Uduegbunam Chukwujama
The new Naira policy of the Central Bank of Nigeria (CBN) has soaked-in at least N1.6 trillion in January currency mop-up alone, data from the apex bank indicates.
The CBN had, in the last quarter of 2022, introduced new policy to redesign Nigeria’s currency and limit the cash in circulation with a view to curbing inflation, terrorism and vote buying as the country prepares a for critical general election.
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The policy ‘decreed’ redesign of higher denominations of the currency notes – N200, N500 and N1000 – and gave a three-month window for Nigerians to return old notes in what would have meant a swap if not for the accompanying daily withdrawal limits.
It gave an initial deadline of January 31 for return of the affected notes, a date that was later extended to February 10, following pressure from politicians and other Nigerians, who could not access enough cash for transactions, especially at the informal level.
The aggressive policy of phasing out old N200, N500 and N1000 notes and introducing limited new notes into circulation saw the apex bank mop up N1.6 trillion in January alone, according to data obtained from the CBN website.
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The ongoing implementation means that the Naira in circulation, according to CBN numbers, fell to as low as N1. 39 trillion in January 2023 – the lowest level in seven years, since December 2015.
When weighed against the N301 trillion in the previous month (December 2022), currency in circulation specifically fell by 54% in January 2023.
Recall that the apex bank had cried out over the quantity of currency – N2-56 trillion- which it said was outside banks’ vaults in December 2022. But the new number, according to the central bank, is now N788.92 billion.
This means that that a huge amount of old Naira notes were actually deposited by Nigerians as they struggled to beat the initial January 31 deadline for return of old notes. This, no doubt, contributed to the decline in the amount of currency outside the bank.
