The former Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, said on Monday, 30, January 2023, that the two months timeframe for the old Naira to cease being a legal tender is too short considering some factors.
Dr Yusuf explained during a Twitter space, titled, ‘CBN Deadline For Old Naira Notes – The Real Issues’ organised by Prime Business Africa, that if the Bank of England could give citizens of the United Kingdom (UK) two years to transition from old to new currencies despite their advanced technology and economy, the Central Bank of Nigeria (CBN) is wrong to think it’s possible to achieve the feat in two months.
Backing up his statement, Yusuf, who is also the founder of the Centre for the Promotion of Private Enterprise (CPPE), cited several challenges such as the high level of rural areas in Nigeria and 30 million Nigerians with no bank accounts.
According to the economist, these are some of the bottlenecks that make the transition impossible within two months, considering some commercial banks were still handing out old Naira notes days before the deadline set for 31, January 2023.
Recall that Prime Business Africa had reported that the deadline was extended to 10, February 2023, by the central bank on Sunday, 30, January 2023.
This is despite the CBN Governor, Godwin Emefiele, insisting last week that the deadline will not be extended beyond 31, January 2023, two months after announcing that the apex bank would redesign the Naira notes.
Yusuf said aside from the rural population and millions of unbanked Nigerians, the country also has to deal with its huge informal economy which deals with significant cash daily.
He stressed that if the UK doesn’t have the number of challenges that Nigeria possesses, yet the country’s financial regulator thought it wise to make its transition two years, then Nigeria needs at least six months in order not to disrupt the economy.
What Dr Yusuf said
“The Naira redesign has a negative impact because of the way we have approached it. First, we talk of the timeline, here is a country with huge rural population, here is a country with a large population of people who are not literate, we have very huge informal economy, we have 30 million people who have no bank accounts.
“And our currency is also the dominant currency in the ECOWAS subregion. So if we look at all these critical factors, it beholds on us to give enough time for this kind of transition to take place, in order not to disrupt economic activities, and in order not to create undue chaos in the economy.
“Now we are a population of 200 million people, and we have an economy that has these kinds of characteristics. In order not to disrupt things, we normally should have given minimum of six months,” the economist said.
Explaining further, Dr Yusuf stated: “And I must say that even in advanced economies, only recently, UK did a conversion from paper to polymer notes for only two of their currency denominations, 20 Pound and 50 Pound, and they did it over two years, just to avoid disruption to their systems,
“Here we are, we are not as developed as UK, we don’t have the kind of infrastructure that they have, they don’t have the kind of informal economy that we have, they don’t have the level of illiteracy that we have, they don’t have the kind of rural population that we have.
“If in that kind of jurisdiction, they are giving two years, here we are giving less than two months, and even in practice, what we are doing is less than a month, cause even few days to this deadline, the banks were still issuing old notes, and we can see the pandemonium all over the place.”
Meanwhile, the economist had also disclosed that the old Naira deadline is disrupting Ecowas regional trade.