Old Notes: Banks continue with CBN directive - AfrobadooTV
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Old Notes: Banks continue with CBN directive



The banking industry was in disarray over implementation of the directives of the Central Bank of Nigeria, CBN, on collection of the old banknotes in the denominations of N500 and N1,000 during the weekend.

The apex bank was said to have directed the banks to collect the old banknotes which it had declared non-legal tender with effect from February 10,2023, prompting the banks to not only issue mails to customers to come and deposit their old notes but actually began to collect the old notes. The commercial banks also sent out emails to their customers on Friday, re-opening their branches last Saturday after suspending weekend banking previous weekend with the deadline of old notes acceptance.
However, with a statement from the CBN late Friday denying the alleged directive to collect old notes, some of the banks suspended the collection of old notes while others did. Also some of the banks failed to re-open while a few did.

Meanwhile, despite President Muhammadu Buhari’s directive that the CBN should re-circulate the old N200 notes, the operators in the financial system weekend indicated that the situation will persist throughout this week into next two weeks, and may only begin to ease after the elections.


The anger and frustrations among banks customers across the country continued as many of them are locked out of bank premises, just as most Automated Teller Machines, ATMs, remain without cash.

Only branches located in complexes such as hotels, or large malls with tight security operated freely. Almost all stand-alone branches were locked to customers.
Some banks sent armed security personnel to their gates to either turn back customers by telling them that the bank is not open for customers or screen customers who had other transactions apart from withdrawing cash.
However, others completely closed for fear of being attacked for failing to provide the new Naira notes.

Besides cash deposits, other customers were either making transfers or cheque deposits.

For some banks, their ATM galleries were shut to the public.
Financial Vanguard also discovered a surge in the number of customers requesting debit cards and those seeking assistance to sign up to the banks’ Mobile Apps as the customer care sections were overwhelmed with crowds.
Major markets and shops in Lagos shut down activities last Friday due to crisis emanating from inability to spend the old N500 and N1,000 by Nigerians still in possession of the old naira notes.
Market traders were divided as some traders were collecting the old N500 and N1,000 at a cost by increasing the prices of their wares while others rejected them.
As a result of the confusion among Nigerians, most commercial drivers parked their vehicles, making commuters stranded at the bus stops, even as available transporters increased fare prices.

Old/new notes confusion spreads
There was also confusion across the country over the weekend as the extended deadline for the return of old N500 and N1000 notes lapsed.

The CBN had announced that it would receive the affected notes until February 17, 2023, after which they would be required to undergo certain processes before going to the CBN to have the old notes accepted for deposits.
However, Financial Vanguard learnt that some members of the public who went to the apex bank to deposit their money were turned back, apparently due to their inability to fulfill the requirements.

The reason advanced by CBN staff was that only depositors with N500,000 and above were to take their old notes to CBN. Those with less were asked to take their old notes to their banks.

At the Deposit Money Banks (DMBs), however, there was confusion as some banks refused to accept such deposits, while others did.
Financial Vanguard learnt that the confusion emanated from the CBN’s conflicting communications.

Virtually all DMBs had stopped accepting deposits of old notes since February 10, 2023.
In the midst of the confusion and anger, some DMBs issued memos to their customers who had the affected old notes to come forward and deposit them.
Before the close of work, whoever, that position was countered by a CBN statement, which denied any directive, asking members of the public to continue to deposit their old notes with their banks.

Bank customers, Friday, flooded the banks to deposit their old N500 and N1,000 notes following news that the Central Bank of Nigeria (CBN) had directed Deposit Money Banks to resume collection of the old notes.

Findings also showed that some businesses, including Point of Sales, PoS, operators and transporters still collected the old notes while others rejected them.
For commercial buses some operators said to passengers: “If you don’t have the new notes, don’t enter the bus.” Some others didn’t make any prior announcement and they collected both new and old notes.

A PoS operator in Ojuelegba bus stop, in Lagos, told our correspondent, “It is not quite long that we received information that we can collect the old N500 and N1,000 and take to our bank after we have filled a form the Central Bank of Nigeria, CBN has on its website. We are collecting it. Only that the CBN has said we must not deposit more than N500, 000.”
But most traders were not aware of this development as they had shut down earlier.

