Exploring the Naira Re-designation Policy: How the subject of cash scarcity has affected Uites

by Opemipo Olukoga and Mahbubat Salahudeen

On a Tuesday Morning, Obafemi Joyce, a 100 level CLA student of the Faculty of Arts, boarded a bike from UI to Dugbe. On her way back, she realized she had run out of cash and proceeded to get some from a POS attendant nearby. It was this day that she realized the cash scarcity was nothing but that which would doom people to hunger, and even death. According to her, the POS attendant around did not have cash and after trekking, the next attendant she met requested ridiculous charges (N500 for N2000). However, she had no choice but to pay since she wanted to leave the spot badly.

Joyce said, “The scarcity really affected me as someone who tends to move around a lot. It was really frustrating and I honestly can’t wait for cash to circulate so we can go back to our normal lives. Many people died because of this policy. Lives were lost only for them to extend the deadline. It is very insensitive of the government and the CBN Governor too.”

Obafemi Joyce was not the only student that shared her ordeals with the cash scarcity but Ifeoluwa John*, a student of Science and Technology Education also bemoaned over how the cash scarcity had been for him. For him, the cash was not the problem but the extra amount he had to spend on transfer charges, while sending money to those he purchased goods from, was quite much.

“I was not too affected by the cash scarcity because I purchased most of the goods through online transfer during the period but the charges were so much that I had to start going to the bank to get money, at some point due to frustration over wastage of funds. Everything is peaceful now since the deadline has been extended and I can now go to bank to easily withdraw money without much stress just like before.”

While some students tagged the move to redesign bank notes unnecessary, Iwalola Atilebi, a 100 level student from CLA felt otherwise. She said, “As for me, I saw it as a policy that will help reduce inflation by forcing people to spend the old currency they have hoarded for a long time thereby aiding circulation.” She, however, admitted that the move by the CBN had a negative impact on citizens saying, “Well it had a great effect on everyone. Personally, it frustrated me because I was cashless for weeks having to trek and all.”

Background Story
On 26 October, 2022, the Central Bank of Nigeria announced the re-designation of the highest denomination of the Nigerian currency including N200, N500, and N1000 on the order of the federal government adding that the old naira notes would stop being a legal tender on 31st January, 2022. There was an immediate backlash with strong opposition coming from the Nigerian populace. Many Nigerians felt that the decision by the CBN to redesign Naira was unnecessary and criticized the design of the notes as unappealing. Across social media platforms, responses from netizens show that people were underwhelmed as the new designs of the notes fell below their expectations. Some people pointed out that the banknotes look like they were printed with a Snapchat filter.

Subsequently, as many anticipated, the implementation of the naira re-design policy led to the circulation of counterfeit new Naira notes few days after CBN began circulation of the newly redesigned notes in the Nigerian economy. On 31st January, most traders refused to collect the old notes and citizens who could not visit the banks due to long queues, began to panic. The CBN Governor later shifted the deadline to February 10. However, this was an unfavorable condition for Nigerians as it seemed this decree will only doom them to hunger. Although they had deposited old notes, withdrawing new notes to spend on expenditure became a difficulty.

This policy forestalled projects, and necessary tasks citizens were to carry out with the use of cash. As known, money is the vehicle for financial expenditure and business exchanges. Several citizens bemoaned the inability to make transfers on their phones despite having a substantial amount of cash in their bank accounts. The frustration led to an upsurge of emotion that resulted in protests by defiant and frustrated citizens, across all states. While some citizens led groups to vandalize bank properties, some burnt few properties on the road, to express their grievance.

The Yoruba tribesmen would say “Ti o ba nidi obirin o ki je kumolu” – which literally means “there is a reason for someone’s behavior.” To the citizens, the policy showed the government’s insensitivity and lack of compassion to its citizens. If there is an increase in the price of commodities under this government, and we still strive to purchase goods, why make the situation even worse by making it difficult for us to spend our earnings on necessities? POS attendants made the situation worse as few who were able to withdraw increased their charges, blaming the cash scarcity as the reason for the drastic change. More frustrated citizens staged protests while few stayed indoors, lashing out their frustration in their closed doors.

The UI reality
Like outsiders, the situation of limited circulation of cash was not any different for students of University of Ibadan. As previously stated by the sources, POS attendants within and outside university grounds proceeded to prey on the situation by charging exorbitant prices for cash withdrawal such as N200 for N1000 and N400 for N2000. To aggravate the situation, Automatic Teller Machines on campus dispensed nothing above two thousand naira per withdrawal and POS attendants within the area opted for half the amount dispensed at ATM stands on campus.

A number of students recalled walking long distances outside the University in search of POS stands which gave out above a thousand naira notes for lesser charges and one of them is Iwalola who said, “I can remember before going home, I trekked around looking for cash and I didn’t find any. I ended up trekking from CMF to school gate and there was this one time I had to trek from botanical garden to CMF, honestly that is my most frustrating experience so far.”

To the relief of many, on 3rd March, 2023, the Supreme Court saved the country’s democracy by overturning the directive of the CBN on the ill-timed naira redesign policy after much turbulence and opposition from the populace. However, things did not seem to return to normal as some citizens, traders and drivers particularly, have refused to accept old naira notes as legal tender. Additionally, despite the CBN’s extension of the deadline for the spending of old notes till 31st December, 2023, students still struggle to withdraw notes from banks, ATMs and POS machines due to low generation of Naira notes by financial institutions. This has, nonetheless, propounded on the plights of students as many now find it difficult to carry out financial transactions using bank apps such as Palm pay and Opay due to limited flow of cash. Speaking on the Supreme Court’s ruling, Oluwasegun Adegoke, of the Department of Health Education, expressed that it is not yet time to leap for joy.

“Well, we are not out of the woods, yet.” He reasoned. “The naira scarcity keeps getting worse and we still pay exorbitant charges through our nose to buy naira notes. Hopefully, with the passing of weeks, it will ease up.”

In December 2022, the apex bank had insisted that the newly redesigned notes will help forestall hoarding of Naira notes and help curb inflation in the country. While the reason behind the implementation of the policy was beneficial, it has been tagged by many as a curse fashioned against nationals of the country. On whether the naira redesign policy was a blessing or curse against citizens, Iwalola emphasized saying, “Well, what would have been a blessing turned to a curse because of how they went about implementing the policy. Seeing that it frustrated and is still frustrating Nigerians, I will say it is a curse.”

With the election break over and students returning to classes to resume academic activities, the questions are: Will the situation improve this month so students do not get frustrated over inability to get access to funds or will the story still remain the same? How soon will everything get back to normal? No one has an answer to this, but now that the deadline has been extended to the end of the year, change is in the air.

Editor’s note: the name in asterisks was changed at the source’s request.