Economy
Redesign Gone Wrong? – Costly Cashless

How does the central bank retrieve 84.5% of a country’s currency in circulation in just 90 days? This was one of the many questions seemingly begging for answers when Nigeria’s apex bank announced its plan to redesign the three higher value notes of the naira (N200, N500 and N1,000) on October 26, 2022.
Fast-forward three months and three weeks (a week before the general elections), and a majority of Nigerians are now confronted with a shortage of naira notes that is proving disruptive to lives and livelihoods.
Given the analyst consensus that a 90-day window was simply insufficient to complete the project, it is difficult to conceive a scenario where the Central Bank of Nigeria (CBN) did not anticipate the challenges which have accompanied this transition period.
President Muhammadu Buhari, in his address to Nigerians on February 16, 2023, said… “I am not unaware of the obstacles placed on the path of innocent Nigerians by unscrupulous officials in the banking industry, entrusted with the process of implementation of the new monetary policy. I am deeply pained and sincerely sympathise with you all over these unintended outcomes.”
In what appears to be a clear case of buck-passing by the federal government, the blame is being laid squarely on the banking industry’s purported failings and not any lapses in the policy’s design or hasty execution.
Depending on whom you ask, a performance appraisal of the CBN’s execution of the redesign project would range from grossly unprepared to poorly perceived.
In our opinion, the CBN failed to do enough through the media (television, radio, newspapers, new media) to effectively sensitise the public, particularly the rural dwellers, and manage expectations.
Most Nigerians assumed a simple exchange of old Naira notes for new ones. However, if we are to believe claims by the Kaduna State Governor, Nasir El-Rufai, the CBN printed circa N400 billion in new notes, leaving a shortfall of N2.3 trillion.
So, while the exercise has reportedly reeled in 80% (N2.1 trillion) of the N2.7 trillion held outside the banking system thus far, the average Nigerian is once again confronted with a test of resilience. Cash has become commoditized, hoarded by many, and now commanding outrageous premiums of up to 20-30% at Point-of-Sale (PoS) outlets.
The Road to Perdition is Famously paved with Good
Public outrage has degenerated into violent protests in some cities, with incidents of vandalism and arson at several banks’ facilities – and PoS outlets. The cash crunch and the uncertainty surrounding the policy are fanning a long-simmering fire of public resentment, triggered by deteriorating economic conditions and recently exacerbated by unending petrol shortages.
The result has been a significant loss of manhours, logistics constraints to many businesses and possible threats to the successful execution of the general elections.
The CBN, when launching the redesign project, outlined the objectives clearly. Perhaps its most compelling arguments centred on the need to combat terrorism and reduce counterfeiting.
The others largely revolved around driving the cashless policy through a shift away from cash and toward increased adoption of digital banking channels for transactions. This was underscored by a need to deepen financial inclusion (currently at 64%) and drive an efficient payment system that would improve the efficacy of monetary policy tools in combating inflation.
While the design of the policy gave room for underhand dealings by a privileged few, where the banking industry has really fallen short is in the capacity of the current digital payment infrastructure, which was already plagued by ‘transaction failures’ and an apparent inability to implement instant refunds, to handle the surge in transaction volumes.
For context, in the five years leading up to 2021, electronic payment surged by 386% to N272 trillion, accounting for over 94% of the entire value of transactions in Nigeria’s banking system. Financial institutions also responded accordingly by upscaling digital infrastructure to support the increasing adoption of electronic banking.
Recently, the Nigeria Inter-Bank Settlement System (NIBSS) reported a spike in the value of total cashless transactions in Nigeria to N39.58 trillion in January 2023 – a year-on-year increase of 45.41% – largely on the back of the CBN’s redesign and cash withdrawal policy.
Nevertheless, on evidence, the abrupt shift to electronic payments, which the current cash shortage has necessitated, has overwhelmed the banking industry’s digital payments infrastructure.
Nigerians are currently grappling with an unprecedented rate of electronic transaction failures. To further complicate matters, many transactions have not only failed, but refunds are taking days, even weeks in some instances, leaving many stranded and constraining commercial activity.
Unintended Consequences
The hardest hit by the policy have been the most vulnerable members of the population (the poor, the unbanked and the rural dwellers).
Nigeria is still a largely cash-dependent economy, with informal economic activity accounting for approximately 65% of GDP and being dominated by Micro, Small and Medium Enterprises (MSMEs). These MSMEs account for up to 96% of businesses and 86.3% of the national workforce. These are mostly cash-based businesses – particularly the micro-enterprises, which account for 99.8% of Nigeria’s 37.1 million MSMEs.
