Nigeria Loses N20 Trillion Due To Currency Redesign: Report

Nigeria's economy is struggling as the new currency redesign policy, which mopped up over 70% of cash in the country, is causing an estimated loss of N20 trillion.

A non-governmental organization, Centre for the Promotion of Private Enterprise (CPPE) explained on Sunday that the new currency has been crippling trading activities and it has become a major risk for the economy.

CPPE's director Dr. Muda Yusuf said, "Millions of citizens have slipped into penury and destitution as a result of the disruptions and tribulations perpetrated by the currency redesign policy, especially the mopping up of over 70 percent of cash in the economy," Punch reported.

Yusuf also stated that "Nigerians have not been this traumatized in recent history" and requested the President of Nigeria Muhammadu Buhari to urgently look into this matter to save the economy as it is "gradually grinding to a halt because of the collapse of payment systems across all platforms."

The director of the organization further explained that the digital platforms are also not performing properly due to congestion, adding that "physical cash is unavailable because the CBN (Central Bank of Nigeria) has sucked away over 70 percent of cash in the economy, and the expected relief from the Supreme Court judgment has not materialized."

"The citizens are consequently left in a quandary," he added. "The banks claimed that the CBN has not officially communicated the Supreme Court judgment to them for any actions."

Yusuf further shared that Nigerians are waiting to hear from the president or the Central Bank of Nigeria on the legal tender status of old currency notes.

Under the currency redesign policy, only three denominations were redesigned out of eight including N200, N500 and N1000. Other banknotes including N10, N20, N50 and N100 won't be redesigned. The new notes were launched on Nov. 23, 2022.

As per CBN, the current N200, N500 and N1000 banknotes were supposed to be circulated in the market till Jan. 31. However, Nigeria's Supreme Court has ruled that old banknotes can be used until the end of this year as not enough notes have been released in the market.

Yusuf explained that despite Supreme Court's order to accept old currency notes, market operators are refusing to accept them due to which Nigerians "continue to groan in the adversity inflicted by the acute cash shortage."

"Since the onset of the cash crisis, the Nigerian economy has lost an estimated N20tn," Yusuf said. "These losses arose from the deceleration of economic activities, crippling of trading activities, stifling of the informal economy, contraction in the agricultural sector and the paralysis of the rural economy. There are also corresponding job losses in the hundreds of thousands."

The director demanded that CBN should officially ask banks and market operators to comply with the judgment and the president should also "publicly empathize with Nigerians on the unwarranted and inexcusable pain and suffering that the currency redesign policy has wreaked on them."

Nigeria is not the only country to do demonetization as previously countries like India, Venezuela, Zimbabwe and North Korea have implemented the same in the past.