CBN Extends Old Naira Notes Deadline till February 10, 2023

The deadline for the swapping of old naira notes with the newly designed notes has been extended from January 31, 2023, to February 10, 2023.

Prior to this, the apex bank released the redesigned notes on Thursday, December 15, 2022. However, the notes were yet to get fully in circulation.

As a result, a press release was issued on Sunday, January 29, 2023. It included CBN governor, Godwin Emefiele’s announcement that there will be “a 10-day extension of the deadline from January 31, 2023, to February 10, 2023, to allow for the collection of more old notes.”

Godwin Emefiele also noted that Nigerians would still be allowed to deposit their old notes directly with the CBN for exchange until February 17, 2023. He described it as a “grace period.”

The country had been swallowed in a frenzy because of the previous deadline for the swapping of the old notes as the new notes were still very scarce in circulation.

While he was speaking about the extension of the deadline, the CBN governor said:

“Based on the foregoing, we have sought and obtained Mr President’s approval for the following: a 10-day extension of the deadline from January 31, 2023, to February 10, 2023; to allow for the collection of more old notes legitimately held by Nigerians and achieve more success in cash swap in our rural communities, after which all old notes outside the CBN loses their Legal Tender Status.

Our CBN staff currently on mass mobilization and monitoring together with officials of the Economic and Financial Crimes Commission and the Independent Corrupt Practices and other Related Offences Commission will work together to achieve these objectives.

A seven-day grace period, beginning from February 10 to February 17, 2023, in compliance with Sections 20(3) and 22 of the CBN Act, allowing Nigerians to deposit their old notes at the CBN after the February deadline when the old currency would have lost its Legal Tender status.”

Meanwhile, the CBN had already issued a policy on December 21, 2022, that the maximum weekly cash withdrawal limit for individuals and corporate organizations across all channels will be N500,000 and N5,000,000 respectively, starting January 9, 2023.

Here are some of the reasons why CBN decided to release the redesigned N200, N500, and N1,000 notes.

Reasons for Redesigning the Old Naira Notes

1. Currency Management

Mr Godwin Emefiele complained about issues with managing the old series of bank notes that are in circulation. Especially the ones outside Nigeria’s banking system.

According to him, currency management is a vital function of the Central Bank of Nigeria (Section 2 (b) of the CBN Act 2007). However, they have been experiencing increasing struggles recently.

2. Hoarding of Banknotes

CBN governor, Godwin Emefiele also complained that members of the public have been hoarding bank notes and it was one of the reasons why the CBN decided to produce the new notes.

According to him, statistics show that over 80% of the currency in circulation is outside commercial banks’ vaults.

3. Unappealing Notes in Circulation

Another challenge the CBN wanted to tackle was the issue of unappealing notes in circulation. There were too many unkempt notes passing around and it was ruining the apex bank’s image.

Not to mention the increase in the rate of financial instability that using those types of notes would result in.

4. Increase in Fake Notes

The CBN believes the old naira notes were easy to forge and it would lead to an increase of fake notes in circulation.

“For recent years, the CBN has recorded significantly higher rates of counterfeits, especially for the higher denominations of N500 and N1,000 banknotes,” Emefiele said.

He also went further to add that if we are to follow the global best practice, central banks are supposed to redesign, produce, and circulate new currency every 5 to 8 years, but the Central Bank of Nigeria has not redesigned naira notes in the past twenty years.

Meanwhile, the CBN recently announced that since they started distributing the new naira notes, they have achieved a success rate of over 75% of the N2.7 trillion that was lost outside the banking system.

Will the new naira notes bring about financial stability like the CBN believes or did we waste billions on this project? Only time will tell.

All images are sourced from twitter.com