Given the low levels of education and exposure of a significant number of Nigerians in this category, many of whom live in rural areas with inadequate or non-existent telecommunications infrastructure, a quick and seamless transition to digital payment channels was always unlikely.
In addition, while mobile phone ownership in Nigeria is estimated at 81% by Enhancing Financial Innovation & Access (EFinA), internet penetration is still a mere 44.3%, as 60% of Nigerians live in rural areas where network outages were widespread even before the latest wave of transaction failures, and coverage was often non-existent, limiting access to traditional banking services. The Unstructured Supplementary Service Data (USSD), launched by banks and TelCos to enable deeper mobile banking penetration in communities lacking mobile data, has also been plagued by network-related setbacks.
The disruption to transactions, trade (domestic & foreign), productivity and all-round economic activity is likely to be significant enough to trigger a contraction in GDP in Q1’23 and possibly a loss of livelihoods for many.
Many cash-dependent businesses are being pushed to the brink. For example, cocoa farmers are currently unable to pay their labourers and transporters, jeopardising production and exports. The cash constraint is also likely to compel consumers to prioritise spending on necessities, leaving many businesses, particularly MSMEs, with decreased sales and heightened credit risks.
Worse still, living standards could decline further, particularly for many rural dwellers, as an inability to access cash could limit access to critical services like healthcare, stoking public discontent even further.
On the flip side, some of the biggest beneficiaries of the current lapses in electronic transactions have been Fintechs like Opay, Moniepoint, Paga, and Kuda, amongst others, which are reportedly far less prone to glitches and charge significantly lower transfer fees.
Whether this is down to lower transaction volumes than traditional banks or the capacity of their digital infrastructure, or both, it remains unclear.
However, getting traditional banks to invest in expanding their digital infrastructure in a period of rapid currency depreciation (most of the required infrastructure is imported) and, just as crucially, enhancing their cybersecurity will be crucial in convincing Nigerians to go cashless.
Some of the tier 1 banks spent an average of 5.4% of their operating expenses on ‘IT and related expenses” in 2021. Raising this expense in the face of shrinking margins would become increasingly difficult, as it is likely to further impinge on profitability.
Final Thoughts
Many contend that the solution to the immediate problem is rather straightforward: print more of the redesigned naira notes while gradually phasing out the old ones.
There is, however, a contrarian view suggesting that agreeing to the aforementioned is not to have a full appreciation of the nuances at play.
Perhaps the most significant takeaway from President Buhari’s recent address is clarity over who makes decisions and who must approve any deviation from the current position on which naira banknotes are legal tender.
The President concludes his address by noting that the policy’s success in minimising the influence of money in politics was a “positive departure from the past”. Given the timing of the policy, many argue that curbing vote-buying was the overarching objective.
The question is whether the long-term benefits of redesigning the naira outweigh the short-term costs and inconvenience of Nigerians being practically compelled to do away with cash. The hope is that the average Nigerian, now confronted with even greater hardship amid the current cost of living crises, is not a mere pawn in a political chess game.
Economy
Unlisted Securities in Nigeria Down 0.41%

By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange opened the week on a sad note after it depreciated by 0.41 per cent on Monday, April 14.
The loss was influenced by the decline in the share price of Central Securities Clearing System (CSCS) Plc during the session by N1.80 to close at N20.90 per unit compared with the N22.70 per unit it closed last Friday.
This brought down the market capitalisation of the trading platform by N7.78 billion to N1.911 trillion from N1.919 trillion as the NASD Unlisted Security Index (NSI) was also pulled down by 13.28 points to 3,264.29 points from the previous session’s 3,277.57 points.
Business Post reports that the bourse crumbled yesterday despite two securities on the platform finishing on the gainers’ chart.
UBN Property Plc appreciated by 19 Kobo on Monday to sell for N2.17 per share versus the preceding session’s N1.98 per share, and FrieslandCampina Wamco Nigeria Plc gained 8 Kobo to settle at N35.63 per unit, in contrast to last Friday’s N35.55 per unit.
Yesterday, there was a 99.7 per cent decline in the volume of securities traded by the market participants to 436,357 units from the 152.3 million units recorded in the previous trading day.
There was also a 99.8 per cent fall in the value of transactions to N10.1 million from N4.6 billion, while the number of deals increased by 218.8 per cent to 51 deals from 16 deals.
At the close of business, Impresit Bakolori Plc remained the most active stock by volume (year-to-date) with 533.9 million units valued at N520.9 million, trailed by Okitipupa Plc with 153.6 million units worth N4.9 billion, and Industrial and General Insurance (IGI) Plc with 71.2 million units sold for N24.2 million.
