The Central Bank of Nigeria (CBN) has revealed that the currency in circulation further dropped to N982.09 billion in February 2022.
This can be attributed to the Naira redesign policy of the apex bank, which was announced last October when total circulation was put at N3.29 trillion.
These figures revealed that N2.3 trillion or 235 per cent of the cash was mopped up from circulation during the period under review.
According to the CBN, the currency in circulation had moved from N3.16 trillion in November 2022 to N3.29 trillion in December 2022 but dropped heavily to N1.38 trillion in January 2023 and further to N982.09 billion in February 2023.
Last year, the central bank, as part of efforts to drive digital payment acceptance and cut down the currency outside the banking system, announced plans to roll out redesigned Naira notes of N200, N500, and N1,000 and phase out of the old Naira notes.
The Governor of the CBN, Mr Godwin Emefiele, said statistics showed that over 80 per cent of currency-in-circulation was outside the vaults of commercial banks.
He highlighted the need to reduce the significant amount of cash outside the banking system to ensure monetary policy effectiveness, curtail criminal activities, and ensure financial inclusion.
However, many complained about the 90-day window from the announcement to the execution of the policy.
What ensued for many was the unavailability of the new notes, with citizens unable to get cash which hindered their day-day activities. Many opted for digital transactions, which put a strain on a nascent infrastructure, with payment taking longer than expected with many services experiencing downtime.
Although the opportunities opened to the likes of OPay, PalmPay, and MoniePoint to tap into Nigeria’s micro-retail sector, on some days, it was a hassle for these channels to work, leading to increased failure and frustrations in online transactions.
The hardship spurred Kaduna, Kogi and Zamfara to sue the federal government over the naira redesign policy and joined on February 15 by Cross River, Sokoto, Lagos, Ogun, Katsina, Ondo and Ekiti states. Later, Nasarawa, Niger, Kano, Jigawa, Rivers and Abia states joined the suit.
Rivers and Abia states had filed separate suits that were consolidated with the main one.
However, Edo and Bayelsa had joined the side of the federal government in opposing the suit.
Succour came on March 3 when the Supreme Court extended the validity of the notes to December and faulted the ill-timed naira redesign policy.
It wasn’t until 10 days (March 13) after the ruling that the CBN, in a circular signed by Mr Isa AbdulMumin, the CBN’s acting director of corporate communications, directed all deposit money banks to comply with the Supreme Court ruling, further instructing all concerned parties to conform accordingly.
A day before that, President Buhari had distanced himself from the CBN governor and the Attorney General of the Federation (AGF)’s inability to obey the Supreme Court’s ruling.
He said that “at no time did he instruct the Attorney General and the CBN Governor to disobey any court orders involving the government and other parties.”
Analysts expect that as the CBN begin to recirculate the old notes till December, it will gradually ease the hardships of Nigerians and ensure economic activities return to normal in the country.