Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), pointed fingers at his predecessor, Godwin Emefiele, for the ongoing naira scarcity in certain regions of the country.
The blame is centered around a controversial redesign of the N200, N500, and N1000 naira notes implemented by Emefiele’s leadership in October 2022.
According to Cardoso, a critical flaw in the implementation of the naira redesign policy is responsible for the prevailing cash scarcity.
Cardoso, acknowledging what he referred to as “glaring defects” in various CBN policies, announced a comprehensive review initiative during the launch of the World Bank Nigeria Development Update in Abuja on Wednesday.
The objective of this review is to create a clear set of rules and procedures for navigating the Nigerian money market.
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“We are taking a thorough look at all our policies implemented over time. This review aims to produce an elegant document outlining clear rules and procedures for navigating the Nigerian money market”, Cardoso told the audience at the launch of the World Bank Nigeria Development Update in Abuja.
Addressing the cash crunch plaguing Nigerians, Cardoso identified the poorly executed naira redesign as the primary culprit.
“The apprehension surrounding the policy’s end date, well before the third quarter, triggered widespread hoarding. Many feared the old notes would lose legal tender status, prompting them to hold onto their cash,” he stated.
The CBN governor said the Supreme Court’s recent ruling upholding the validity of the old notes beyond the initial deadline will alleviate apprehensions and incentivize individuals to release their hoarded cash into circulation.
On the current naira scarcity, Cardoso disclosed, “Unfortunately, the history of that lies with the naira redesign policy and coming to the end of the year, way before the third quarter, there was a lot of apprehension with respect to where this was all going to end; and whether the old currency would no longer be good for legal tender and many started hoardings. This is really what happened.
“Happily, Supreme Court has decided that the currency will be valid post-end of the year,” he affirmed.