The Naira crisis in Nigeria has worsened as the amount of currency-in-circulation in the economy has dropped from N3.3 trillion to N1.54 trillion, as revealed by documents from the Central Bank of Nigeria.
The shortage of new naira notes and the scarcity of old currency have caused hardships for millions of Nigerians.
The latest report from the central bank showed that the currency-in-circulation fell by 53.33% within three months, specifically from N3.3Trillion in October 2022 to N1.54Trillion in January 2023.
This decrease in C-in-C was due to bank customers depositing old N1000, N500, and N200 notes before the CBN’s deadline on February 10, 2023.
The CBN Governor, Godwin Emefiele, stated that one of the objectives of the naira redesign policy was to remove currency outside the bank vaults, which totalled N2.7Trillion.
The latest data was presented by the CBN Deputy Governor, Folashodun Shonubi, at a forum in Abuja. Some state governments have filed a suit against the Federal Government seeking a restraining order to stop the full implementation of the naira redesign policy of the CBN.
Nine states have filed to join the suit, and the Supreme Court adjourned a hearing in the case to February 22, 2023. In the meantime, pending the hearing of the suit, the order suspending the February 10 deadline for the phasing out of old notes remains in effect.
President Muhammadu Buhari directed that the old N500 and N1000 banknotes were no longer legal tender in the country, and appealed to Nigerians to deposit their old N500 and 1000 notes with the CBN.
According to the CBN governor, this was targeted at controlling currency in circulation, curbing counterfeit currency and ransom payments to kidnappers and terrorists.
He noted, “Indeed, the integrity of a local legal tender, the efficiency of its supply and its efficacy in the conduct of monetary policy are some of the hallmarks of a great central bank.
“In recent times, however, currency management has faced several daunting challenges that have continued to grow in scale and sophistication with attendant and unintended consequences for the integrity of both the CBN and the country.”
However, traders and transporters in several states are insisting on collecting only new naira notes and old N200 notes, contrary to the directives by some state governors to continue spending the old notes in line with an order of the Supreme Court.