Confusion deepens as CBN deadline expires today in New Naira

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Nigerians, especially bank customers, were baffled and uncertain about whether the Central Bank of Nigeria’s deadline for the phase-out of the old naira notes was still in effect or had been suspended as a result of the injunction that some northern governors had obtained from the Supreme Court.

The Supreme Court had decided on Wednesday to postpone the deadline pending the outcome of the case that the governors of Kaduna, Kogi, and Zamfara States had brought before it.

The case will be heard by the court on February 15. However, in a response to the lawsuit later on Wednesday, Attorney-General of the Federation and Minister of Justice Abubakar Malami, SAN, stated among other things that the Supreme Court lacked jurisdiction over the matter.

However, on Thursday, a day before the deadline, commercial banks in the nation and bank customers were perplexed as to whether the old N1000, N500, and N200 would cease to be legal tender by Friday (today) or would maintain the status pending when the Supreme Court will review the lawsuit brought before it by the governors.
A number of senior bank executives said they could not predict whether the Friday deadline would be followed; they spoke on the condition of anonymity because they were not authorized to discuss the situation.

They based their defense on the fact that the banking industry’s regulator, the CBN, had not yet issued instructions to banks.

Additionally, they claimed that the governors did not join the banks in their lawsuit.
One of Access Bank’s top executives declined to be quoted when contacted, saying, “I cannot say yes or no. You are aware that there is a court ruling; in this case, it is a Supreme Court ruling, and the CBN has not updated us on this.

We don’t yet know what will happen, another top Ecobank source responded to questions. We will continue to collect old naira notes on Friday since the deadline is today (Friday), but after that, we are unsure of what will happen.

In addition, a top management representative from Zenith Bank said, “As it stands, Friday is the deadline, but there is a Supreme Court judgment so, we don’t know what will happen. There is currently no new CBN circular indicating that an extension will occur.

A Polaris Bank executive added that the lender was awaiting word from the CBN on the issue.

The official stated, “As of right now, we’re unsure whether Friday is the cutoff date for the phase-out of old notes or if we need to wait until the Supreme Court hears the case next week.”

The CBN has not given any instructions regarding whether or not to adhere to the February 10th deadline, according to a top executive of a tier-2 bank who also commented on the subject. At the moment, new notes from the CBN are not arriving as they ought to.

The banks are only able to pay out a few old notes that are stored in their vaults. Sadly, instead of loading their ATMs three to four times a day, some banks only do so once due to the lack of new notes.
POS employees are cash-strapped.
The development occurred as several banks were closed on Thursday and cash-strapped Point of Sale operators closed their stores.

Officials warned that as things got worse, Nigerians might experience hardship due to a cash shortage in the days ahead.

Some bankers asserted that the CBN had restricted the amount of cash it gave to banks.

The bankers revealed, under the condition of anonymity, that the CBN could do more to ease Nigerians’ current cash shortage.

According to a banker who spoke with our correspondent, the CBN is stockpiling supplies for branches. They resisted handing out the fresh naira notes. Banks are currently receiving low volumes of older, lower denominations.

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Cash is scarce, according to another banker. We are aware that the goal is financial inclusion, but there will be problems if customers are unable to use their accounts for what they were intended, even if they want us to use technology. There is more the CBN can do with regard to the cash supply.

A banker denied that there was any kind of pressure, saying, “The CBN’s deadline hasn’t moved people. In contrast to the previous one, where people believed that if they deposited old notes, they would be able to exchange them for new ones or deposit N500 million and receive the same amount in new notes. Nobody seems to be moved. I haven’t seen any evidence that people will comply, but let’s wait and see how tomorrow goes.

One of the bankers was asked if customers were bringing in their old naira notes before the deadline, and he or she responded, “No, they are not. In order to support cash transactions, banks are actually pleading with customers to bring cash.

“The reactions have been mixed,” a second banker who went by the name Emese said. For instance, the matter was decided by the Supreme Court.

The customers are paying with cash. Between 2 and 3 pm, there isn’t much of a crowd. People began entering the bank on Thursday to deposit their cash.

“It is not what we expect, but it is in line with the CBN cashless policy,” a banker from one of the top banks added. There won’t be a simple “take one trillion out of circulation and put it back” scenario.

On Friday of last week, Nigerians were given a seven-day deadline by President Major-General Muhammadu Buhari (ret.) to end the naira crisis.