A trader in one of the markets in Lagos Island, Mrs. Grace Faleke, said the shops were locked by some traders out of fear of unrest going on at Mile 12 and Ojota areas of Lagos, adding that the market entrance were locked because some people who brought old notes to purchase goods and were refused threatened to fight.
She added that the rioting and fighting at Mile 12, Ojota and other places made some of the shop owners to close down and go back home.
Faleke said: “We have heard that they are fighting in different locations in Lagos, so as a result, most of the traders locked their shops and went home.
PoS operators defy CBN’s threat
Findings also showed that PoS operators continued to sell Naira at N200 and N300 to N1,000 for old and new Naira notes respectively despite the CBN threat to arrest them for such deals which, according to the apex bank, is completely outside their license mandate.

Meanwhile, at the backdrop of the cash crises, the PoS businesses have slowed down as many agents locked their outlets in search of cash.
Financial Vanguard discovered that most PoS agents had to now carry out part transactions and complete delivery of the full amount requested by customers in later days due to the scarcity.

Others had to stay out of business till the situation improves.

Mrs. Adebisi Makinde, a PoS agent at Igando area of Lagos, said, “I have been out sourcing for cash to run today’s business. Despite my running round I was able to gather only N70,000 in denominations of N200.

“This is because after the CBN issued a strong warning on selling and buying of the naira most of our sources have stopped giving the cash out while many had gone to deposit it in their accounts.

“This week I had to pay part of the withdrawal to some customers and asked them to come for the rest the next day.”
One of our correspondents who posed as a potential new Naira buyer was told by a POS, in Abuja, at the weekend, that she would sell her N10, 000 at the cost of N, 4000.

After much negotiation, she later changed her mind and told our correspondent that she bought the currency from someone at N3000 and due to that she would no longer sell the notes as she was saving them in case the scarcity got worse.

She claimed that some bank staff from the Banks Avenue in Area 3, Garki, Abuja, had to come out to the PoS operators to look for cash, as they claimed that they had not received new notes for at least three days.
Speaking with a PoS agent who operates at Federal Housing Authority, Lugbe, also in Abuja, he disclosed: “For two weeks now, I have not been able to get cash, so I am using this period to do other businesses.

“I can’t go through what my colleagues are going through. How can someone go to the bank at 8 a.m and leave the bank at about 4 p.m with only N5,000? I can’t do that.”
But another PoS agent, Madam Oliyonpan Angela, said that the business of PoS is her life and she cannot do without it.
Angela said, “ I love this business, because it is a good business, I am really making it, this is my season. I go to Garki every midnight to withdraw money from the ATM because most people go home to sleep at that time.”
Commenting as well, another POS operator along the same axis said: “There is no cash and the little we have we still buy them. So that is why we charge N200 for N1,000 for old notes and N300 for N1,000 new notes.
Most of the PoS outlets were closed for the day due to unavailability of cash as they had dropped their money with their banks, while those that opened were either not attending to customers due to lack of cash or paying with old notes. Those paying with old notes believed that since the CBN has allowed the banks to continue to collect the old notes, they (old notes) remained legal tender.

Meanwhile, the PoS operators have reduced their withdrawal charges to about four per cent following the wide spread rejection of the old notes. Withdrawal of N5,000 old notes now attract N200 charges.

National President, Association of Mobile Money and Bank Agents in Nigeria, AMMBAN, Mr. Victor Olojo, reiterated the lack of involvement of PoS operators and agents in the distribution of new notes.

