In 2022, Nigeria’s apex bank, the Central Bank of Nigeria, announced its plans to redesign the currency.
The bank noted that N200, N500, and N1000 denominations would be redesigned by December 15, 2022.
The central bank also announced that by January 31, 2023, the old notes existing would cease to be accepted as legal tenders.
The apex bank, however, changed its stance on the deadline after many Nigerians complained of inability to access the new notes.
Defending its action, the Central Bank of Nigeria Governor, Godwin Emefiele, revealed that redesigning the naira would help to curb counterfeiting and hamper ransom payments to terrorists and kidnappers.
The new date was set for February 10, 2023, although the Supreme Court, last Wednesday, restrained the CBN from banning the use of the old notes.
In a publication on its website, the CBN had stated that the weekly withdrawal limit for individuals would be N500,000, while that of corporate organisations stood at N5 million.
The statement further read that the developments would help to pivot Nigeria to a cashless society, signaling an attempt to bring more citizens to e-banking.
The CBN also aims to keep lesser currencies out of the banking system, meaning that more Nigerians are expected to own bank accounts and save money due to the naira redesign.
As of August 2022, the percentage of currency that was unbanked stood at 83 percent. Although the CBN announced that it had recorded tremendous success in mopping money from the economy due to its redesign policy, the apex bank noted that it had gained extra N1.9 trillion into banks due to its redesigning policy.
Some Nigerians who spoke with Dataphyte, however, narrated their experiences accessing the new naira notes, lamenting that they spent hours in queues at automated teller machines (ATM) and the banks but ended up not getting the new naira notes.
One of the frustrated Nigerians, Abdullahi Toheeb said, “I went to the bank as early as 7 a.m with the hope that I would get the new currency. I, unfortunately, could not access the money and left the bank around past four pm. The number I was given was not called till I left,” he lamented.
Dataphyte surveyed POS operators in Nigeria’s Federal Capital Territory, and the result showed that to withdraw N5000, POS patronisers paid N1000-N1500. However, withdrawing N10,000 would cost N2000- N3000.
POS operators told Dataphyte that they increased their rates due to the scarcity of the new naira notes.
Before the redesigning of the naira, withdrawing N5000 attracted a charge of N100, while N10,000 cost N200.
“It is very hard for us to access the new naira notes, so we spend a whole day or more before we can get a small amount of money,” a POS operator, who identified herself as Chidera Micheal, said.
A Dataphyte report had highlighted challenges faced by the POS operators due to the CBN policy.
A respondent, Seun Akinlabi, told Dataphyte that while the CBN had asked Nigerians to explore alternative banking means such as bank applications and shortcodes, there were several hitches in using these alternatives.
“Most times when I try to deploy my bank’s application, the network fails to work; even the shortcodes do not work,” she noted.
Some Nigerians who spoke with Dataphyte noted that they had been visiting banks intending to open accounts and collecting automated teller machine cards in the face of the CBN’s new development.
Nigeria’s broadband penetration at 47.36%
Data from the World Bank show that there are 16.15 automated teller machines (ATM) for every 100,000 Nigerians.
The ATM dispensing errors remains rife. Nigeria is said to be one of the countries with the highest number of ATM dispensing errors.
There are also only 4.3 commercial bank branches for every 100,000 Nigerian adults.
According to the World Bank, only 32.69 percent of Nigeria’s poor population have an account at financial institutions or with mobile money service providers.
A further review of the broadband penetration data published by the Nigerian Communications Commission shows that the broadband penetration of the country stood at 47.36 percent as of December 2022.
This means that only 47.36 percent of the locations in Nigeria have internet broadband penetration, a key factor determining the ability to use mobile banking or internet banking.
The Global System for Mobile Communications noted that as of 2020, only 39 percent of rural areas in the country had access to mobile internet. This represented a fall from the 53 percent access in 2018.
The POS machine, which Nigeria has been deploying to help increase financial services access, also works with internet availability.
CBN keeps mute over judgment
Despite the Supreme Court judgment which restrains the apex bank from ending the use of old naira notes on Friday, the CBN has not told Nigerians whether the use of old notes ends on February 10 or not.
Many Nigerians are stressed by the swift refusal of old naira notes across the country. Several banks such as Zenith Bank are temporarily shut due to attacks by customers. Several banks are no longer able to carry out cash swap.
Several attempts have been made to speak with the CBN on this issue, but all to no avail.
“This is the kind of confusion that no serious country must have. It raises the risk profile of a country like Nigeria before investors,” a financial analyst, Ade Demola, said.
” Many people are confused, which should not be so. This should not be coming from a monetary policy regulator,” he added.
Experts speak
Speaking to Dataphyte, Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, noted that the unavailability of internet infrastructure was a crucial constraint to internet banking in the country.
“As you can see, many Nigerians have been complaining about the inability to use their bank applications or the internet banking. this is due to poor internet infrastructure”
Yusuf called for more investments in internet infrastructure in the country to boost the cashless policy.
The Director of Research and Strategy at Lagos-based Chapel Hill Denham, Mr Tajudeen Ibrahim, weighing in on the development, faulted the CBN for the one-time approach to a cashless policy. According to him, moving the country to a cashless society should be gradual and not immediate, noting that Nigeria needed more time to achieve it.