Nigeria’s central bank races against time to avoid currency crisis
The Central Bank of Nigeria (CBN) is scrambling to announce an extension to the deadline for the withdrawal of old naira notes, as it races to avoid a currency circulation crisis and secure the distribution of redesigned naira notes.
In a bid to beat its January 31st deadline, the CBN has taken unconventional measures.
The latest move, announced on January 23, allows citizens to exchange old notes for redesigned ones, bypassing the traditional banking system. The move may also give point-of-sale operators a bigger role in facilitating the process.
Despite the CBN’s efforts, many Nigerians still hold old notes, and are now facing a choice between spending them quickly or swapping them for new notes.
This has led to concerns that the late sensitization exercise, which was carried out by CBN directors, is a case of putting the cart before the horse.
Analysts argue that the appropriate government agencies should have embarked on the sensitization exercise much earlier, and not left the responsibility to CBN directors.
Samuel Ugwu, a social affairs analyst, has stated that the CBN has apparently foreseen that the time left to complete the exercise is not much, and has thus embarked on a fire-brigade approach to the problem.
The CBN will have little time left to decide whether to announce an extension of the deadline, or risk a currency circulation crisis.