He stated: “It has been quite challenging for us. We have really not had access to cash all these times. We have been challenged in all ways. We have not really gotten the cooperation of CBN in terms of working closely with PoS agents.
“We have been pushing, we have consistently worked to see how we can help Nigerians out of this challenge that we are experiencing right now and we are happy to hear that CBN has also directed banks to start collecting N500 and N1,000 old notes. That will also go a long way in trying to solve the issue on ground.”
Implications — Experts’ insights

Speaking to Financial Vanguard on the implications of the latest drama in the monetary space, Prof Uche Uwaleke, President, Association of Capital Market Academics of Nigeria, ACMAN, said: “I am in agreement with the President’s directive to re- circulate N200 notes to ease cash scarcity. The CBN should generally ensure increased supply of lower denominations as well as increase cash withdrawal limit to at least N100,000.
“More PoS machines should be procured especially by petroleum marketers/petrol filling stations as many currently in use are malfunctioning.”
Responding, Head of Research and Investment ay Fidelity Securities Limited, Victor Chiazor said:”

The issue around the Naira redesign and currency swap program has become more political as against being a monetary tool for managing the economy. Unfortunately, these activities will have serious implications on the economy at large as we expect GDP growth figures for Q1’2023 to be negatively impacted as economic activities have significantly been hampered.
“The seeming stability being experienced in the equities market is largely as a result of the significantly lower percentage of foreign participation in the equities market which stood at 10.81% in December 2022 against 89.19% for domestic players; else we would have seen a high level of sell-off form foreign players in the market. For the sake and benefit of the broader economy, we hope that the parties involved will stop heating up the polity and run with the president’s position on the matter.”

Managing Director, APT Securities & Funds, Mallam Garba Kurfi said:”The naira redesigning is a programme introduced to us which may bring down economic growth due to lack of cash. The Extension of N200 note to 10th April may not resolve the situation since that constitutes only 8% of money in circulation which is a drop in the Ocean.”
Speaking, Ejike Nwuba, CEO, RenaissanceAfrica, described the policy as a welcome development, saying that it is healthy and necessary for the development of Nigeria’s economy.
He said: “The naira swap is being sabotaged by enemies of the progress of this country, but against all odds — we must embrace it in our best interest.
“As the Chinese says “strong medicine is bitter”. The implementation may occasion some hardship in the short term, but its future consequences will be tremendously beneficial to our country.”
Jideofor Akpa, a business man, who also spoke in support of the policy, cautioned Nigerians to stop making excuses over their failure to deposit their old notes, saying that the CBN gave ample time to allow people return the old notes to the banks.

“It is almost four months since the policy was announced. That is ample time to get banked or to deposit what you have in your possession.
We need to stop making excuses for ignorance.
“I went to Ogun State by road and in traffic, I saw a hawker selling gala and drinks still clutching wads of old naira notes. When I asked her why, she said, “the governor said the money is still good”.

“The one disenfranchising these simpletons are the state governors deceiving them into believing they can usurp federal laws and edicts,” Akpa said.
The Director, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said that the address by the President will not materially change the situation.

He stated: “200 naira currency denomination is less than 10 percent of the value of currency notes in the economy. The N500 and N1000 notes constitute about 80% of the naira notes.
“The way out of this currency conundrum is for the president and the CBN to comply with the orders of the Supreme Court on this matter. Any other measures would be cosmetic, at best.
“The CBN act specifically stated that reasonable time must be given for any currency swap programme. Three months cannot be said to be reasonable time for a country of over 200 million people, a large informal economy and a vast rural economy.”



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Dangote, PH refineries, others won’t change fuel price – NNPCL



The local production of Premium Motor Spirit, otherwise known as petrol, by Dangote Refinery, Port Harcourt Refining Company and others in Nigeria is not going to change the pump price of the commodity, the Nigerian National Petroleum Company Limited has said.

The NNPCL’s Group Chief Executive Officer, Mele Kyari, who disclosed this during an interview on Arise television in Abuja on Thursday, stressed that the notion that petrol prices would reduce once the country starts domestic production was false.

Kyari confirmed that the Dangote Refinery, which was inaugurated on May 22, 2023, by former President Muhammadu Buhari, would start pushing out products by the end of July and early August.

He also stated that the Port Harcourt Refinery would be delivered by the end of the year, adding that the facility was expected to further boost local production of petrol.

But Kyari declared that despite the volume of petrol being expected from these facilities, the cost of the commodity would not reduce, regardless of the fact that the product was produced locally.

