Business

Naira Redesign: CBN Deadline Insensitive, Spells Doom For Country’s Economy – Experts

Published

1 year ago

January 24, 2023

Editor

As the 31 January 2023 deadline given by the Central Bank of Nigeria, CBN, to phase out the old naira notes inches closer, economic experts have said that refusing to extend the deadline is insensitive and would spell doom for the country’s economy.

The call is an addition to several ones made by stakeholders, including the National Assembly, on extending the deadline for old naira notes to remain legal tender.

In December, the Senate beckoned on the CBN to shift the deadline from 31 January to June. The upper chamber made this call in a motion raised by Senator Ali Ndume and supported by his colleagues during a plenary.

The speed with which the apex implements the naira redesign policy in less than three months leaves more to wonder as fear of a real crisis heightens.

When contacted CBN’s director of Corporate Communications, Mr Osita Nwanisobi, he said he was indisposed to reply to our correspondents’ enquiry on the naira redesign deadline because he was attending the bank’s Monetary Policy Meeting.

Speaking with DAILY POST on the development, the CEO of Centre for the Promotion of Private Enterprise, CPPE, Dr Muda Yusuf, said it would be insensitive if CBN insists on the 31 January, 2023, deadline.

According to him, the apex bank needs to be more realistic about the deadline based on the apparent adequacies and logistics gaps.

He said if CBN insists on implementing the 31 January deadline, it will infringe on citizens’ fundamental human rights.

“The CBN needs to be realistic about this deadline; there is still a lot of gap in the implementation of the naira redesign.

“Concerning the adequacy of the new naira notes, the quantity available is insufficient.

“The other gap regarding logistics, CBN never imagined the logistics implication.

“The logistical thing to do is to extend the deadline. It is going to dispose of citizens’ hard-earned money.

“It is most insensitive for CBN to insist on a deadline that would inflict another pain on Nigerians.

“It will create a whole lot of confusion in the system. CBN, an agency of government, should not toe this line.

“In other climes, they do current redesign policy implementation in two years. CBN wants to do it in less than two months here in Nigeria.

“The National Assembly and other stakeholders have called on the CBN to extend the 31 January deadline. President Muhammadu Buhari must add his voice, else the economy would be deeply affected.

“If CBN insists, it will be infringing on the fundamental human rights of Nigeria citizens,” he said.

A financial expert, Mr Idakolo Gbolade, said the CBN 31 January deadline is not feasible.

He stated that the CBN deadline extension would accelerate the policy implementation nationwide.

He said, “If the CBN does not flood the country with the new notes and even use other means of exchanging it for Nigerians apart from the commercial banks, I do not foresee a successful policy implementation in a week to the deadline.

“The CBN just came up with the cash swap policy for rural areas last week to exchange the old notes for the new ones. The cash swap policy will only succeed if the deadline is extended.

“I am now concluding that the deadline is punitive and could cause some uninformed Nigerians significant loss if the dynamics remain the same.”

Also, an Accounting and Financial Development don at Lead City University, Ibadan, Prof Godwin Oyedokun, said the deadline extension is inevitable.

According to him, Nigerians should not suffer the inefficiency of CBN and those responsible for governance.

“I have said it long before that extension of this date is inevitable.

“It is common knowledge that these notes are not out in commercial quantities.

“It is not our fault as citizens, and we cannot be made to suffer the inefficiency of those charged with governance.

“Now that the notes are not in circulation or in sufficient quantities, it is expected that the CBN should do the needful by extending this by some reasonable days”, he stated.

The CBN announced late last year, precisely October 26, the naira redesign policy, and barely a month after, 23 November, President Muhammadu Buhari unveiled the new naira notes, followed by its circulation on 15 December.

The apex bank issued a directive to commercial banks to ensure that their ATMs dispense only the banknotes. But many banks continued to defy the order.

In less than seven days to the 31 January deadline, the old naira notes are the majority currency in circulation nationwide.

Although the CBN has carried out several initiatives, including its latest cash-swap programme, the calls for extending the deadline have become too loud to ignore.
DAILY POST

Related Topics:Naira Redesign New Naira Notes

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Business

Stock Market Review: FBN Holdings Leads 41 Others As Investors Gain N811bn

Published

4 hours ago

May 4, 2024

Editor

FBN Holdings Plc has topped 41 other advanced equities to pull the Nigerian Exchange Ltd.(NGX) market indices up by 1.46 per cent, week-on-week, making investors gain N811 billion.

The market, having opened for four days in the week, following the May Day holiday, had FBN Holdings leading the gainers’ table by 32.68 per cent to close at N27 per share.

Sterling Financial Holdings followed by 27.75 per cent to close at N4.88, while UACN gained 24.60 per cent to close at N15.45 per share.

