The turbulent tale of a currency

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 Olukayode Somuyiwa and Toyibat  Salimon

 The Central Bank of Nigeria (CBN) during the immediate past administration of President Muhammadu Buhari unveiled plan to redesign 200, 500 and 1000 naira notes to tackle inflation, curbing insecurity and most especially to discourage vote buying ahead of the 2023 general elections. The policy which some analysts adjudged to be long overdue and apt created an artificial scarcity of the legal tender in the country. Today the story remains unfinished, leaving citizens grappling with uncertainty and wondering what the future holds for their beloved currency.

Recently, the cash crunch which Nigerians believe was over resurfaced when the new notes remain unfound in the society as the new note trickled out slowly, while old ones seemingly vanished from circulation. Automated Teller Machines (ATMs) spat out outdated notes, businesses hesitated to accept them, and panic buying fueled a cash crunch. Long queues and desperate pleas became the face of the naira crisis, most commercial bank paying their customer as little as five thousand naira per day while some cannot even pay a dime.

Legal battles added further drama when some State governors challenged the deadline for the phasing out of old notes, and the Supreme Court weighed in, temporarily suspending the deadline and throwing the financial system into disarray. Amidst the chaos, President Muhammadu Buhari (the former president of Nigeria), when he was still in office, intervened and order that   the old #200 note coexist with the new one for a temporary period of time.

Today, the saga continues, while the dust has settled somewhat, confusion persists. Old #500 and #1,000 notes are still been spent in the country and it remains demonetized, creating friction in daily transactions. Some businesses and organizations still reject them, leaving many Nigerians wondering whether their hard-earned cash is now worthless.

The far-reaching effect of the draconian policy of the Apex Bank is that it has forced many businesses to fold up, informal sector face disruption, and ordinary citizens bear the burnt of the uncertainty.

At this moment, the issue of old and new notes have not been making cash flow seamless which is making POS operators to overcharge customers who patronize them. The current state of naira note (old and new) is still sketchy as it has not been attended to by the present government.

Looking ahead, questions remain: Will the remaining old notes be reintroduced? How will CBN address the persistent trust deficit? Can a seamless transition to the new note be achieved without leaving millions behind? These are a million-question begging for answers.

The answers lie in the hands of policymakers. A transparent and inclusive approach, alongside effective communication and adequate new note availability, are essential to restore the faith in the naira and navigate Nigeria’s complex financial landscape.

 

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