For the umpteenth time, the Senate has urged the Central Bank of Nigeria (CBN) to extend its deadline on old naira notes withdrawal from circulation to July 31, 2023 as against January 31, 2023.
The apex bank had December 15, 2022, commenced circulating newly redesigned N200, N500 and N1000 notes and set January 31, 2023 as deadline for the withdrawal of old notes.
The lawmakers raised concerns as the inability of Nigerian banks to load their Automated Power Machines (ATM) is bringing untold hardship to depositors wishing to withdraw the new naira notes.
One of our correspondents who visited some of the machines belonging to different banks in the Federal Capital Territory Abuja, reports that the ATMs neither dispensed old nor new naira notes as the machines were “temporarily unable to dispense cash.”
The affected reporter Tuesday evening went to ATM machines belonging to four banks- UBA, Zenith, Fidelity, and Access at the Wuse 2 and Utako areas of FCT, but was unable to withdraw money as the machines were ‘temporarily unable to dispense cash.’
Most of the distraught customers who resorted to the Point-of – Sales (POS) were either charged higher commissions or denied cash by the operators for either withdrawal of new notes or transfer of old notes.
The POS operators were blunt in confessing that they only had old notes where such customers insisted on paying old charges.
Further to this, commercial vehicle operators as well as some traders now insist on collecting new naira notes for services rendered or commodities sold.
But when a customer or commuter cannot provide it, they demand a higher amount for their services or commodities.
For instance, this reporter boarded a Keke NAPEP tricycle from Jabi to Utako and when he got to the point of disembarking, he gave an old N1000 note to the operator who initially rejected it and insisted on a new note.
However, “when I told him all I had on me were old notes and also showed him, he insisted on taking N400 as against the original N200 transport fare. With no other option, I agreed to the arrangement to avoid any embarrassment.”
Also, Tunde, an auto electrician in Jabi area, shared similar experience with Blueprint.
“I stay at Suleja and when I was coming over to work Monday, the taxi man was insisting on taking lower denominations that are still legal tender or higher new notes. It became a source of worry for most commuters. With your money again, you can’t pay for goods and services. Let the CBN go soft on us because we can’t afford to allow our money go in drain. There has to be an extension of deadline,” the commuter said.
With the above scenarios and many others likely to play out in the days ahead of the CBN deadline, the Senate Tuesday directed the apex bank to extend the deadline through resolution passed to that effect which it was yet to concur with.
This prompted the apex lawmaking body to revisit the issue at plenary through a motion by Senator Sadiq Umar Suleiman (APC Kwara North).
During the debate on the motion, the lawmakers complained that the new notes were not enough in circulation, warning that if the deadline was not extended, there would be chaos in many parts of the country.
The lawmakers also expressed dismay that the CBN had insisted on the January 31 deadline despite public outcry.
Specifically, Senators George Sekibo (PDP Rivers South East) and Adamu Bulkachuwa (PDP Bauchi North ), urged the Senate to devise means of forcing the CBN to extend the deadline.
Sekibo said the CBN governor had repeatedly shunned the National Assembly against the extant law directing him to brief the parliament periodically on its monetary policies.
Similarly, Senators Adamu Aliero (PDP Kebbi Central) and Hassan Hadejia (APC Jigawa North East) said the deadline, if allowed to stand, would crumble rural economy, with many losing their money.
“Many people, especially in states, could not get their old notes exchanged for the new ones. The suffering is excruciating. People are spending long hours queuing in banks without success,” Aliero said.
Senator Biodun Olujimi (PDP Ekiti South) said the policy seemed to be targeted at addressing the influence of money in elections, urging the CBN to look beyond the 2023 polls.
The Senate, therefore, asked the CBN to extend the deadline by six months to allow Nigerians, especially those in rural areas more time to change their old notes.
It also urged the CBN to compel deposit money banks to open a naira exchange windows for those without bank accounts.
In his remarks, Senate President Ahmad Lawan assured that the National Assembly leadership would ensure the resolution is implemented by the CBN.
