Since the past week, Nigeria has gone through an unprecedented scarcity of cash. Naira notes are in high demand after many citizens cashed in their remains of the old currency as required by the Central Bank of Nigeria (CBN). On October 22nd last year, the governor of the apex financial institution Mr. Godwin Emefiele announced the change into new currencies of the three highest denominations of the Naira N200, N500 and N1000.  

In his speech, Emefiele suggested that the currency faced challenges which affected the CBN and the country. Among other factors, he mentioned the hoarding of banknotes by the public, the shortage of clean and fit banknotes, the risk of counterfeit currencies and, most pertinently, the global convention of central banks redesigning the currency after windows of five to eight years. The Naira hasn’t been redesigned for twenty years, he mentioned, and indeed, on paper the motivations seemed true enough. With elections looming, Nigerians also saw the change as a means to curb malpractices—vote-buying especially—that are made necessary with money that might have been put away. 

The window for phasing out old currencies and using new ones wasn’t exactly satisfactory for Nigerians. According to Emefiele, the new currency was to begin circulating from December 15th, 2022, but in actuality days into the new year very few states had achieved widespread circulation. In urban areas across the country there were sparse sightings of the notes, but even then they seemed exotic, occasionally seen for sale in public places. By the middle of January, it was becoming increasingly clear that the 31st deadline for the legitimacy of old notes was not going to work. As the date pulled closer, a creeping sense of anxiety and FOMO dawned on the country, resulting in a last-minute rush for Naira notes.

The cash scarcity isn’t a standalone consequence of the current administration in CBN. Since becoming the governor in 2014, the Naira has recorded 70% value loss, according to Nairametrics. The current policies on forex and the dual exchange system has resulted in the consistent free-fall of the Naira against the dollar, which at some point last year rose to almost N800 per dollar. With a drop in the overstressed crude oil industry and reduction in foreign investments, Nigeria’s economy has sunk without much of a struggle, with many concerned citizens calling for Emefiele’s sack. 

The recent cash scarcity is particularly jarring given that there could have been better planning. For one, a country of our size with millions of citizens shouldn’t rush to make statement decisions without weighing the complete scope of consequences they might have, across the different social classes. So far, the situation has been nothing short of excruciating and mentally draining, with several reported happenings painting the image of a frustrated country on the brink of further demise. On social media, reports have circulated about banks and ATMs which completely lacked in providing the new currency, even as the CBN claims they made them available. With sightings of the new currency being sprayed in flamboyant parties, there’s been wider outrage from the citizenry who believe it’s another one of such Nigerian policies which cripples largely the lifestyle of its working class demography. 

Every crisis in this country tends to reveal that we are made of the same fabric as our leaders. From the bankers who withhold new notes, down through gas station racketeers, to POS operators, we are all just waiting for our chances to partake in the corruption we always revile.

— Gimba Kakanda (@gimbakakanda) February 3, 2023

In recent years the Point of Sale (POS) machines have been widely adopted by Nigerians as an alternative means of payment and withdrawals. Avoiding the stress of frequenting traditional banks and ATM queues has proven valuable to bank customers, but in the new reality of cash scarcity even POS payments haven’t been exempt. Agents in several parts of the country are hiking prices, with most centres charging 10% of the money being withdrawn; this means N1000 would be service charge for N10,000, when it previously used to be just N200. 

Nigerians have complained against the regulation methods of CBN, while faulting the absence of values such as trustworthiness and discipline in the national character. Backdoor deals are believed to be orchestrated by financial workers and select middlemen and elites, with new currency going one way and an excess of the old going the other. Meanwhile, in bank halls and outside the buildings, people are frustrated by the inability of banks to pay over the counter. In one video currently making the rounds on social media, a woman bemoaned that she hadn’t fed her children for two consecutive mornings, which is something many around the country will relate to, considering the sinking spending power. 

Although Emefiele announced the postponement of the activity on the 29th of January, the situation as we see it has failed to improve. “Our aim,” he wrote in a press release announcing February 10th as the new deadline, “is mainly to make our Monetary Policy Decisions more efficacious and like you can see; we’ve started to see inflation trending downwards and exchange rates relatively stable. Secondly, we aim to support the efforts of our security agencies in combating banditry and ransom taking in Nigeria through this program and we can see that the Military are making good progress in this important task in Nigeria.” 

The entire Nigerian financial system has come to a standstill. The fact that no one thought of stress testing the payment infra before deciding to go cashless on day one confuses me. Businesses (including us) are losing money because customers can’t spend their money. Madness!!!

— Gregory Rockson (@Rockson2) February 2, 2023

Quite obviously, the country’s leaders are lacking the nuance and empathy Nigeria requires. The incumbent Nigerian President Buhari shared the plight of Nigerians in a recent set of tweets, stating that his government was doing everything in its power to bring an end to the scarcity, with significant improvements slated on or before February 10. However for many Nigerians, the fact that very few of the CBN’s motivations have measurable goals, these smoke screen of decisions fail to make any visible difference to the economy. 

The latest update from the CBN came on February 2nd, in a statement signed by its Director of Corporate Communications Osita Nwanisobi. Confirming its knowledge of all the pertinent issues this piece has highlighted, from the “persons who sell the newly redesigned bank notes and those who flagrantly abuse the naira by hurling wads of Naira notes in the air” to the “upward trend in the cases of unregistered people and non-bank officials swapping banknotes for members of the public”. Instead of taking active decisions, the CBN went on to “state” that such actions were unlawful and perpetrators risked fines and imprisonment. 

Yet the Nigerian will find no joy in these statements. The streets remain as angry as ever, with only some days between now and the new deadline date. From the look of things, it would take a really effective administration of laws and policies to flush the corruption that has stained this national action most citizens initially accepted. Already protests against what seems to be a deliberate scarcity has begun: in the Ibadan city of southwestern Nigeria, the atmosphere is described as hostile and riotous. Banks and small businesses have closed up, crippling the economy of the state (as in many other places) and leaving citizens hungry. 

This is a developing story and we will regularly update this articles with updates.

Ongoing protest at Iwo Road, Ibadan.
Major roads are blocked, people are complaining about the current situation. pic.twitter.com/yJ7YvHiYc7

— Ibadan Community (@Ibadantwitta_) February 3, 2023