“New naira, old problems” – The Nigerian Tribune‘s very valid opinion. In this article, we shall discuss the problems of the new naira notes recently unveiled.
Naira: The Nigerian Currency
For those of you who don’t know or haven’t heard the word “naira” before, it is the legal tender of Nigerians. Our valued currency. It is the money we use in all kinds of local cash transactions. We deposit naira in commercial banks that offer interest for given time periods.
See: 8 ways to spot fake new Naira notes
Purpose Of The New Naira
Feels like only yesterday when President Muhammadu Buhari announced the emergence of redesigned naira notes. Millions of Nigerians were surprised, to say the least, when the new naira notes entered circulation on December 25. Currently, you can access them at any local bank.
In the same vein, we advise you to tender all old naira notes into the bank on or before January 31st. After that day, old naira notes will cease to be legal.
What that means is you won’t be able to use it to buy a sachet of water. Deposit your naira now. Thankfully, you don’t have to worry about added bank charges for large deposits. You can thank your government for that.
According to the Presidency, the official reason for circulating the new naira notes is to help the Central Bank of Nigeria (CBN) regulate the money. This means they will:
- Have ample control over the new naira notes
- Prevent counterfeiting (the production of fake money)
- Encourage a cashless economy
- Stave off cash hoarding
- Encourage financial inclusion
- Reduce kidnapping and terrorism
There are some like me who believe the viability of any economy has little to do with its currency design and more to do with productive activities in the economy.
See: I no sabi this one: Bus conductor rejects redesigned Naira note from passenger
CBN Governor, Mr. Godwin Emefiele, who disclosed the apex bank’s decision to redesign the banknotes at a media briefing in Abuja, says the change is approved by President Buhari.
He says the development is also aimed at checking the increasing ease and risk of currency counterfeiting evidenced by several security reports. The development aims to reduce financial insecurity.
Emefiele believes there is significant hoarding of naira notes by members of the public, with statistics showing that over 80 percent of the currency in circulation was outside the vaults of the commercial banks. As of September 2022, a total of N3.2 trillion was in circulation, of which N2.73 trillion was outside the vaults of the banks. He described the development as unacceptable.
Off the books, some even argue that the emergence of new naira notes is for another unofficial reason, and that is the coming elections. Nonetheless, Godwin Emefiele has stated that this redesign exercise is the responsibility of the CBN and they will fully commit. The governor of CBN suspects some people (coughs, politicians) have been hoarding bills because of the upcoming presidential elections and this is his ever-so-bright attempt to reduce the margin of foul play.
Related: Tribal Politics In Nigeria
Design Of The New Naira
Well, if you want my opinion, whoever handled the designing of these new naira notes should return to his alma mater and demand a refund, because the truth is I don’t see a design. They should have just called it the discoloration of the new naira, instead.
It’s like someone took a wad of naira bills, stuck them in different dyes, and pulled them out to offer CBN.
Where the former N200 note was a pale green, the new one is a dull red. Where the former N500 and N1000 notes were multicolor, the new ones are not. The N1000 note is blue and the N500 note is green. If you haven’t been able to get any of these new notes, just go to any nearby ATM and make a cash withdrawal. The notes are already in circulation so you should have no issues accessing them.
See: Nigerian family rejects old naira notes as bride price due to CBN deadline
Problems With The New Naira
ATMs nationwide must have decided to go on strike without prior notice, because the scarcity of naira notes in the state has worsened since the emergence of new naira notes. At different banks, you are likely to find seventeen or more people gathered in an eternal wait to withdraw.
How long the shortage will last, one cannot say. However, we expect it to end soon, maybe within the first week of February.
Meanwhile, voices of the opposition continue to preach the uselessness of the new naira. They say all the government has done is window-dress the issue without offering any tactical solutions. That the redesign does nothing to solve the underlying problems of the economy. The central issue with the naira is the downward spiral in value. In 2015, 1 dollar equaled 150 naira. Now, 1 dollar equals 750 naira.
As expected, many delegates aren’t taking this change with goodwill. A few days ago, Godwin Emefiele was threatened with an arrest warrant. And leaders of the National Assembly (NASS) scheduled a meeting with the President of Nigeria, probably to voice their complaints.
Rural dwellers in not-so-modernized states have lamented the naira redesign, stating that it leaves them with no legal tender once the deadline passes. All of these are made worse by the Nigerians who refuse to collect old naira notes, in spite of the deadline still being days away. The Zamfara state branch of the CBN recently warned the public that refusing to collect old naira notes before the deadline is illegal and punishable by law. They directed the police to arrest those found wanting. POS Operators have also been asked to create accounts for those who wish to deposit money but have no accounts.
And just as predicted, the CBN extended the deadline, which was previously January 31, by ten days (i.e. February 10). And knowing our government, it is very possible that this new one also gets extended.
See: Politicians are behind call for CBN governor’s arrest – CAN
A Word From Battabox
The problems with the new naira are substantial because the redesign of the naira does not affect its value remotely. While we agree that this new policy has the potential to boost business, Nigeria requires a functional economy to strengthen the naira. We suggest that the government addresses certain issues to increase the productive capacity of the economy.
If you have any questions let us know below.
