No Cash to Withdraw: 5 Things CBN Policy Says About Nigeria

The Central Bank of Nigeria (CBN) introduced the naira redesign policy to control the naira in circulation, manage inflation, and combat counterfeiting and ransom payments. The policy brought untold hardship on Nigerians as they could not get cash to withdraw for daily transactions.

The CBN policy which was lauded by some individuals as a positive step towards improving the country’s economic stability also revealed certain inconsistencies embedded in the nation’s implementation of policy. The apex bank had earlier given a January 31 deadline for the currency swap which was extended to February 10 after a national outcry. Despite the extension, Nigerians were still unable to meet the deadline. Their complaints and reactions were further amplified by some governors who took the CBN’s policy to the Supreme Court. The apex court temporarily halted the move by the Federal Government through the Central Bank of Nigeria to ban the use of the old naira notes from February 10, 2023, and subsequently extended the validity of old naira notes till December. The ruling which was gladly received by a lot of Nigerians was not immediately acted upon by the federal government. All of these reveal various things about Nigeria. Let’s take a look.

Lack of synergy among governing bodies

After the Supreme court’s ruling, Nigerians still struggled to get cash. This was because the CBN failed to release a statement after the judgment. While state governments released circulars that banks should collect and release old naira notes, the federal government was silent about the development. This silence threw Nigerians into confusion as those who had collected the old naira notes couldn’t spend the money on anything, because the money was still being largely rejected.

The action of President Buhari and the CBN on the ruling showed the disparity in the nation’s governance. It also highlights the importance of synergy in governance. The silence of the CBN and its refusal to release old naira notes as reported by some banks shows the loophole in governance.

No regard for the effect of policies on the average Nigerian 

The CBN policy also revealed that the governing bodies had little or no respect for the average Nigerian. According to the apex bank, new naira notes were to be released as Nigerians turned in their old notes. But as Nigerians obediently deposited their old notes they couldn’t get new naira notes to withdraw. Bank ATMs were left without cash and Nigerians struggled to access their hard-earned money. 

Despite the hardship brought on by the cash crunch, the CBN and the President focused on the benefits of the policy rather than the plight of the average Nigerian. 

Bad timing in policy implementation 

The apex bank introduced this policy some months before the 2023 general elections. The policy which was described by partisans as a target against politicians who partook in vote buying also came at a time when Nigerians struggled with fuel scarcity and a worsening inflation rate.

The wrong timing was also evident in the way the fragile foreign exchange market was plunged into disarray as the naira suffered serious depreciation in the parallel market. 

Nigerian banks need to improve their internet services 

As Nigerians struggled to access their cash, a lot of them moved to internet banking. They got involved in online transactions for almost everything, from transportation to shopping for food ingredients in the market. 

The switch to online transactions was accompanied by several issues as bank networks struggled to process the numerous transactions. Nigerians complained of inability to transfer or receive money, debit alert inconsistencies, and network issues. All of these showed that the Nigerian banking sector has a lot of work to do if the nation is going to embrace the cashless policy pushed forward by the apex bank.

Low financial inclusion

Another thing that the CBN policy revealed about Nigeria is that a lot of Nigerians are unbanked. Governor of Kaduna, Nasiru El Rufai complained about how farmers struggled to sell their products because of the unavailability of cash. 

Most of these farmers, traders, and transporters do not have bank accounts. They don’t even know how to transfer money or receive money. This shows that the apex bank needs to intensify sensitization in both rural and urban locations to boost financial inclusion.