It is Tuesday, the 31st of January 2023, the initial deadline given by the Central bank of Nigeria to end the circulation of old naira notes. Yet, many Nigerians are yet to get their hands on the new notes. 35-year-old provisions trader Mummy Ola who owns a corner shop in the heart of Surulere, Lagos, Nigeria, has only seen the new naira notes once since its rollout. And even then, it was for a brief moment. A customer had brought the newly designed 500 naira note to buy some milk, in January, two months after its official rollout. A few minutes later, it was given to another customer as change for goods they bought. It has been three weeks since she saw any of the notes. 

Mummy Ola’s tale is similar to that of Esther’s, a Lagos-based creative, who first saw the notes after she got pepper from a tomato trader in mid-January, two weeks before the initial deadline for the circulation of old naira notes. A few seconds later, she went to buy more pepper from the pepper seller with the same 200 naira note. “If I have seen it from a pepper seller, surely I would see it soon again,” she thought. But Esther has not held any denomination of the new naira notes since then.

It is no surprise that the new naira notes rollout is meagre in circulation a few days before the deadline. After all the initial rollout was off to a sloppy start. However, the abrupt rejection of the old notes and unavailability of the new naira notes has left many Nigerians with limited options for monetary transactions. Last week several banks announced that they would stop collecting old naira notes on the 27th of January. And this led to a host of other institutions applying this same rule. “My church sent a message to our group chat stating that no one should bring old Naira notes to church on Sunday the 27th because banks were already rejecting the old notes,” said Esther. The idea was to get people in a state of urgency to return their old naira notes. Some banks remained open over the weekend to allow people to come in and exchange old notes for new ones. However, banks do not have enough new notes to circulate, leaving many stranded. 

Nigeria is a cash-dependent country. According to the World Bank’s Global Findex Database, cash remains the preferred method of payment in Nigeria. In 2012, the Central bank of Nigeria implemented the cashless system to develop and modernize Nigeria’s payment system, with more efficient transaction options and greater reach. Moreover, fintechs have been bullish on Africa’s largest economy for years, with over 200 fintech startups in 2022.  However, the cashless trend has barely caught on. According to an Enhancing Financial Innovation & Access survey, only 22 percent of respondents are aware of mobile money, and only four percent used it. This is why when 22-year-old Margaret decided to get noodles from the mallam down her street on the 28th of January with the old naira note, and he told her to transfer the money instead, it shook her. “I was laughing because I did not know the day when I would make a 480-naira transfer to the corner shop owner next to my house would come so soon,” she says. While this is not what many Nigerians want to hear right now, neither does it help the current cash flow situation, this delayed circulation seems to be leading to a new wave and alertness for a cashless system. 

A few days ago, Cowry-wise announced via its Twitter handle that its touch-and-pay system, a payment infrastructure used for contactless payment cards used on buses and ferries, is now available for the danfo buses, a privately owned minibus or van used to carry passengers. The danfo is characterized by its bright yellow colour, and loud conductors, and is an affordable means of transportation for the average Nigerian. The touch-and-pay system has been effective with the Lagos state BRT system, helping make 3.5 million monthly contactless transactions on buses in four years. Making it available in a decentralized system such as the danfo not only offers commuters a better way to move around the city at this time but also propagates the cashless system even further down the citizen chain, especially at this time. Perhaps, this announcement is unrelated to the delayed naira circulation. However, it could not have been more perfect timing. If this system works fine, it will be a very active step towards achieving what many fintechs have been tuning for years, banking the unbanked. It might be too early to say the sparse circulation of the new naira notes is causing a change in transactional behaviours. But it is worth noting that it has stirred up a conversation for cashless systems. 

Although, the CBN finally bowed to pressure from concerned Nigerians and shifted the deadline for the exchange of old notes to the 10th of February, which gives them just twelve days to circulate the new notes to over 250 million Nigerians. If the new notes continue to tarry, at least cashless systems have made an impression on many Nigerians and the necessity thereof. 

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