Okitipupa Plc was the most traded stock by value (year-to-date) with 153.6 million worth N4.9 billion, followed by FrieslandCampina Wamco Nigeria Plc with 14.7 million units sold for N566.9 million, and Impresit Bakolori Plc with 533.9 million units valued at N520.9 million.
Economy
Fears of CBEX Crashing Trigger Looting of Offices in Ibadan, Others

By Aduragbemi Omiyale
Offices of a popular Ponzi scheme operator, CBEX, in Ibadan and a few other places in Nigeria have been looted by some aggrieved investors.
This followed news that the company has shut down its services, with funds of several investors trapped.
Last week, there were speculations that CBEX has crashed following the inability of members to withdraw their funds.
The company quickly dispelled this, noting that it locked the wallets of its investors because of the bonuses gifted members, which must be used for trading before withdrawal.
CBEX, thereafter, assured that from Tuesday, April 15, 2025, members of the Ponzi scheme would be able to withdraw their funds without ease.
However, on Monday, it was gathered that funds in the accounts of investors were wiped off, with a notice to members that they would only be access their money upon the payment of a reactivation fee, a similar pattern of other defunct operators.
“All accounts need to undergo the following verification steps to ensure their authenticity.
“For accounts with funds below $1,000 before any losses, a deposit of $100 is required.
“For accounts with funds exceeding $1,000, a deposit of $200 is required.
“Additionally, please keep your deposit receipts to ensure you can prove the authenticity of the account during future withdrawal reviews,” the message from CBEX stated.
This development shattered the hopes of some investors, triggering a looting spree of the company’s offices.
Some videos of the internet showed moments some irate youth stormed the Ibadan office of the organisation, carting away with some valuables, including office items and others.
Many Nigerians have expressed shock at the level of acceptance of the Ponzi scheme in the country despite the harrowing experience of MMM some years ago.
Business Post reports that some weeks ago, a similar Ponzi scheme operator, Cheersway, went away with investors’ funds after it claimed its platform was hacked.
Just like CBEX, it asked members to pay a reactivation fee of their exact level, which ranges from $50, $150, $400, and $1,000, to have access to their money, but most of those who paid were never granted any access until the company folded up.
Also, those who invested in a new investment vehicle it came up with, TikTok Shop, could not receive their capital and return-on-investment as promised.
It later assured investors that it would move them to a new company established last month known as C&P Capital, noting that they would get their funds back after the new organisation makes profit, probably after two years of operations.
Economy
Naira Strengthens to N1,605/$1 at NAFEM, N1,615/$1 at Black Market

By Adedapo Adesanya
The Naira further strengthened against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Monday, April 14, by N5.83 or 0.36 per cent to settle at N1,605.25/$1, in contrast to the N1,611.08/$1 it was traded in the previous session, which was last Friday.
Equally, the local currency appreciated against the Pound Sterling in the official FX market during the session by N34.55 to quote at N2,056.03/£1 versus the preceding trading day’s value of N2,090.58/£1 and gained N45.66 on the Euro to finish at N1,770.14/€1 compared with the N1,815.82/€1 it was exchanged in the previous trading session.
In the same vein, the domestic currency improved its exchange rate against the Dollar yesterday by N5 in the black market to sell for N1,615/$1 compared with the preceding session’s N1,620/$1.
The pressure on the Nigerian currency eased on Monday as tariffs from the United States were paused, and recent signals showed that the government was complementing efforts to stabilise the market via adequate liquidity and supporting orderly market functioning.
A look at the cryptocurrency market showed a mixed outcome as President Donald Trump of the United States, after pausing sweeping global tariffs, made some concessions on electronics imports.
Further easing concerns was the European Commission, the executive arm of the EU, confirming to hold off on retaliatory tariffs on US goods worth €21 billion until July 14 to allow space for negotiations.
The US Federal Reserve also signalled that a return of the original punitive Mr Trump tariffs would trigger the need for sizable “bad news” rate cuts.
Dogecoin (DOGE) depreciated yesterday by 3.5 per cent to sell at $0.1593, Solana (SOL) which lost 1.2 per cent to trade at $130.99, Litecoin (LTC) went down by 0.6 per cent to $77.74, and Cardano (ADA) dropped 0.3 per cent to close at $0.6405.
On the flip side, Bitcoin (BTC) grew by 1.2 per cent to $85,435.17, Ethereum (ETH) rose by 0.9 per cent to $1,636.35, Ripple (XRP) appreciated by 0.5 per cent to $2.14, and Binance Coin (BNB) went up by 0.08 per cent to $588.65, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
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