Amid the worsening naira crisis, the total amount of currency-in-circulation in the Nigerian economy has tumbled from N3.3tn to N1.54tn, a Central Bank of Nigeria document obtained revealed.
This came as a biting shortage of new naira notes amid an acute scarcity of old currency has inflicted untold hardship and pain on millions of Nigerians, leaving several people stranded.
The latest central bank document, obtained by news correspondents, showed that the total amount of currency-in-circulation fell by 53.33 per cent within three months.
Specifically, the currency-in-circulation fell from N3.3tn recorded on October 31, 2022 (a few weeks before the CBN began the implementation of the naira redesign policy) to N1.54tn on January 31, 2023.
The 53.33 decrease in C-in-C followed bank customers’ huge deposits of old N1000, N500 and N200 notes ahead of the CBN’s February 10, 2023 controversial deadline.
Among other things, the CBN Governor, Godwin Emefiele, had said one of the objectives of the naira design policy was to mop up currency outside the bank vaults which he put at N2.7tn. He said with such a huge amount outside the banking system, it would be difficult for monetary policy initiatives to impact the economy.
Data from a report presented by the CBN Deputy Governor, Folashodun Shonubi, at a forum in Abuja last week revealed this.
He noted that since 2018, the currency-in-circulation had been increasing at an average annualised rate of 18 per cent before the CBN’s redesign policy.
Meanwhile, Emefiele had announced in October last year that the bank would release re-designed naira notes by December 15, 2022.
According to the CBN governor, this was targeted at controlling currency in circulation, curbing counterfeit currency and ransom payments to kidnappers and terrorists.
He noted, “Indeed, the integrity of a local legal tender, the efficiency of its supply and its efficacy in the conduct of monetary policy are some of the hallmarks of a great central bank.
“In recent times, however, currency management has faced several daunting challenges that have continued to grow in scale and sophistication with attendant and unintended consequences for the integrity of both the CBN and the country.