However, as the crisis persisted on Thursday, Nigerians had to deal with hardships. Even after the country’s current naira shortage subsides, traders and business owners have stated that they would think about keeping their money at home rather than using the banks.

Nigerians have been waiting in line for weeks at empty automated teller machines, and the banking halls are crowded with clients who can hardly get the cash they need.
Speaking with our correspondent on Thursday, some traders in Lagos State expressed skepticism toward the banking industry while others claimed they were forced to keep using the banks.

For Mrs. Fatima Oyebisi, who sells construction supplies at the Maza-Maza plank market, won’t start banking her money until things are back to normal.

She declared, “Even when things return to normal, I won’t be keeping money in the bank again. I’ll keep an eye on developments.

Mr. Emmanuel Osita, a shoe vendor at the Trade Fair Market near the Lagos–Badagry Expressway, bemoaned the impact of the new naira policy on him. Keeping his money at home, he declared, was his plan.

We are already disheartened, Osita remarked. Yesterday (Wednesday), my sister spent the entire morning and most of the afternoon at the bank, but she came away empty-handed. Carrying cash to the bank, such as N300,000 or N500,000, will be difficult for most people. I’ll keep it in my house.

However, some traders were concerned about the risk associated with keeping their money at home.

traders regret
Adaku Nkwor, who sells cosmetics at the Trade Fair market, asserted that carrying cash was not an option.
There is no way Wosilat Taiwo, who sells perishable foods at the market in Ketu, would ever take her money to the bank once more.

She asserted that she wouldn’t be going to the bank with her money because it wasn’t much.

According to a report from the World Bank published in 2022, the percentage of unbanked Nigerians increased to 45% in 2021.

According to the report, “The Global Findex Database 2021: Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19,” 64 million people in Nigeria, a country with a population of close to 200 million, still do not have an account with a financial institution or mobile money platform.

Nigeria was one of the seven nations listed in the report with the highest percentage of unbanked citizens. The additional nations are Bangladesh, Pakistan, China, Indonesia, Mexico, and India.

David Owumi of the Salt House—Institute for Inclusive Governance and Sustainable Development, an inclusion consultant, expressed concern about the impact of the devaluation of the naira on the Central Bank of Nigeria’s efforts to promote financial inclusion in a conversation with our correspondent.

He declared, “Both individuals and businesses are greatly impacted by the lack of money. Our economic philosophy and understanding of financial institutions will change as a result of these experiences. To maximize control over their money, Nigerians will look for better tactics and platforms.
Our correspondent noted that the area’s major banks did not open for business as the CBN policy deadline went into effect today.

Frank Boku, a GTbank client, claimed that the deadline didn’t bother the locals.

Additionally, Bolanle Lukman, an Access Bank customer, stated, “I am managing the cash I have at the moment; I don’t care any more. I thank God that I was able to obtain the new notes. I’m aware that the due date will nonetheless be extended.

Fatima Jaiye, a customer of UBA, expressed her frustration with the system.

The Fidelity Bank in Lagos State’s Palm Grove neighborhood closed on Thursday at 2:00 p.m., according to our correspondent. Additionally, a number of ATMs were not working.

The GTB and Wema Bank, which are located at the Ago-Iwoye axis of Ogun State, had to close due to the influx of people for fear of rioting, according to accountant Nike Olusanya.

A Point of Sale operator, who did not want her name printed, claimed that she was gradually going out of business because she lacked the necessary cash.
Nigerians in the Federal Capital Territory rushed the banks on Thursday to deposit their old notes, not wanting to take any chances.

The number of people depositing old naira notes at Guaranty Trust Bank in the Central Business Area, First Bank in the Jabi area, and United Bank of Africa at the NICON Luxury Hotel has increased, according to our correspondents who visited banking halls and ATM locations.

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At a few banks in Garki, Area 3, including Access Bank, Keystone Bank, and Eco Bank, the same circumstance was observed.

Cashiers were seen dispensing N50 bills from some banks, though it appeared that they were out of the new money.

Due to the lack of the usual heavy crowds, many ATMs in the city center were not functioning.

People were seen waiting around the First Bank ATM, though, in the hopes that the bank would put money in the machines.

The Nigerian Association of Mobile Money and Bank Agents had pledged not to close during the naira shortage crisis.

stores and gas stations
The issue is not unique to point-of-sale agents alone, but some of the agents are able to source funds from unusual sources like going to the filling station, and supermarkets, among others, according to Osaro Ekhator, Chairman of the Association of Mobile Money and Bank Agents in Nigeria.

