CBN Unsettles Political Parties, Actors, Criminals With New Naira Notes

• Anxiety reigns as Dec 15, 2022 commencement date beckons
• Concerns heighten over 2023 elections’ funding
• Hard times await kidnappers, bandits

BY EDMOND ODOK – Less than 48 hours after its announcement, anxiety and concerns are heightening over plans by the Central Bank of Nigeria (CBN) to deploy new Naira notes for monetary transactions effective December 15, 2022

Forefront findings indicate that CBN’s plans to phase out the existing N100, N200, N500, and N1,000 banknotes as acceptable medium of exchange for financial transactions in the country after January 31, 2023 deadline has suddenly caused a major worry for political parties and actors ahead of the 2023 general elections.

Strong indications have emerged that across board in the nation’s political space, it is certainly not the best of times for parties and their candidates whose financial war chests, already stacked up for the elections, now face serious rejigging challenge, though the apex bank explained that the move is part of its resolve to address emerging challenges of currencies’ counterfeiting in line with global best practices.

One of our competent sources, who pleaded anonymity, volunteered thus; “There is no denying the fact that this move by the CBN was totally unexpected by the political actors, their parties and sponsors. And its commencement date and deadline coming so close to 2023 polls could easily threw spanners into the works done ahead of the elections.

“More so, if only Nigerians have the slightest idea of how much money we have outside the banking system then they would appreciate that this very decision by CBN says a lot and should mean a lot to the country and its economy if properly implemented.

“Unfortunately, we are in a country where policies are only well thought out, and well designed but always poorly executed. My only concern here is about the amount that would be spent in redesigning and reprinting the notes, mindful of the fact that there are always trade offs, though.”

“But at least let there be a little ‘shakeup’ in the financial system already. I can imagine how many people lost their sleep and peace of mind on Wednesday night when the apex bank dropped the bombshell. Even the kidnappers and bandits would not be spared if truth be told.”

Articulating his thoughts around the CBN’s sudden announcement, a businessman cum politician, Umar Sadiq posited; “The level of impunity and criminality in the nation’s financial system has assumed a frightening dimension. And there is no perfect time to implement a policy whether good or bad, especially in Nigeria. CBN can only mop up what it has access to and that is money within the financial system. It can not get into people’s homes to mop up hundreds of billions of Naira stolen and hoarded there by many political actors for the purpose of prosecuting the 2023 general elections.”

Similarly, he said; “The development, from all indications, is also bad news for criminal elements like kidnappers, bandits and their perceived sponsors who have amassed so much money from their criminal activities. I can safely assumed that these characters didn’t see this coming and it should hit them at least as a blow below the belt.”

Also offering her perspective on the proposed new Naira notes, a financial expert, Ugochukwu Amalinze told Forefront that; “When one is talking about mopping up by CBN, how much Naira or dollars do you want the apex bank to mop up? Things have gone so awry that people can go to any length to fight any good policy that is not in their favour. These politicians do not bother about the man and woman on the streets. It is all about them and their enlightened self interest.

“The policy has a lot implications for politics and politicians, security, monetary policy, and corruption among other things. We’ve heard arguments around putting pressure on the forex black market and property market. However, these people will also have to pay with the same old notes, which will eventually end up in the banking system for exchange and questions can be asked.

“So, it clearly presents a win-win situation for the CBN and the government. There will be easy way out for many people. The only challenge seems to be around what many consider a skewed implementation of the policy where we may have sacred cows and the untouchables. But we shall see how things play out.”

While unveiling the new notes arrangement in Abuja on Wednesday, the CBN Governor, Mr Godwin Emefiele, disclosed that the apex bank has received President Muhammadu Buhari’s approval to redesign the bank notes with new features on them.

He said effective from December 15 this year, Nigerians in possession of the old notes should approach their banks for the new ones, explaining that recent development in photographic technology and advancements in printing devices have made counterfeiting of currencies relatively easier.

On the rationale for the move, Emefiele hinted that in recent times, the CBN has recorded significantly higher rates of counterfeiting, especially at the higher denominations of N500 and N1,000 banknotes.

According to him, there has also been significant hoarding of banknotes by members of the public, with statistics showing that over 80 per cent of currency in circulation are outside the vaults of commercial banks.

Further explaining reasons behind the new policy, Emefiele said it meant to address worsening shortage of clean and fit banknotes with attendant negative perception of the CBN and increased risk to financial stability; increasing ease and risk of counterfeiting evidenced by several security reports.

He said, “Although global best practice is for central banks to redesign, produce and circulate new local legal tender every 5 to 8 years, the Naira has not been redesigned in the last 20 years.

“On the basis of these trends, problems, and facts, and in line with Sections 19, Subsections a and b of the CBN Act 2007, the Management of the CBN sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N100, N200, N500, and N1,000 levels.

“In line with this approval, we have finalized arrangements for the new currency to begin circulation from December 15, 2022.

“The new and existing currencies shall remain legal tender and circulate together until January 31, 2023 when the existing currencies shall seize to be legal tender.

“Accordingly, all Deposit Money Banks currently holding the existing denominations of the currency may begin returning these notes back to the CBN effective immediately. The newly designed currency will be released to the banks in the order of First-come-First-serve basis.

“Customers of banks are enjoined to begin paying into their bank accounts the existing currency to enable them withdraw the new banknotes once circulation begins in mid-December 2022.”

However, the CBN Governor warned the public against rejecting the current notes as a means of exchange for purchase of goods and services as they remain legal tender until next year’s January ending.

Assuring Nigerians of CBN’s good intentions always, Emefiele said; “We would like to use this opportunity to reassure the general public that the CBN would continue to monitor both the financial system in particular, and the economy in general, and always act in good faith for the achievement of the Bank’s objectives and the betterment of the country”