• Hits hard currency hoarders
• Report puts naira now in circulation at N2.7 trillion
From Uche Usim, Abuja
Naira hoarders and unscrupulous bankers are in pain.
They were plotting to make a kill during the Yuletide by starving Nigerians with currency scarcity when the Central Bank of Nigeria (CBN) scuttled their plan last Tuesday.
The apex bank announced that the old and redesigned notes would operate together ad infinitum and ordered commercial banks to accept and issue the new and old notes.
Checks by Sunday Sun revealed that some bureau de change operators, commercial bank officials and anxious depositors are the greatest culprits of hoarding and the forces behind the recent naira scarcity imbroglio in some northern states.
Before Tuesday’s statement, the CBN, through its Spokesman, Dr Isa Abudulmumin, repeatedly assured the public of sufficient cash to buoy the economy.
But the money-grubbers were banking on the December 31 sunset date for the old naira notes and began mopping up the new N1,000, N500 and N200 notes in readiness for a future “auction and profiteering”.
Already, people in Kano, Jigawa and other states are reportedly wailing over paucity of cash for commercial activities.
These are also jurisdictions where financial illiteracy is blocking digital banking from taking root because they prefer physical cash to electronic transactions.
Many of these suburban dwellers, haunted by the ghost of the naira redesign era, have been stockpiling cash in anticipation that naira will be scarce in December.
Sources in some Deposit Money Banks (DMBs) told Sunday Sun that many of those living in rural communities only withdraw cash from banks and have not been making lodgements, thus stifling their local commercial space.
The CBN corroborated this by saying that: “The seeming cash scarcity in some locations is due largely to high volume withdrawals from the CBN branches by Deposit Money Banks (DMBs) and panic withdrawals by customers from the Automated Teller Machines, ATMs).
“While we note the concerns of Nigerians on the availability of cash for financial transactions, we wish to assure the public that there is sufficient stock of currency notes for economic activities in the country. The branches of the CBN across the country are also working to ensure the seamless circulation of cash in their respective states of operation.”
Players in the finance circles said that there should be aggressive sensitisation on cash sufficiency, just as banks are expected to ensure that cash gets to all nooks and crannies of the country to avoid unnecessarily overheating of the polity through panic withdrawals.
“However, any bank caught sabotaging CBN’s efforts to ensure cash is well circulated across the country should be severely sanctioned.
“There is no need for panic withdrawals. There is sufficient cash. No more December 31 deadline.
But more importantly, we encourage depositors to use other electronic banking platforms. They’re faster, safer, cheaper and more convenient”, a bank manager said.
Experts insisted that the artificial naira scarcity reportedly witnessed in some states came as a surprise because a CBN’s report in September showed that the currency in circulation (CIC) swelled to N2.7 trillion as at the end of August, showing a remarkable recovery from a slump of N982.1 billion in February, owing to the naira redesign policy.
Abudulmumin also asked the public to make use of alternative banking channels for transactions, but analysts disclosed that dubious influential Nigerians dread electronic banking because they leave digital footprints that could be used to nail them if investigations were to be conducted.
“So, they prefer cash. Imagine buying a house of N300 million and you pay cash. They’re the ones retarding the momentum of digitization of the banking sector. “They prefer to stash millions and billions of naira in wardrobes, underground tanks and other places for mostly illicit transactions, than use digital banking channels. They’re mainly the ones mopping up the cash. That was exactly what played out during the naira redesign policy last year where some banks were caught with new notes that were stashed away while their ATMs were empty as people queued in vain.
“This addiction to cash is part of the problems in tackling terrorism, kidnapping and and other crimes.
“But with this move by the CBN, we expect a drastic reduction in the excessive demand for cash withdrawals”, a commercial bank source confided in Sunday Sun.
Analysts are of the opinion that the economic saboteurs wanted to replicate the 2022 hellish naira redesign experience where some bank staff, in connivance with other criminals, hoarded the new notes and almost grounded the economy.
Then, ATMs, bank counters and PoS operators were starved of cash and people had to “buy” the naira with naira at exorbitant rates to survive.
Nonetheless, the Director General, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, while appreciating the CBN for allowing the old and redesigned naira notes operate ad infinitum, said the conversations on junking old notes should never be resurrected because there was really no compelling argument to redesign the naira notes in the first place.
He, however, noted that the momentum for the cashless economy should be sustained without resorting to the crude methodology of cash confiscation adopted by the previous dispensation in the CBN.
“The approach was very disruptive and inflicted unbearable hardships on businesses and the citizens”, he said.