good if it increases its efforts to address these issues. It should begin by ensuring that a sufficient number of diverse financial institutions are established nationwide.

“It should provide a level playing field for a variety of financial service providers and promote collaboration between them. Additionally, the CBN must enforce stringent regulations that safeguard people’s funds. It must inform, motivate, and adequately prepare the public for the transition.

“Until the CBN is able to address these challenges substantively, a preemptive move or “frog-jump” into a cashless payments system, regardless of how well intentioned, will only land us in a bottomless pit,”

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