“There are no banks in many local governments. Most people transact business in cash. The CBN should look at the hues and cries of ordinary Nigerians who have laboured hard to earn legitimate money,” he said.
Similarly, the House of Representatives called for extension of the deadline and also constituted an Ad hoc committee under the headship of its Majority Leader, Alhassan Ado Doguwa to meet with the CBN management and those of all money deposit banks in the country to address the issues.
Raising concern on the expected negative impact on the citizens as the deadline draws closer, a lawmaker, Sada Soli, in a motion under matters of urgent public importance, Tuesday, demanded an extension of not less than six months for the process to be concluded.
He said it was time the House urgently intervene to avert a possible economic chaos, as Nigerians would be forced into stampede and desperate moves to beat the deadline’ citing the conflicting argument between the commercial banks and the CBN on availability of the redesigned notes as a good reason to intervene.
While agreeing that the move towards cashless economy was in tandem with global best practices, the lawmaker argued that “for such a policy to be successful, it should not be overbearing on the people and the economy.
“The financial institutions in Nigeria lack the infrastructure to handle a sudden increase in customer base as well as adequate employees to handle any challenges that could arise in the process of implementing the cashless policy within the limited time given by the CBN.”
He also prayed that President Muhammadu Buhari should intervene in the insistence of the CBN on the tight deadline for the implementation of the cashless policy and currency swap.
In his intervention, Speaker Femi Gbajabiamila posited that it was important for both management of the CBN, as well as managing directors of the money deposit banks to meet with the committee, where clarifications can be made on the current status of the redesigned naira notes.
The meeting has been fixed for Wednesday.
Also lending their support to the lawmakers, the POS operators said the January 31 deadline was not feasible.
They said with barely seven days to the deadline, depositor banks still dispense old notes to customers (across counter and ATM Machines), which the operators in turn dispensed to customers.
An operator whose firm is called Neocaortex Motors Enterprise, Abuja, who pleaded anonymity said: “It has been difficult to get the new naira notes from the banks except from some ATM because the banks still pay old notes instead of new ones. It is also clear that the CBN is yet to release new notes to them.”
“Of course, customers complain about the old notes when you pay them, but it is not our fault as POS operators, it is what we have that we dispense. I don’t think the January 31st deadline is possible because the banks that are supposed to dispense the news notes are yet to comply,” she further said.
Another operator, Malam Muktar Musa, CEO Monie Point, Utako, wondered why it is only at the black market that one gets new notes, which according to him applies to several other POS tellers.
“It is as if the regulators were not ready before they churned out this policy because the old naira notes are still everywhere. That is what the banks still give us to pay our customers even as the customers complain we’re helpless. Across the counter in banking halls, you cannot access the required amount ‘unless you find the teller something.
“Some customers will ask for new naira notes and when you say you have only old notes, they go elsewhere and we lose money too,” Musa said.
Also, another operator based in Kado Estate of Abuja, Sulaiman Salman, lamented the many lies between the depositor banks and the CBN.
Salman, who said many customers had to leave because they were not ready to accept old notes, said some banks still issued out old notes as at Monday he went to withdraw.
He said: “Who is laying between CBN and the depositor banks? Somebody somewhere is certainly lying. I was at my bank in Gwarimpa yesterday (Monday) and what they gave me was old notes. In fact, they had already arranged and loaded the old notes in a particular place. When I asked them, they said new notes were not sufficient. If the CBN is not making enough of these new notes available, why lying to the public? And if available and the banks, for reasons known to them, are refusing to issue them, can’t there be monitoring and eventual sanction form the CBN? That’s why I said someone is lying somewhere.
“On the whole, the CBN must extend this deadline, the politicians are not the one suffering this, but we the common man. The naira swap in the villages by the CBN can’t work any wonder. Our best bet is to have an extension so that our businesses, particularly those of us who are small and middle scale business owners, don’t crumble.”