Julius Berger added 23.76 to close at N72.40, while Flour Mills rose by 20.66 per cent to close at N36.80 per share.

Conversely, Nascon Allied Industries Plc led the losers’ table by 17.03 per cent to close at N43.60, University Press trailed by 16.67 per cent to close N2.05 per share.

Neimeth International Pharmaceuticals shed 14.14 per cent to close at N1.70, Berger Paints Plc declined by 9.87 per cent to close at N13.70 and Vitafoam Nigeria lost 9.81 per cent to close at N17 per share.

Meanwhile, 42 equities appreciated in price during the week, higher than 27 equities in the previous week.

Thirty-six equities depreciated in price, lower than 43 in the previous week, while 76 equities remained unchanged, lower than 84 recorded in the previous week.

Consequently, the All-Share Index and Market Capitalisation appreciated by 1.46 per cent to close the week at 99,587.25 and N56.323 trillion, respectively, in contrast to 98,152.91 and N55.512 trillion posted last week.

Similarly, all other indices finished higher with the exception of NGX Consumer Goods, NGX Oil and Gas and NGX Industrial Goods which depreciated by 0.26, 0.68 and 0.36 per cent, respectively, while NGX ASeM and NGX Sovereign Bond indices closed flat.

Meanwhile, a total turnover of 1.941 billion shares worth N32.644 billion in 35,807 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 1.839 billion shares, valued at N34.258 billion, that exchanged hands last week in 37,528 deals.

The financial services industry measured by volume led the activity chart with 1.496 billion shares valued at N22.453 billion traded in 19,225 deals, thus contributing 77.08 and 68.78 per cent to the total equity turnover volume and value, respectively.

The consumer goods industry followed with 144.722 million shares worth N5.063 billion in 4,966 deals.

In the third place was the conglomerates industry, with a turnover of 109.978 million shares worth N1.539 billion in 2,064 deals.

Trading in the top three equities, namely Abbey Mortgage Bank Plc, Guaranty Trust Holdings Company Plc and Access Holdings Plc, measured by volume, accounted for 898.940 million shares worth N14.314 billion in 5,518 deals.

These contributed 46.31 and 43.85 per cent to the total equity turnover volume and value, respectively.

(NAN)

Business

BREAKIN: NDIC Increases Maximum Deposit Insurance Coverage

Published

3 days ago

May 2, 2024

Editor

The Nigeria Deposit Insurance Corporation (NDIC) on Thursday increased the maximum deposit insurance coverage levels for Deposit Money Banks from N500,000 to N5 million.

The Managing Director of NDIC, Bello Hassan, announced this in Abuja at a press conference, stating that it takes effect immediately.

He said, “For Deposit Money Banks, the increase of the maximum deposit insurance coverage from N500,000 to N5,000,000, would provide full coverage of 98.98% of the total depositors compared with the current cover of 89.20%.

“In terms of the value of deposit covered, the revised coverage would increase the value of deposits covered by deposit insurance to 25.37% compared with the current cover of 6.31% of total value of deposits.

“The increase of the maximum deposit insurance coverage from N200,000 to N2,000,000, would provide full coverage of 99.27% of the total depositors compared with the current level of 98.76% and would increase the value of deposits covered by deposit insurance to 34.43% compared with 14.38% of total value of deposit, currently covered.

“The increase of the maximum deposit insurance coverage from N500,000 to N2,000,000 would provide full coverage of 99.34% of the total depositors compared with the current 97.98% and would increase the value of deposits covered by deposit insurance to 21.04% compared with 10.77% of total value of deposit, currently covered.”

Hassan also stated that raising the maximum deposit insurance coverage for primary mortgage banks from N500,000 to N2,000,000 would provide full coverage for 99.99% of total depositors and increase the value of deposits covered by deposit insurance to 43.10% of the total deposit value, up from the current 40.60% cover.

The Corporation has also raised the maximum pass-through deposit insurance coverage for subscribers of Mobile Money Operators from N500,000 to N5,000,000 per subscriber.

Business

Dangote Speaks On Devaluation Of Naira

Published

3 days ago

May 1, 2024

Editor

Chairman of Dangote Industries Limited, Aliko Dangote has said that the devaluation of Naira created the biggest mess for the company in 2023.

Speaking at the annual general meeting of Dangote Sugar Refinery, Dangote said this affected lots of companies in the country.

He said: “We are doing whatever it takes to make sure that at the end of the day, we will be paying dividends because if you look at our dividends last year, it was almost 50 percent more so we will try and get out of the mess.

“The biggest mess created was actually the devaluation of the naira from N460 to N1,400. You can see almost 97 percent of the companies, especially in food and beverages businesses, none of them will pay dividends this year for sure but, we will try and get out of it as soon as possible.

“We want to see that at the end of the day, no matter how small, we will be able to pay some dividends, especially if there is a rebound of the naira.”