CBN Explains Why New Naira Note is Scarce
Limited Supply of New Naira Notes Despite Deadline Extension: Bankers Shed Light on the Situation
With just six months left until the deadline for the use of old naira notes, many Nigerians are expressing concerns about the scarcity of new naira notes. Despite the Supreme Court’s extension of the deadline to December 31, 2023, banks continue to predominantly pay customers with old naira notes. In this article, we explore the possible reasons behind the limited supply of new naira notes and provide insights from bankers.
During a visit to a commercial bank in Ikeja, a customer complained to a cashier about their N40,000 withdrawal, which was paid in old notes along with those of other customers. The cashier explained that the bank had no control over the type of currency supplied as they only received old notes from the Central Bank of Nigeria (CBN).
A branch manager at another commercial bank, who identified himself as Ifeanyi, expressed his belief that the CBN was unprepared for the new naira notes. He explained that 70% of every cash supply received from the CBN had been old notes. Ifeanyi went on to say that “It takes almost two years for new notes to be in full supply anywhere in the world. I am worried about what will happen again by December based on the current situation.”
Attempts to contact Isa Abdulmumin, the CBN spokesman, in order to gain clarity on the limited supply of new naira notes were unsuccessful. However, the CBN has reported that the amount of currency in circulation in the country rose by N701.4 billion within a month, reaching N1.6 trillion as of March 2023. The CBN defines currency-in-circulation as currency outside of the central bank’s vaults, meaning all legal tender currencies in the possession of the public and in the vaults of the Deposit Money Banks.
Impact on Nigerians
The limited supply of new naira notes has had a significant impact on Nigerians. As the deadline approaches, many are worried that they will be stuck with old notes that will become useless. The situation has also led to long queues at banks, as people try to exchange their old notes for new ones. Overall, the scarcity of new naira notes has become a major concern for Nigerians and highlights the need for better planning and implementation of currency redesign policies.