POS charges increase
In a related development, some POS operators in Bauchi have increased charges for transactions in the old banknotes.
A check by the News Agency of Nigeria in Bauchi Tuesday showed that POS increased deposit charges by about 50 per cent.
The operators are now charging between N150 and N200 for N5, 000 and N10,000 deposits as against N100, respectively, while others simply refused transactions in the old naira notes a few days before the Jan. 31 deadline.
A POS operator, Grace Simon, said she rejected the old naira because it was difficult for her to deposit it in the banks due to long queues of customers.
“There is a multitude of customers in the banks; you have to spend several hours on the queue to deposit the old naira notes.
“Honestly; I don’t have the strength, and that is why some of us increased charges for old naira notes.
“The charge for a transaction in the new banknotes still remains the same,” she said.
Another POS agent, Aliyu Babayo, said they rejected the old naira notes in view of the new cash withdrawal policy.
“You can only withdraw a limited amount of money on the counter which is not enough to meet daily transactions.
“And the queues in the banks to deposit the old notes are long and hectic, this explains the increase in the transaction charge,” he said.
Another sale agent, Dorcas Silas, said the redesigning of the naira negatively affected their operations, forcing some of them to close.
“With increased transaction charges in old naira notes, many customers would not patronize us, the situation is worrisome,” she said.
A trader, Musa Akuyam, said he refused to transact in the old currency to avoid counting losses.
“I rejected old naira notes because I couldn’t deposit the ones I have due to queues in the banks,” he said.
Reacting, Dr Abdulkadir Jibrin, Director Medical Services of the CBN, warned against rejecting the old naira notes before the deadline.
He said the apex bank had scaled up community sensitisation to create awareness on the redesigned naira notes.
He advised residents of the state to channel their complaints to the Consumer Protection Department, CPD, of the bank.
“We have channels, we have to sensitise and educate severally and we will continue to do that,” he said.
NGF raises concern
Also as part of its intervention, the Nigeria Governors’ Forum (NGF) had at the weekend set up a six-member committee to engage the CBN on the anomalies in the country’s monetary management and financial system, especially in the issuance of new Naira notes.
In its communique at the end of the meeting, the NGF Anambra state Governor Charles Soludo as the committee chair, while Governors Udom Emmanuel of Akwa Ibom, Dapo Abiodun(Ogun), Professor Umar Babagana Zulum (Borno), Simon Lalong (Plateau) and Mohammed Abubakar Badaru (Jigawa) serve as members.
The governors, who said they were not opposed to the objectives of the Naira redesign policy, however, said the CBN should consider the peculiarities of households and states.
No going back – CBN
But despite all entreaties, CBN Governor Godwin Emefiele insisted the deadline remains sacrosanct.
Emefiele made the position known Tuesday in Abuja while addressing journalists after the apex bank’s Monetary Policy Committee (MPC) meeting in Abuja.
Blueprint reported how CBN raised the Monetary Policy Rate (MPR), which measures interest rate, to 17.5 per cent as part of measures to contain inflation.
The apex bank’s committee also voted to keep the asymmetric corridor at +100 and -700 basis points around the MPR, Cash Reserve Ratio (CRR) at 32.5 per cent as well as the Liquidity Ratio at 30 per cent.
Speaking on the new notes, Emefiele claimed that kidnapping and ransom-taking incidents had reduced since the three banknotes were redesigned.
He also said the time given for the swap of the old naira notes with new ones was enough for Nigerians to get the new notes from commercial banks.
Emefiele said: “I must say here that unfortunately, I don’t have good news for those who feel that we should shift the deadline. My apologies.
“The reason is because 90 days, we feel it’s 100 days, should be enough for those who have the old currency to deposit it, the money, in the banks. And we took every measure to ensure that all the banks were open to receive all old currencies. 100 days, we believe, is more than adequate.”
Emefiele also dismissed claims that the CBN was holding N89 trillion Stamp Duty fund, clarifying that only N370. 386 billion was collected through Deposit Money Banks since the policy became effective 2016.