The Challenge And Opportunity Inherent In Naira Redesign

Brief Recap

The New Naira Notes:

The redesigning of the Naira and its unveiling is no longer news to anyone.  You will remember that the Governor of the Central Bank of Nigeria, Godwin Emefiele, on Wednesday 26th of October 2022 in a special press briefing in Abuja announced that the apex bank will be redesigning the nation’s currency notes, with the launch scheduled for the 15th of December 2022. The new note, the N200, N500 and N1000 was subsequently formally unveiled by President Muhammadu Buhari last Wednesday, the 23rd of November 2022 onward to the 15th of December official launch.  All these we had detailed in our previous post about the Naira redesign.

 

The Challenge Of The Naira Redesign

The central bank governor in his statement urged Nigerians to proceed to their banks to deposit their Naira notes while directing all commercial banks to keep open their currency processing centres from Monday through Saturday so as to accommodate all cash that would be returned by their customers.  As good as that may sound,  leaving the banks open Sunday to Sunday may not accomplish much if the report of the huge population of unbanked Nigerian population is anything to go by. 

The World Bank in its 2021 financial inclusion report listed Nigeria among countries with huge unbanked populations. The report has it that Nigeria is one of the 7 countries that contribute to half of the global population of the unbanked which was pegged at 1.7 billion people majority of whom are women. It is believed that 64 million out of the 200 million population of Nigeria still do not have bank accounts with any regulated financial institution or mobile money platform.  These unbanked populations are primarily in the interior rural communities that are mostly inaccessible or hard-to-reach parts of the country. The World Bank report has it that 56% of the unbanked adult population are women.  What challenges do you envisage apart from the issue of the unbanked population? Are you currently facing any challenges or know anyone in a dilemma of how to deposit their old notes to the banks? Share with us in the comment below or use our contact to get in touch with us for advice and possible solution to the problem.

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Prospects and Opportunities Inherent In The Naira Redesign

Just like the old saying, there is opportunity in every problem. As a matter of fact, society and businesses cannot flourish without problems. If you want to be wealthy look for problems and solve them.   That is how the likes of Mark Elliot Zuckerberg, Elon Musk, Jeff Bezos, Changpeng Zhao, and Bill Gates of this world became billionaires, by solving problems.  The Naira redesign and the need for people to bring out their old notes have opened up opportunities or made the already existing one more profitable. One of them is;

Mobile Banking Services

Mobile banking services, also known as agent banking is already putting food on the tables of many Nigerians. Like in the era of recharge cards sale, when every corner of the street had an umbrella stuck into a table, the redesigning of the Naira has further broadened the opportunities in the POS services business in Nigeria, making it more profitable for operators.  Mobile money adoption in Nigeria has continued to rise before now, such that those who could not access banking services or access commercial banks in their location with ease pushed the mobile money services beyond their originally designed purpose.  The service was originally designed to allow people to send and receive remittances within the country.  But adoption and usage have spread beyond those origins, such that people can now deposit and withdraw cash, register for BVN and open bank accounts among other utility services. It is David Malpass the President of the World Bank, who was quoted to have said;

The digital revolution has catalysed increases in the access and use of financial services across the world, transforming ways in which people make and receive payments, borrow, and save.

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Assurances From The CBN

The Nigeria Apex Bank has vowed to protect the unbanked Nigerians to ensure that they don’t suffer any loss as a result of the proposed Naira redesign exercise that is to terminate on 31 January 2023.  This they tend to do by collaborating with stakeholders, especially leveraging on the agent banking services across Nigeria to ensure cash deposits in rural areas,  assuring that the mistake of the past, where unbanked, rural dwellers suffered significant losses of their funds as a result of the inability of some to change their old banknotes through the official channels

In a statement from the CBN Director of Corporate Communications, Mr Osita Nwanisobi, said, that

CBN is pleased to note the positive response of the banking public to the policy through increased currency deposits across banks and other financial institutions. The CBN remains committed to the seamless implementation of the initiative to ensure the achievement of its objectives to preserve the integrity of the local legal tender by reducing the significant amount of cash outside the banking system and its use in criminal activities, curtail counterfeiting, and promote financial inclusion, amongst others.  Whilst noting the progressive increase in financial access points and alternative banking channels over the years (electronic/internet banking, mobile apps, ATM, Cards/PoS, eNaira, agent banking, etc.), the Bank acknowledges that these may not be evenly distributed across all geopolitical zones and in some rural areas. In operationalizing this initiative, the CBN has been collaborating with relevant agencies and other stakeholders in the financial system in its execution, particularly ensuring that vulnerable citizens are not disenfranchised.

Accordingly, the banking public in rural and/or underserved areas may access CBN branches in the 36 States of the Federation to inquire about options for depositing their current N200, N500, and N1,000 notes, wallet/account opening processes and financial access points.

Furthermore, agent locations across the country have been fully enabled for BVN registration, opening bank accounts/wallets & e-Naira wallets, electronic card distribution, and cash deposit, among others. Due to the policy, the agents have also been accorded priority to enable them to deposit cash collections through bank branches across the federation. The Bank shall continue to monitor developments and issue updates to the banking public on the implementation of the Naira redesign policy as may be necessary.

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FAQs

How many people in the world are Unbanked?

The global population of the unbanked was pegged at 1.7 billion people majority of whom are women.

Which of the naira notes is being redesigned?

The Central Bank of Nigeria proposed naira notes to be redesigned are N200, N500 and N1000.

When is the deadline to change the old naira notes?

According to the CBN governor, the old naira notes will cease to be legal tender by the end of 31st January 2023 and they have vowed not to extend the date. Contact us for assistance if you are having any issues with your old note or need clarification on any matter. We also have a video that have detailed the processes

What is the number of the unbanked population in Nigeria in 2022?

According to a World Bank report, it is estimated that about 60 million Nigerians are unbanked.

What is CBN doing to drive financial inclusion in Nigeria?

The CBN says the agent locations across the country have been fully enabled for BVN registration, opening banking accounts/wallets & e-Naira wallets, electronic card distribution, and cash deposit, among others. Due to the policy, the agents have also been accorded priority to enable them to deposit cash collections through bank branches across the federation.

Is the new Naira note now in circulation?

The central bank of Nigeria will launch the new notes to the public on December 15, 2022, after which the banks will begin to issue it to customers. And it will be used side by side with the old notes till January 31, 2023, after which the old notes will cease to be legal tender.