As the Naira crisis worsened, the total amount of money in circulation in the Nigerian economy fell from 3.3 trillion naira to 1.54 trillion naira, according to documents from the Central Bank of Nigeria.
This was due to a huge shortage of new naira banknotes, while a dire shortage of the old currency caused great hardship and suffering for millions of Nigerians and left some stranded.
According to the latest central bank documents obtained by one of our correspondents, the total money supply has contracted by 53.33% in three months.
Specifically, negotiable currencies fell from 3.3 trillion naira on 31 October 2022 (weeks before CBN implemented the Naira style policy) to 1.54 trillion naira on 31 January 2023.
The 53.33 C-in-C decline followed large deposits of old N1000, N500 and N200 banknotes by bank customers ahead of the controversial February 10, 2023 CBN deadline.
CBN Governor Godwin told Emefiele that he said one of the targets was one of Naira’s goals.
The policy of the design was to remove the currency from bank vaults, which she set at N2.7 trillion.
He said it would be difficult for monetary policy initiatives to affect an economy with so many people outside the banking system.
The latest figures are taken from a report presented by CBN Vice President Folashodun Shonubi at a forum held last week in Abuja.
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.
The CBN had earlier said the old notes would cease to be regarded as legal tenders by January 31, 2023.
However, the deadline was extended to February 10 with a grace period of seven days for old notes to be deposited in banks.
The Supreme Court sitting in Abuja on Wednesday adjourned a hearing in the suit seeking the suspension of the naira redesign policy to February 22, 2023.
Some state governments have filed a suit against the Federal Government seeking a restraining order to stop the full implementation of the naira redesign policy of the CBN.
In a new development, nine states have filed to join the suit initially filed by Kogi, Kaduna and Zamfara states.
The states are Katsina, Lagos, Cross River, Ogun, Ekiti, Ondo and Sokoto states bringing the new total of plaintiffs to ten.
On the other hand, Edo and Bayelsa have filed to be joined as respondents.
The seven-man panel led by Justice John Okoro ordered them to amend their processes to be heard as one.
Meanwhile, pending the hearing of the suit at the Supreme Court on Wednesday, the order suspending the February 10 deadline for the phasing out of old notes subsists amid a conflicting CBN directive to banks and the public.
Meanwhile, the President, Major General Muhammadu Buhari (retd.), had said the old N500 and N1,000 banknotes were no longer legal tender in the country.
He, however, directed that the old N200 note should be re-circulated, adding that it would remain legal tender until April 10, 2023.
Buhari appealed to Nigerians to deposit their old N500 and 1000 notes with the CBN.