“There is a notion that if the product is processed locally, prices will reduce. Let me make it clear that it is not going to change anything. If you produce locally, the refineries will also input the cost of production and other things and it will be sold at the current price.

“There will also be no subsidy when local production starts because there is no cash-to-back subsidy, this country no longer has the resources to continue with subsidy,” Kyari stated.

Fuel queues
Speaking on when the fuel queues being witnessed across the country would clear, during another interview on Channels TV, the NNPCL boss said the queues would not exceed Saturday.

“I don’t see it staying beyond another day or two, maximum. It can actually be on Saturday. We have supplies. The key trouble with the PMS system is supply, but I have supplies.

“There are over 810 million litres of PMS in depots, tanks and fuel stations across the country, so you don’t have the problem of transferring those from marine to land, you already have them on the ground,” he stated.

He validated the PMS pricing document for various states that trended on Wednesday on the internet, stating that the document was from the NNPCL.

“You have seen a document in the space out there. Every company does this. It is a marketing document. It was not a price announcing document, every company keeps this record and adjusts it appropriately on the basis of changing conditions in the market.

“So what you saw was just an internal company document that found its way into the internet. It is an NNPC document but it was not intended to be an announcement and is not an announcement, because it can change the next day,” Kyari stated.

On whether there was enough product in-country, he said, “Today I have 1.8 billion litres of PMS and that means that if we don’t do anything, I’ll have sufficient fuel for the next 30 days in my hands.

Kyari explained that the company had over 800 million litres of petrol on land, stored in filling stations, tank farms and depots, while its total stock for both marine and land stood at about 1.8 billion litres.

“But, of course, the way we supply is not this way, so we maintain this level of supply consistently. That means you will see the arrival of products every day so that you continue to maintain that level of safety.”

‘Subsidy not realistic’
Speaking to journalists after a meeting with the National Chairman of the All Progressives Congress, Senator Abdullahi Adamu, at the party secretariat in Abuja on Thursday, Kyari revealed that the administration of President Bola Tinubu had concluded arrangements to have one of the four refineries repaired and operating at an optimal level before the end of the year.

The NNPCL boss argued that it was no longer justifiable to continue subsidising the commodity given the high opportunity cost the Federal Government was suffering from funding it.

Kyari, who was received by the APC chairman and members of the National Working Committee at about 12.30 pm, confessed that the country could no longer sustain the expensive subsidy regime.

According to him, over 38 per cent of the total fuel distributed in the country was consumed by Lagos, Abuja, Kano and Rivers.

Kyari explained that following the hike in pump price and the resultant effect on commercial fare, the president was working out some palliative measures to ease the pains of Nigerians.

He also added that there was an ongoing process of rehabilitation to ensure one of the refineries was ready this year.

Kyari lamented that despite its N2.8tn indebtedness to the NNPCL, the Federal Government had yet to release funds for 2022 and 2023 subsidies.

He said, “There was a subsidy in 2022 but in 2023, not a single naira was provided for the purpose. And ultimately while we held back our fiscal obligations, we still have a net balance of over N2.8tn that the federation should have given back to the NNPC.

‘’For any company, when you have negative N2.8tn, there is no company in the whole of Africa that will lend to you. You cannot have receivables. The provision of subsidy is there but absolutely there is no funding for it. It means it is only on paper. It doesn’t exist.

“We can no longer bear it. If we continue, we will run into defaults and the default of NNPC is the default of Nigeria. Once NNPC goes into default and liquidity, it affects every borrowing done by the country, even the sub-nationals. Your lenders will come back to you and say your country can no longer pay.

‘’The only way you can stop this is to stop this conversation around subsidy. It is why Mr President announced that the subsidy is gone. In 24 hours, the bond market appreciated. It is nothing else other than the statement around subsidy and balancing of the apex market. These two elements are a major concern for every investor all over the world. Every partner that we have is worried about.’’

Inflation expected
Kyari acknowledged that the price increase would trigger inflation, noting that the market forces would determine what happens subsequently.

