How CBN Should Respond to Fresh Naira Scarcity

Recent reports of a fresh naira scarcity have emerged in parts of Nigeria, contradicting a recent assurance of the Central Bank of Nigeria (CBN) on the availability of sufficient bank notes.

Development Diaries reports that the CBN had assured Nigerians of sufficient cash stocks in all locations across the country, hence no need for panic withdrawals.

However, a media report has revealed that naira scarcity has resurfaced in Abuja, Kano, Kwara, Sokoto, and Ekiti, with some commercial banks limiting withdrawal amounts for customers, while some refusing withdrawal requests.

There were also reports of point-of-sale (PoS) operators complaining of not having access to lumps of cash.

It is understandable that citizens are worried about the legality of old naira notes because it relates to concerns about the apex bank’s currency redesign programme.

At this point, it must be said that the CBN has not properly communicated its plans regarding the circulation of old and new notes.

If the CBN says the old naira notes will remain legal tender beyond 31 December, 2023, and no longer have a deadline, why then are banks having scarcity issues?

Effective communication by a nation’s central bank is paramount for maintaining stability and confidence in the financial system.

It is worth noting that clear and consistent communication will allow the CBN to convey its commitment to addressing existing challenges and assures the public that appropriate measures are being taken.

In times of uncertainty, citizens should be able to trust in the central bank’s communications knowing that it will help to prevent panic.

Development Diaries calls on the CBN to immediately begin a communications campaign that considers inclusivity and clarifies the reported bank note shortages. For effectiveness, this communications campaign could be carried out at community level, with citizens sensitised to the bank’s messaging against panic withdraweals and rejection of old notes.

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