Following the Naira Scarcity in Nigeria, GoldenNewsNg has compiled Latest CBN News and Update on Naira Notes Today 27th April 2023.
1. New Naira Notes Scarcity: CBN May Phase Out Newly Redesigned Notes, Nigerians Say
Many Nigerians are currently speculating that the Central Bank of Nigeria (CBN) may be gradually withdrawing the newly redesigned naira notes from circulation due to their scarcity on ATMs and across the counter. The redesign policy, which was introduced on December 15, 2022, has been poorly executed, leaving many Nigerians wondering what happened to the new notes.
The decline in the circulation of the new notes began after the apex bank was forced to rescind its decision to withdraw the old notes following a Supreme Court order. As a result, the CBN has been under immense pressure to ease the cash crunch that nearly crippled the economy between February and early March this year.
Bankers and customers alike are expressing shock at the scarcity of the new notes, with some suggesting that the CBN did not print enough of them. Clive Kennedy, a banker with one of the new-generation banks, expressed surprise that the new notes were rarely in circulation and called for an explanation from the apex bank.
Kennedy also suggested that the few available new notes may be hoarded by Nigerians, further exacerbating their scarcity. Comfort Babajide, a trader in the Ipodo market in Ikeja, went further to suggest that the CBN has tactically withdrawn the new notes out of shame because of the difficulties Nigerians went through due to the redesign policy.
Despite the relative abundance of old naira notes, Nigerians remain apprehensive that the scarcity of the new notes might return after the December deadline given by the Supreme Court. However, some believe that the incoming government may not allow this to happen.
Efforts to get the CBN’s Director of Communication, Isa Abdulmumin, to comment on the issue were unsuccessful as he did not respond to calls, text messages, and WhatsApp messages.
2. Mobile Banking Surges in Nigeria Amid Naira Scarcity
The scarcity of the naira in Nigeria has caused a significant rise in the use of mobile devices for financial transactions, with data from the Nigeria Interbank Settlement System indicating a surge of 505.29% in mobile transactions during the first quarter of 2023. The volume of mobile transactions rose to 671.93 million from 111.01 million in the corresponding period last year, while the value of mobile transactions grew to N9.07tn from N3.49tn in 2022.
Central Bank Policy Spurs Growth
The Central Bank of Nigeria’s redesign and withdrawal limit policy has been cited as the main driver of the surge in mobile banking usage. This policy caused naira scarcity, forcing many individuals and organisations to rely on online banking services. The policy stated that the maximum weekly limit for cash withdrawals across all channels by individuals and corporate organisations shall be N500,000 and N5m, respectively, and customers should use alternative channels such as internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc., to conduct their banking transactions.
Mobile Banking Usage Grows Globally
The surge in the use of mobile banking in Nigeria is part of a wider trend of increasing digital transactions. According to GSMA, global mobile money transactions grew by 22% from $1tn in 2021 to around $1.26tn in 2022. In Nigeria, mobile accounts grew from 16% in 2021 to 22% in 2022. The COVID-19 pandemic has been cited as a factor in this trend, as it has led to a reduction in the use of cash, with more people turning to mobile banking.
Challenges in Mobile Banking
While the growth of mobile banking presents opportunities for financial inclusion, it also comes with challenges. Bank mobile apps failing to open and USSD options not working have become commonplace, while mobile devices are increasingly targeted during muggings, enabling perpetrators to access victims’ accounts. Nonetheless, GSMA sees mobile banking as a driving force behind financial inclusion around the world, offering an incredible opportunity to reach the 1.4 billion people who still do not have access to financial services.
3. Scarcity of new Naira notes hits Abuja
As the December deadline approaches for the discontinuation of old naira notes, residents of Abuja and its environs are expressing concern over the scarcity of the new notes. Despite the Central Bank of Nigeria (CBN) allowing the old 200, 500, and 1000 naira notes to remain as legal tender until the end of the year, some residents are worried that the scarcity of the new notes could lead to a repeat of the cash crunch experienced earlier this year.
Scarcity of New Notes
A correspondent of the News Agency of Nigeria (NAN) who monitored the availability of the new notes reports that residents are lamenting over the scarcity of the new notes. Moses Nnegedu, a resident of Nyanya, suggested that the CBN should monitor commercial banks to ensure the circulation of the new naira notes before the deadline.
Hoarding of New Notes
According to Gabriel Daniel, a resident of Garki, even the banks are dispensing old notes both at the ATMs and in the banking hall, making it difficult for customers to obtain new notes. Nigerians believe that those who have a lot of money and were able to get the new notes earlier are hoarding them against the December deadline. Abbah Moses, a resident of Gwagwalada, confirmed that the scarcity might be due to the hoarding of the new notes.
Need for More New Notes
Mr. Manasseh Gimba, a resident in Dutse, suggested that the CBN should print more new notes and ensure they are in circulation. He also proposed that the old notes in circulation should be limited if the December deadline is to be met. Meanwhile, the Supreme Court had earlier extended the validity of the old naira notes until December 31, 2023.
As Nigerians continue to express their concerns over the scarcity of the new notes, it remains to be seen if the CBN will take steps to increase their circulation before the December deadline. Failure to do so could have serious implications for the country’s economy and the daily lives of its citizens.
4. Katsina State: As Naira Scarcity Ends, Banditry, Kidnapping Return
The re-emergence of banditry and kidnapping for ransom in Katsina State has been a concern since the cashless policy by the Central Bank of Nigeria was extended and the old Naira notes recirculated. However, the Katsina State Police Command has made announcements of repelling attacks carried out by suspected bandits in the state, resulting in the death of three suspected bandits in different operations. The northwest coordinator of the Coalition of Northern Group affirmed that the cashless policy has reduced insecurity in the state and Nigeria in general. Governor Aminu Bello Masari confirmed the reduction of banditry and urged the incoming administration to sustain the template to finally end the atrocities.
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