Home 2023: Cash Scarcity: Testing the patience of the sleeping dog

Cash Scarcity: Testing the patience of the sleeping dog


The volatile state of Nigeria at the moment is worrisome, and a keen look at it right now reveals that all is not well. On October 26, 2022, Governor Emefiele of the Central Bank of Nigeria announced that the 200, 500 and 1000 naira notes would be redesigned. This was met with mixed reactions from Nigerians, with the majority kicking against the initiative, while others were willing to give the apex bank a chance.

The three major reasons the CBN gave for the naira redesign are; to stop cash hoarding which it noted is in large numbers by the public, to curb the increased rate of naira counterfeit, and because the naira needs to be redesigned every five to eight years.

In a PDF file made public by the CBN, it stated that the benefits of the redesign notes are; to strengthen the economy, help check counterfeiting, reduce expenditure on cash management, promote financial inclusion, and enhance its visibility on the money supply.

President Buhari and Governor Emefiele at the launch of the redesigned naira

By November 23, 2022, the new naira notes were launched by President Muhammadu Buhari, this time, more Nigerians kicked against the new notes which looked more like recoloured notes. Following the launch, the CBN announced January 31, 2023, as the day the old notes will cease to be legal tender while urging bank customers to head to their various banks to exchange the old notes for the new notes.

Waking the Sleeping Dog

Almost three months after the launch, instead of experiencing some of the benefits promised, Nigerians are faced with untold hardship and frustration as they cannot access the cash in their bank accounts. This is because banks are not dispensing well enough cash to go around. In fact, many banks were not issuing cash at all.

Bank customers were left outside as banks shut operations. Credit: BBC

The scramble to deposit and exchange the old naira notes was so chaotic that the CBN bowed to pressure and extended the deadline date by ten days.

The first ten days in February for banks and their customers were disheartening and terrifying, as customers were in large numbers at the ATMs and banking halls but were mostly unable to get their funds. By the middle of the week, hell was let loose, as some customers became violent and began to attack bank workers and properties.

In Lagos, various bank branches shut down their operations as a precaution against mob attacks and asset vandalism. On February 3rd and 5th, protest cum riots broke out in Ibadan, Oyo State and Abeokuta, Ogun State with two reported casualties and lots of properties destroyed.

Protest broke out in Abeokuta

Additionally, protests were held in other cities like Uyo, Ondo, and Benin, and some days back, there were full-scale riots recorded in some parts of the country over the persisting cash shortage issue.

Although one of the excellent attributes of a typical Nigerian is resilience, however, there is so much the average Nigerian can take. The naira scarcity is coupled with fuel scarcity, and these combined challenges have halted many progressive activities in the country.

Transportation is almost on its knees, while small businesses have almost been crippled. If the situation continues, the sleeping dog may wake up, only this time with aggression.

The Protagonists and the Antagonists

The back and forth among the top actors which include the Federal Government (FG), CBN, judiciary, politicians and the banks can be likened to the Star Wars movie series with multiple ‘actors’ and ‘boss’ who cross carpet their roles like in ‘Face Off’, and leave us not trusting anyone because no one is sure of where either stands.

As it stands, we are past the question of whose fault it is, and talking about why and what these actors are up to. President Buhari on February 3, requested he is given seven days to resolve the crisis, by February 11, there was no improvement whatsoever.

The only notable activity was the visitation of banks by the officials of the Independent Corrupt Practices and Other Related Offences Commission, ICPC, to ensure compliance by commercial banks with the CBN’s directive on the distribution of the redesigned naira notes, which only revealed that some banks were hoarding the available new notes.

During the compliance check, the ICPC in a statement on February 7 said it discovered the sum of N258 million stashed in the vault at the Abuja head office of Sterling Bank.

“This discovery followed one of the Commission’s operations at ensuring that commercial banks and other interest groups do not flout the apex bank’s directive.

“When the ICPC monitoring team visited the bank and discovered the stashed new Naira notes in the bank’s vault, it was informed that the cash was the remnant of what the CBN had given the bank for onward distribution to its branches.

“The team, however, found out that only the sum of Five Million Naira (N5m) each was distributed to their various branches.”

The Commission said the regional and service managers of the bank were arrested and later granted administrative bail while investigations continue into the matter.

A bank staff of Access bank who pleaded anonymity said, as of the first and second week in February, one million naira was distributed to their top branches weekly but has been reduced to N500,000 per week.

“Last week, we got just N500,000 for the week and were instructed to share it in a 6:4 ratio, 60% to ATM and 40% to the counter. At the end of the day, we had to share N3,000 on the counter for those that came into the banking hall, the rest went to the ATMs. All the money was gone under thirty minutes. This is a branch that would usually get 10 million twice in a week,” he said.

The ICPC also arrested a branch service head of Stanbic IBTC Bank, Abuja, for refusing to upload cash into the ATM even when the cash was available, and people were queuing at the ATMs.

In a statement on its website, the ICPC said “the monitoring team stormed the bank at about 1:30 pm to ensure compliance and demanded explanation as to why all the ATMs were not dispensing cash, it was informed by the branch’s Head of Operations that the bank just got delivery of the cash.

“However, facts available to the ICPC operatives indicated that the branch took delivery of the cash around 11:58 am and either willfully or maliciously refused to feed the ATMs with the cash.

“Against this backdrop, the ICPC team compelled the bank to load the ATMs with the redesigned Naira notes and ensured that they were all dispensing before arresting the culprit.”

