Naira Policy: Senate urges CBN to extend old banknotes deadline till June 30, 2023

*The Nigerian Senate seeks Central Bank of Nigeria’s extension of the January 31, 2023,  deadline for phase out of old N200, N500 and N1000 till June 30 next year over consumers’ inability to meet the Bank’s regulatory timeline in certain states

Isola Moses | ConsumerConnect

Sequel to the Bank’s recent redesign of some national currency denominations, the Nigerian Senate, in the National Assembly (NASS), Abuja, FCT, has sought the Central Bank of Nigeria’s (CBN) extension of the January 31, 2023,  deadline for phase out of old N200, N500 and N1000 to June 30 next year.

ConsumerConnect reports the Senate latest recommendation followed a motion by Senator Ali Ndume, representing representing Borno South.

Old N200, N500 and N1000 notes

Ndume reportedly, had raised the alarm over the January 31, 2023 deadline for discontinuation of the use of the said old banknotes as a legal tender in the West African country.

The Federal lawmaker noted the notice the CBN handed down is too short in view of the “few” banks in Borno and Yobe states.

He also mentioned the “inability” of consumers of financial products and services in these states to lodge the old notes in time to meet the regulatory deadline.

It is recalled Mr. Godwin Emefiele, Governor of CBN, October 26, 2022, had announced the redesign of the three Naira notes.

Emefiele stated that the new and existing currencies would remain legal tender and circulate together in the economy till January 31 next year.

The Bankers’ Bank announced the redesigned notes would limit cash in circulation, and therefore, restrict the deplorable activities of ransom-demanding kidnappers, politicians set on rigging the upcoming elections, and enhance the Naira value, among other benefits.

President Muhammadu Buhari later unveiled the redesigned Naira notes as proposed by the CBN late November.

It is noted that the development marked the first time in 19 years since  last currency redesign in Nigeria.

Emefiele as well announced there would be a heavy restriction on the volume of cash that consumers can withdraw Over the Counter (OTC), as it works with the Economic and Financial Crimes Commission (EFCC) to monitor the purpose of any heavy transactions.

According to him, the redesigned currency note  can never be counterfeited.

However, the CBN Chief stated to forestall such an occurrence, the Bank would redesign the notes after every five to eight years.

Economic concerns, by World Bank, others

Meanwhile, the World Bank has expressed concern over the economic impact of the recent Naira redesign on Nigerian households and businesses.

The global lender ina report said: “At present, households and firms already face elevated financial pressures from prolonged, high inflation, recently compounded by external food and fuel price shocks, and the severe floods, and phasing out existing naira notes over a short time period may add to their challenges.”

The Bank also stressed that the timing and short transition period of the Nigerian Naira redesign might weigh on economic activity in the country.