The apex bank acknowledged on Thursday that the ongoing scarcity linked to the naira redesign and cash withdrawal policy was not anticipated, despite the fact that uncertainty over the CBN policy still exists.

The admission was made at the 22nd fellowship conferment lecture and ceremony, which was hosted by the Nigerian Society of Engineers in Abuja by the bank’s deputy governor in charge of operations, Folashodun Shonubi.

The topic of the lecture was “The complexity of the naira redesign and its advantages for Nigerians.”

Contrary to popular belief, he explained, the goal of the redesign plan, which has been in the works for two years, is not to punish anyone but to boost the economy.

The deputy governor acknowledged that a new industry started by native Nigerians had presented difficulties, but she also noted that many advantages had been realized, including the return of N2 trillion to the banking system.

“Nigerians are very intelligent, as you know,” he said. Additionally, we invented a completely new sector of the economy for people. Queuing is a component of that in which you exchange your position in the queue for cash. A practice known as “night crawling” entails waiting until it is dark, gathering numerous cards from friends and family, going to an ATM, emptying them using various cards, and then taking the money to sell.

So, to be honest, it’s been a little stressful because this kind of behavior was unexpected.

Shonubi pleaded for emphasis on the fact that the difficulties will soon be behind them and that the top will do everything in its power to improve the current state of affairs.

Osita Nwanisobi, the CBN’s Director of Corporate Communications, did not respond to any WhatsApp messages sent to him on Thursday, making attempts to contact him ineffective.

The CBN’s top official, who spoke on the condition of anonymity because he was not authorized to discuss the issue, claimed that as of Friday, the commercial banks had not yet received any communication from the central bank.

In due course, he promised, the CBN’s stance on the issue would be made public. “The CBN has no position on it at this time,” the official declared. Additionally, we haven’t given the banks any directives in this regard. In due course, the bank will announce its stance on the situation.

Inquiries regarding the deadline received no response from the presidential spokesperson, Shehu Garba.
FG will abide
On Thursday, however, the AGF stated that the Federal Government would abide by the Supreme Court’s decision.

“There is no doubt that the Supreme Court’s decision, regardless of the current circumstances, is binding,” he said in a speech on Arise TV on Thursday night. “You can equally take steps that are available to you within the context of the spirit and circumstances of the rule of law,” he continued.

According to what he said, the government was contesting the order because it did not agree with it.

The rule of law is everything, he continued. The Supreme Court’s rulings and orders must be obeyed, according to the rule of law. We’ll follow orders to the letter. In accordance with the rights and privileges granted to us as a government, we are equally considering it from the perspectives of challenging the order and seeking for it to be set aside. The rule of law stipulates that when you are not happy with a ruling, you can now file an application, among others, for setting aside.

“So, the rule of law is everything, the rule of law relating to obedience and compliance, the rule of law relating to filing an application seeking the setting aside of the judgment or orders. The rule of law is the framework within which we operate.

Banks claimed on Thursday that they had not yet received any instructions from the CBN, despite the AGF’s assurance that the Federal Government would follow the Supreme Court’s decision.

In a related development, the governor of Edo State has distanced himself from the remarks and actions made against the currency swap policy by the governor of Kaduna State, Mallam Nasir El-Rufai, and some other governors.
The state government stated that Crusoe Osagie, Special Adviser to the Edo State Governor on Media Projects, does not speak for Edo State and urged “guided utterances and inferences in such critical matters, especially in the heat of the political season.”

However, the governor of Zamfara State, Bello Mattawalle, described the negative commentary surrounding the high court’s ruling as nothing more than a political vendetta.

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Speaking via his Special Adviser on Media, Zailani Bappa, Matawalle declared that he was absolutely certain that anyone who opposed their action and subsequent victory at the Supreme Court was either misinformed or oblivious to political chauvinism.

“I and my counterparts from Kaduna and Kogi states found it necessary to approach the Supreme Court in order to prevent the economy of Nigeria from being thrown into further crisis,” Matawalle said.

The agonizing pain that the average Nigerian is going through due to the shortage of both the old and new naira notes will also be relieved by our action.

Malam Salihu Lukman, national vice chairman of the All Progressives Congress (North-West), has expressed concern about the naira swap policy, pointing out that over 300 of the 774 local governments, particularly those in the North, lack banks.

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