CPPE: Return of old notes should accommodate informal sector

The recent directive issued by the Central Bank of Nigeria (CBN) regarding the deposit of old naira notes has sparked chaos and confusion among Nigerian citizens. The Center for the Promotion of Private Enterprise (CPPE) has criticized the directive, stating that it is conflicting and does not provide a simplified process for depositing the old notes, particularly affecting informal sector players and rural dwellers. In a recent interview with CNBC Africa, Muda Yusuf, Director at the CPPE, expressed concerns about the challenges faced by citizens in complying with the CBN's guidelines. The directive initially required all deposits of old naira notes worth 500,000 and below to be made at commercial banks, while amounts above that were to be deposited at CBN offices. However, the guidelines have been revised multiple times, leading to further confusion and inconvenience for the public. Yusuf highlighted the logistical difficulties faced by citizens, particularly those residing in rural areas with limited access to banking facilities. The overcrowding and congestion witnessed at CBN offices and commercial banks have exacerbated the situation, causing disruptions to businesses and daily transactions. Yusuf emphasized the need for a decentralized process to ease the burden on citizens and ensure a smoother transition. Despite the CBN's attempts to adjust its policy in response to the evolving situation, Yusuf underscored the importance of considering the challenges faced by various segments of the population, such as illiterate individuals and micro-enterprises, who may struggle to navigate the deposit process, particularly online requirements. The lack of adequate data on cash volumes in rural areas has further complicated the situation, as many businesses rely on cash transactions, including high-value trades in agricultural commodities and livestock. The introduction of 200 naira notes as a temporary measure to alleviate the scarcity of new notes was deemed insufficient by Yusuf, given that the majority of transactions use 500 and 1,000 naira notes. He questioned the practicality of printing enough 200 naira notes to address the deficit effectively. Amidst growing concerns about the political and economic implications of the naira scarcity, Yusuf expressed skepticism about a quick resolution to the crisis, citing ongoing challenges with accessing locked-up funds in banks and the persistent chaos at banking facilities. He highlighted the urgent need for a comprehensive strategy to restore stability and confidence in the financial system, urging the CBN to prioritize the welfare of citizens and streamline the currency exchange process. As the uncertainty lingers, Nigerians remain apprehensive about the impact of the ongoing turmoil on their livelihoods and the broader economy.