As a result of the hoarding of the naira, leading to 80 percent of the currency in circulation being outside the banking system, and a bid to move towards a cashless society, a redesign project for the N200 (KES 54.3), N500 (KES 135.7) and N1000 (KES 271.4) was announced on October 26, 2022, by Central Bank of Nigeria governor Godwin Emefiele, who encouraged that Nigerians deposit old notes in banks to allow them to withdraw newly redesigned bank notes, which were unveiled by President Muhammadu Buhari on November 23, 2022.
The deadline after which old naira notes would no longer remain as legal tender was announced as January 31, 2023. However, the deadline was moved to February 10 2023 as citizens of the cash-dependent were unable to find the new notes at banks and cash machines.
The Supreme Court of Nigeria suspended the February 10 deadline in order as a result of the legal intervention of Kaduna, Kogi, and Zamfara states due to the hardship suffered by residents of their states, through their Attorneys-General and will hear the suit on February 15, 2023.
Additionally, there are accusations of bank branches bearing some responsibility for the shortage with some bank branches accused of hoarding new notes and giving out old ones. However, in the face of cash crises, transactions made by mobile users recorded a 125% volume increase year-on-year to ₦2.37 trillion in January 2023 with transactions made on Nigeria Inter-Bank Settlement System.
With just 40% of Nigerians having access to bank accounts, combined with a 177% mobile-phone penetration, there is a massive opportunity for the expansion of mobile money in Nigeria during the current cash crunch.
This is being exploited by MTN Nigeria Communication, which is deploying 224,000 agents to encourage residents to open mobile wallets using the new currency.
As Nigerians sleep in queues outside banks in a bid to acquire new currency, there are incentives for citizens of Africa’s largest economy to switch to mobile money, a move that would fulfill the Central Bank of Nigeria’s desire to transition the West African country to a cashless society and provide an opportunity for mobile service providers.
Email your news TIPS to editor@thesharpdaily.com