He noted, “Before today, the average subsidy level was N400bn every month. There is nothing anybody can do about it. There is this common argument that the masses will suffer. I agree that once you increase prices of this proportion, as it has happened, it will have an impact on inflation. There is no doubt about it. The market determines what happens next. Even inflation in many countries goes up when you have economic indices become difficult.

“Mr President’s target is to have seven per cent growth of GDP. You cannot have it if you have this disruption in your demands and consumption pattern. Very many of us here have at least two cars in our houses including myself. When you buy fuel of 100 litres in an SUV, you are literally subsidising three litres with N100 for all of us.

‘’Even the consumption itself is clearly skewed in locations and states where the level of economic activities are higher than the others. It is very understandable and that is why people can afford it in Abuja, Lagos, Port Harcourt, and Kano. So over 38 per cent of the total fuel distributed in this country ends up in these places. All the other parts of the country suffer for it and you can see the relativity.’’

Kyari submitted that the price at which petrol was being sold now is the current market price of the commodity.

‘’The price you are seeing today at our stations is the current market price of the commodity and what this means is that prices in the market can go down at any time and the market will adjust itself. The beauty of this is that there will be a new entrance because oil marketing companies now will want to invest, they have been reluctant to come in because of the subsidy,’’ he stated.

With the latest development, the NNPCL chief said the market would regulate itself, adding that oil marketing companies could now import products or buy locally-produced ones and take them into the market and sell at commercial prices.

He added, ‘’You would see competition even with NNPCL, and by law, the company can’t do more than 30 per cent of the market going forward. So competition will surely come in and definitely, the market will regulate the price itself. It is an instantaneous price and in two weeks, you will see the adjustment that is happening in many jurisdictions.

‘’But ultimately, you would see changes in price downwards and that is very likely. Efficiency will come in and every lacuna in the sector will be taken out because of the new situation.

‘’The current price is not fixed and will surely change and we did it to announce various prices depending on our cost by location and by the realities around us knowing full well that the NNPCL is the single supplier of the market today and we are seeing that exit coming very quickly. There will be no monopoly and we will not continue to be the only supplier.’’

Meanwhile, the House of Representatives has called on the Federal Government to end subsidies on not just petrol but all petroleum products.

The House, however, urged the government to roll out palliatives and other measures to cushion the effects of the removal of the PMS subsidy on Nigerians.

These were part of the recommendations by the House Ad Hoc Committee on the Need to Investigate the Petroleum Products Subsidy Regime in Nigeria, which the lawmakers considered as a Committee of the Whole and adopted in plenary on Thursday.

Chairman of the committee, Ibrahim Aliyu, had laid the report, 11 months after the task was assigned to the panel.

The committee recommended that “the Federal Government should remove subsidies on all petroleum products.”

It also recommended that “the Federal Government should immediately design measures and palliatives to cushion the effects of the subsidy removal for Nigerians, effective from this year 2023, through the provision and procurement of Compressed Natural Gas buses as an alternative transport system with cheaper fuel consumption.”

The panel also said the government should introduce intermodal, regional and national transport systems to ease the mass movement of people across the country.

In addition, the committee recommended that the Nigerian Midstream and Downstream Petroleum Regulatory Commission should issue stricter and most appropriate regulations as provided in the Petroleum Industry Act to ensure that Nigerians were not short-changed through profiteering.

The lawmakers equally said the Revenue Mobilisation Allocation Committee should lead a reconciliation meeting between the NNPCL, Federal Inland Revenue Service, Joint Venture Contracts and the NMDPRC on the utilisation of their crude entitlements.

The report partly read, “With the total deregulation of the sector, all the agencies involved in crude lifting/security should have a representative with the Nigeria Navy as a lead agency to physically assess and document daily crude production and lifting;

Oil swap
“The committee also recommends that the Federal Government should, as a matter of urgency, liaise with the National Assembly to fashion out critical areas of economic development, in which the additional revenue from the proposed subsidy removal will be appropriately utilised.

“A further investigation, through a forensic audit by the Office of the Auditor General for the Federation, be made to ascertain whether the N413bn borrowed from the Central Bank of Nigeria for subsidy payments was refunded after the passage and assent of the 2015 budget as earlier approved by the President and the report of the Auditor General to be submitted to the House for further legislative action.

