No cash, The new chorus of birds
The new line being chanted by both young and old is the “no cash” chorus; even those who do not have a #10 on their balance join in. Every day, banks are stuffed to the gills with “cashfull” guys who are in a “cashless” situation perhaps after bank security has informed them that there is no cash, but who still wait for three to four hours for the ATM to release some cash.
Due to their dissatisfaction with the CBN policy, people have been seen in recordings stripping off in front of Nigeria’s largest banks. Even for the most lesser causations, so many Nigerians battle daily in bank lines, when acquiring cash is not assured.
All of these are a result of the Central Bank of Nigeria’s (CBN) policy decision to redesign the N200, N500, and N1,000 denominations on October 26, 2022. Subsequent announcements, such as the cash withdrawal limit, have continued to elicit reactions from Nigerians.
However, it is anticipated that more bank clients will take advantage of the opportunity to return all of their old banknotes now that President Muhammadu Buhari has approved a 10-day extension of the expiration date of the old naira notes from January 31, 2023, to February 10, 2023.
Even though this policy may only last a short while, it has had a variety of effects on me as a student at Lagos State University who was cashless even before the no cash chorus event. First, keep in mind that almost all local banks do not offer cash withdrawals and that using a POS system is rather expensive. Because the new naira note is so scarce, I could understand this to indicate that it is equivalent to selling money to obtain money.
Considering the timing of the policies – being an election year – some Nigerians, particularly politicians, might have the erroneous belief that the apex bank’s move was targeted against certain individuals and have refused to see beyond their noses that the actions are in the best interest of Nigerians and the economy of the country.
The availability of the new naira note, which is relatively scarce because Section 2(b) of the CBN Act 2007 vests the function of currency management exclusively on the CBN, should have been of greater concern to CBN Governor Emefiele, who can be said to have acted in good faith toward the achievement of the bank’s objectives and the betterment of the country. Due to the new Naira note’s rarity, I personally have never used one. It has frequently been displayed on different newspaper pages and other internet sources, as I have observed.
Moreover, there is a chain of perceived benefits for the new CBN policy. The adoption of cashless economy may include reduction in corruption and the cost of services by banks (such as cost of credit), increased operational efficiency, improved financial inclusion, it must address the current gale of insecurity and economic sabotage, reduction in the circulation of fake currency, theft of cash from individuals, money laundering, and stockpiling of cash in houses by corrupt government officials.
The CBN measures do, however, carry some dangers. Now that personal data and information are stored online, it is getting harder to stop internet hackers and criminals. Other drawbacks include an increase in cybercrimes with a wide range of hackers operating with greater sophistication.
Even while I think the CBN’s actions were intended to advance the nation’s cashless financial system, it is important to realise that full adoption of such a strategy at this time may not produce the desired benefits. Before establishing any policies about cashless transactions, the apex bank administration should first concentrate on the internet infrastructure and individuals’ awareness and orientation. Such a policy can be implemented and be successful when there is reasonable reliability in the internet connection and well-oriented citizens.
In order to secure widespread use of the new banknotes, the CBN must act quickly to diffuse this tense situation and work with the other financial institutions. The average Nigerian already has a lot going on; the current economic crisis is unwarranted and preventable. The CBN should also permit the old notes and the new ones to coexist as legal money for a longer period of time in the interest of market merchants and small business owners, who are in fact the engine of our economy.
• Mr. Olomu is student in the Faculty of law, Lagos State University.