“…Was it all as a result of the introduction of the new design or the fact that there are simply not enough new notes to go around?…”
On Wednesday 23rd of November 2022, the president of the Federal Republic of Nigeria introduced the new design of the Two Hundred Naira, Five Hundred Naira, and One Thousand Naira notes to the citizens and as is the fashion, many people had a lot to say about it.
The introduction of the new design meant it was time to say goodbye to the old design. Interestingly, there was a commendable intention behind the redesign of the naira note, and the intention was to curb excessive currency hoarding. It was also a move to mop up the excess cash in circulation as over 80% of our country’s cash reserve was in the system.
The move seems unnecessary to many Nigerians as it seems like there was not much redesigning done, but rather a play with colours, and this is exactly what has led to the citizens’ diminished faith in the newly refurbished currency.
The Genesis of The Shortage.
The introduction of the newly redesigned currency was quickly followed by a rather absurd policy. The policy instructed that all old currency notes be deposited in commercial banks by the 31st of January, 2023.
The Central bank instructed that the old notes would no longer be recognized as legal tender from said 31st of January, 2023. This gave the citizens roughly 12 weeks to get their old currency swapped for the newer ones.
This has led to a scarcity of money which made the country look almost cashless. Was it all as a result of the introduction of the new design or the fact that there are not enough new notes to go around?
Wednesday just past marked the beginning of the very worst of our country’s woes as the citizens had never had it this bad before. It was clear to see there was not sufficient cash to go around.
Even the financial institutions which are supposed to be the ‘go-to’ for obtaining liquidity, seemed to be experiencing the same shortage as the average man on the streets. Some banks’ networks were nothing to write home about as customers could neither transfer nor withdraw funds.
The situation got so bad on Thursday, February 2, 2023, when POS (Point Of Service) operators began to charge exorbitant fees for transfers and withdrawals and it made began to seem like people were buying their currency back.
Many joked that the Naira had quickly gotten a parallel market against itself. The Naira was now more scarce than the rather elusive American Dollar.
Whatever deity is the custodian of good luck would have to be walking by anyone who got the chance to find a POS station that had cash to give out at all, even at the new exorbitant rates.
The situation is quite hilarious when one reads about it online, but the reality is that was and still is scary to imagine lacking liquid cash in the occurrence of any emergencies.
The whole situation would not be as terrifying if online transfers were accepted anywhere and by anyone, but it would be laughable to offer to transfer Two Hundred Naira to a bike rider or worse, a Lagos danfo driver.
The Effect of Naira Shortage
The currency shortage has negatively impacted businesses with small business owners bearing the brunt of the effects of this scarcity. Businesses have been slow since customers do not have enough disposable cash to patronize them.
Avoiding going out has become a priority on people’s daily prayer lists as individuals keenly avoid being served “breakfast” by their banks. On the bright side, the Naira scarcity makes for a great conversation starter. A win is a win.