“With the subsidy removal, the Federal Government should forthwith suspend all Direct Sales Direct Purchase (oil swap) contracts. NNPCL should act by the provision of the PIA to ensure that the country is not sub-changed in both production, lifting and sales of crude.

The committee further recommended that the Nigeria Customs Service and the Weight and Measures Department of the Federal Ministry of Industry, Trade and Investment be equipped to ascertain the actual daily crude oil lifting from the country for proper checks and balances.

Another recommendation was that the Nigeria Extractive Industries Transparency Initiative Act, 2007, be amended by the National Assembly to be in tune with global best practices.

The panel further recommended that the National Assembly, especially the House standing or ad hoc committees in the 10th Assembly be saddled with such responsibility to conduct “a full-scale investigation on the defaulting oil companies and MDAs that have not met the expectations of the committee to ascertain their level of involvement or otherwise and further protect the commonwealth of the country.”

The House on June 29, 2022, resolved to investigate payments for subsidy on petroleum products, especially petrol, under the Muhammadu Buhari administration.

The Speaker of the House, Femi Gbajabiamila, had set up the panel whose probe covered 2017 to 2021, with the mandate to report back to the House within eight weeks for further legislative action.

The probe was based on a motion titled, ‘Need to Investigate the Petroleum Products Subsidy Regime in Nigeria from 2017 to 2021,’ which was unanimously adopted after it was moved at plenary by a member of the House, Sergius Ogun.

In a related development, the Nigeria Labour Congress has dismissed reports that it would embark on a nationwide protest against the increase in the pump price of petrol.

In a statement on Thursday, signed by its head of information, Benson Upiah, the congress noted that it would keep the public abreast of its moves.

The union had demanded the reversal of the fuel pump price while a meeting between the labour leaders and the FG deadlocked on Wednesday.

But clarifying its position following speculations about its next move, the congress said, “In as much as we are outraged by this mindless price increase which is intended to bring untold hardship to ordinary Nigerians, we have no plan to start any action tomorrow (today).

“What we do have for now are organ meetings slated for tomorrow, Friday, June 2nd, 2023 to deliberate on the price issue. We promise to keep Nigerians informed on our next line of action after our meetings.’’

In reaction to the fuel price hike, the Edo Civil Society Organisations on Thursday blocked a section of the Benin/Lagos highway in protest against the subsidy removal.

The protest, which was held at different locations in the state, obstructed vehicular movements forcing commuters to trek long distances.


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Naira exchanges at N464.67 to dollar



Naira remained unchanged on Thursday, exchanging at N464.67 to the dollar at the Investors and Exporters window.

The local currency did not change from its value on Wednesday, while the open indicative rate closed at N464.64 to the dollar on Thursday.

An exchange rate of N467 to the dollar was the highest rate recorded within the day’s trading before it settled at N464.67.

The naira sold for as low as 460 to the dollar within the day’s trading.

A total of $250.98 million was traded at Thursday’s official Investors and Exporters window.


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CBN increases interest rate to 18.50%



The Central Bank of Nigeria (CBN) has again increased the monetary policy rate (MPR) by 0.50 per cent to 18.50 per cent.

The Governor of the CBN, Mr Godwin Emefiele, announced this interest rate hike on Wednesday while addressing newsmen in Abuja.

He said members of the team agreed to raise the benchmark interest rate to curb inflation.

The CBN governor said the committee considered a perennial scarcity of Premium Motor Spirit known as petrol, the 2023 general elections, continuous rise in energy prices, exchange rate pressure as well as continuous rise in insecurity.

He said committee members noted that the naira redesign has huge moderating factors to price development on cash.

Announcing the committee’s decision, Emefiele said, “MPC was of the view that although the inflation rate moderated marginally in December, the economy remained confronted with the risk of high inflation with adverse consequences on the general standards of living.

“Committee, therefore, decided to sustain the current stance of policy at this point in time to further rein in inflation aggressively.

“MPC voted to raise the MPR to 17.5%, retain the asymmetric at +100/-700 basis points around the corridor.”

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