The source, when asked why some banks were hoarding cash, said it is unclear and that branch managers are making decisions autonomous of the head office.

“I don’t understand why those banks are hoarding cash. For my branch, the money brought in is not even enough for a customer on a typical day, even our old notes are sent to the head office immediately, maybe the banks hoarding are head offices because I can’t wrap my head around why.

The other major actors are the banks whose actions and inactions are affecting everyone including their members of staff. On February 7, a video of some Zenith bank staff climbing the fence to escape the raging customers who were likely to ravage the bank went viral. Greeted with mixed reactions, the video showed how much danger the bank workers were in.

Zenith Bank staff climbing the fence to escape the raging customers

Speaking to another source who works in a new generation bank, she said lots of her colleagues were harassed and physically abused.

She said “There were no major instructions for our safety other than that we should dress as casually as possible to the office so as not to raise suspicion that we work in banks.

“Myself and most of my colleagues have been wearing native or jeans to the office as a disguise and we now have police on the premises, although I can only speak for my branch.”

Sadly, the banks didn’t prioritise their safety as they should have. After the violence in Abeokuta and Ibadan, most of the bank management in Lagos especially didn’t believe it would get to them.

The reverse was the case and the situation was almost getting out of hand when policemen were begun to be deployed to bank branches.

Protesters attack a bank in Benin

These bankers, like many other citizens, do not have access to this money, both sources mentioned that they also have to go through the stress of using the ATM most times to get cash for themselves.

“Most of the time, I have to use the ATM immediately before it’s loaded before non-staff gets there, same for my colleagues,” one source says.

“Thank God I was able to withdraw a lot of new notes in January, if not, it would have been difficult for me. We really don’t get any preferential treatment with the new notes because the customers are paramount, so you have to go through stress to acquire for yourself as a bank staff,” source two says.

Background Actors

Minor actors like politicians and the judiciary have played their part. Politicians are divided into both sides of the spectrum, those who are for – opposition parties – and those against – the ruling party.

The oppositions want to exploit the situation as it makes the government of the day look bad and somewhat reduces their cash power, thereby levelling the playing ground for all political parties.

This was no surprise when thirteen political parties formed a coalition and threatened to pull out of the general election if the CBN extends the deadline from February 10.

The coalition of chairmen of the political parties insisted that the policy must stand in a statement circulated on February 6, saying:

“We hereby announce that at least 13 out of the 18 political parties in Nigeria will not be interested in the 2023 general elections, and indeed we shall withdraw our participation from the electoral process if this currency policies are suspended or cancelled or if the deadline is further shifted.”

The ruling party, on the other hand, has many times kicked against the deadline, governors from the APC have held meetings with Emefiele and even sent Delegates to President Buhari to reconsider the old naira note deadline ban. Their reason is that it is affecting the masses and crippling the livelihood of Nigerians.

This act has been questioned severely seeing how the governors did nothing when ASUU was on strike for eight months and students were at home, they didn’t take a trip to Aso Rock when the masses were struggling with fuel scarcity – an ongoing challenge. But were quick to run to the President and CBN when they had to share in the suffering of the people. How convenient?

Governors Nasir El Rufai and Yahaya Bello at the Supreme Court on Wednesday. Credit: Premium Times

One of the latest was on Monday, February 6, the governments of Kaduna, Kogi and Zamfara States, all APC-governed states filed an ex-parte motion against the Federal Government at the Supreme Court, seeking a restraining order to stop the full implementation of the naira redesign policy of the CBN.

Consequently, the Supreme Court seven-member panel led by Justice John Okoroon Wednesday, February 8, ruled in favour of the governors by ordering a suspension of the deadline for the swapping of old notes to new Naira notes and adjourned the case to Wednesday, February 15, 2023.

This decision of the judiciary to postpone the ban will have its own consequences. With many people holding on to the old notes, the aim of financial inclusion is defeated as they will be less likely to open bank accounts or engage in digital transactions.

It has been earlier stated that the CBN intend to reduce a large amount of physical currency in circulation to promote a cashless policy and eventually reduce inflation, this process has been slowed down by a huge margin.

Additionally, the postponement of the ban could increase the rate of counterfeiting and has cast a doubt on the autonomy of the CBN. The CBN which is an independent body is meant to make decisions without political interference. With the ruling, many might begin to question the credibility of the CBN and its policies.


Nigeria is sitting on a time bomb and the financial “anti-bomb” squad are working tirelessly to disable the explosive materials, unfortunately, the same squad – CBN – entrusted with safeguarding the financial sector plunged Nigeria into its current predicament with the help of other state and non-state actors.

How long will the government continue to thin out the patience of Nigerians? I do not support violence in any way, but to avoid a state where Nigeria would be thrown into a riot like Sri Lanka where protesters stormed the office of Prime Minister Ranil Wickremesinghe in Colombo because they were struggling with daily power cuts and shortages of basic essentials of life such as fuel, food and medicines while inflation was running high at over 50%. There needs to be an intervention now with the top stakeholders involved, including the CBN, FG and the banks

We do not want a case like that of Sri Lanka where the PM told the military to do “whatever is necessary to restore order and was forced to declare a state of emergency after months of protest on the economic crisis.

Although there was a closed-door meeting between President Buhari and Governor Emefiele on Monday, February 13, the outcome of the meeting is unknown, but we hope it yields something more meaningful and noticeable because the streets are not smiling.

Post Script

At the time this report was published, President Muhammadu Buhari had extended the validity of the old 200 naira note till April 10.



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