In 2022, Nigeria faced a significant controversy when the Central Bank of Nigeria (CBN), led by then-Governor Godwin Emefiele, announced plans to redesign and introduce new versions of the N200, N500, and N1000 banknotes.
These existing notes were to remain valid until January 31, 2023, sparking widespread debate across the country.
Emefiele justified the decision due to concerns about the amount of naira notes outside the banking system. However, over a year later, checks by SaharaReporters reveal that the policy, which reportedly cost over N74 billion, has failed.
Point of Sale machine vendors are lamenting cash shortages. Data shows that in January 2024, currency in circulation was 3.65 million notes, with 3.28 million (89%) outside banks. By February, the numbers rose to 3.69 million in circulation and 3.41 million (92%) outside banks. In March, it reached 3.86 million in circulation and 3.62 million (93%) outside banks.
By April 2024, there were 3.92 million notes in circulation, with 3.60 million outside banks. In May, 3.96 million notes were in circulation, with 3.7 million (93.4%) outside banks.
Comparatively, in October 2022, when the policy was announced, 84% of the naira was outside banks, rising to 93.4% by April 2024. This marks an increase of 9.4 percentage points in the proportion of currency outside commercial banks' vaults over 18 months.
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