E-Financial
CBN Made Critical Mistakes that Doomed its Currency Redesign
By Stephen Onyeiwu
Nigeria has successfully introduced new banknotes on about 10 occasions since independence in 1960. So why has the latest attempt been so controversial and traumatic? And what measures need to be taken to avoid a future debacle?
Godwin Emefiele
Nigeria’s central bank announced the introduction of new banknotes last November, with the changeover to new notes scheduled for mid-December.
The rollout of the policy disintegrated into chaos, amid mounting anger among ordinary Nigerians.
The rollout of the currency change was disastrous. The fallout included:
- Severe shortages of the new banknotes.
- Precipitous declines in business transactions (especially in the informal sector).
- Long queues at bank premises and overcrowded banking halls
- Attacks on bank staff and destruction of bank property, including ATMs that failed to dispense cash.
The policy also led to lawsuits by some state governors against the Central Bank of Nigeria and the Federal Government.
I have identified five factors that marred the redesign policy, most of which could have been avoided by the Central Bank of Nigeria.
Litany of errors
Cost-benefit: An egregious error committed by the central bank was its violation of the principle of cost-benefit analysis. This is a simple rule in economics that implores policy makers to undertake an initiative only when the benefits exceed the costs. One should ask: What were the benefits of introducing the policy? What were the potential costs at the time of implementation?
The central bank justified the redesign policy as follows: to rein in counterfeiting, promote a cashless economy by limiting the amount of the new banknotes that can be withdrawn, reduce the large quantity of dirty notes circulating in the economy, discourage hoarding, curb crimes like kidnapping and terrorism, and head off illicit financial transactions.
It also saw the policy as a way of addressing the huge amount of currency outside the formal financial sector; 85% of banknotes circulate outside the banking system, largely because of hoarding and illicit financial transactions.
And the cost? If indeed the central bank considered the cost, it obviously underestimated it. How would anyone ignore the large-scale disruptions in the economy and loss of productivity that the policy caused, not to speak of the stress and anxiety inflicted on Nigerians?
Communication: Of all the pitfalls that doomed the currency redesign policy, at least as conceived originally, the lack of effective communication about the overarching goals and modus operandi of the exercise was the most devastating.
Nigeria’s central bank threw a basic element of strategic planning and communication to the winds when it failed woefully to communicate and educate the public about expectations, prior to launching the policy. According to strategic planners, a major policy initiative that is not well communicated, from the top of the strategy planning pyramid to the bottom, is bound to fail.
The central bank should have sought the buy-in of major stakeholders, especially the National Economic Council and the National Assembly. The central bank would have had a better chance of avoiding the ferocious push-back it got.
The central bank finally began rolling out a communication plan by late December 2022. But this was too little too late. By then Nigerians had already characterised the policy as decidedly punitive. The narrative that had gained ground was that the change was designed to curtail the ability of politicians to buy votes during the 2023 elections.
This inevitably raised the question of why millions of Nigerians should suffer because of politicians?
The central bank’s mishandling of communication was also manifested in the fact that it failed to issue policy guidelines to commercial banks and the public days after the Supreme Court nullified the bank’s earlier deadline. This has exacerbated the confusion associated with the policy, as merchants and businesses continue to reject the old notes, despite the court’s rulings.
Inappropriate timeframe: The timeframe for implementation was unrealistic and impracticable. By setting a very short timeframe for phasing out the old notes, the Central Bank of Nigeria appeared to have adopted textbook assumptions about how the Nigerian banking system works.
Anyone who has been to a typical commercial bank in Nigeria would know it would have been impossible for the banks to undertake the monumental task of collecting old notes and dispensing the new ones within the one-and-a-half month window originally allowed by the central bank. Overcrowding, chaos, excruciatingly slow service and unnecessary bureaucratic red tape are quite common during normal banking hours. It is not uncommon to observe people with “connection” circumvent queues and obtain preferential access to bank staff. Although Nigerian banks pride themselves as being digitised, a lot of paper-pushing still goes on within the banking system.
The central bank should have considered this fact and allowed for a longer timeframe for implementation.
There was also no persuasive rationale for the rushed implementation of the policy. Neither was the central bank able to explain why the old and new notes could not coexist, a measure the Supreme Court has now mandated the bank to implement.
Conflicting goals and lack of prioritisation: Policy targeting is a major precondition for success. The focus on one unambiguous objective in past redesign policies enabled the central bank to conduct a seamless and less dramatic exercise.
The current redesign policy had too many goals, and it was unclear which one was the target goal.
Identifying target goals enables policy makers to select appropriate instruments for achieving those goals. But when there are too many goals, the danger is that an instrument designed for one goal may undermine another goal.
For instance, the goal of reining in money laundering and illicit financial transactions meant that the Central Bank of Nigeria needed to deliberately restrict access to the new banknotes. But this inflicted unintended hardships on innocent Nigerians who simply wanted to access their hard-earned money.
The central bank should have focused on one major goal. If the goal was to phase out old notes, as the bank is statutorily mandated to do, then the old and new notes could have circulated alongside each other until the old notes were phased out.
A casual announcement that new notes would be circulating from a given date would have been all that was needed. People would not have panicked and rushed to the banks to withdraw money.
Economic headwinds: It is very difficult to implement a major policy initiative that negatively affects people during a period of macroeconomic instability. The central bank policy came at a bad time. Nigeria’s economy is in a shambles, with a 22% inflation rate, 33% unemployment rate – 43% among young Nigerians – and a growth rate of 3%.
These economic challenges have been compounded by a 17.5% interest rate, steep declines in the value of the Naira, and widespread poverty.
Nigerians’ tolerance for economic shocks was already at its limit when the redesign policy was launched. The policy and the confusion that accompanied it tipped them over the edge.
The challenge of credibility
The central bank needs to reestablish its credibility as the “people’s bank,” to reverse a self-inflicted image of an organisation that’s partisan.
The bank has a fiduciary responsibility of catering to the interests of its main “shareholder,” the Nigerian people. But the perception is that the bank lacks independence. To effectively discharge its statutory duties, the Central Bank of Nigeria should initiate a process of re-asserting its independence and regaining the people’s trust and confidence.
Stephen Onyeiwu is professor of Economics & Business, Allegheny College
This article is republished from The Conversation Read the original article.
Benedict Ikechukwu Anekwe, an Enugu-based lawyer, and C.K.C. Idu, a magistrate, have been accused of allegedly conspiring to fraudulently withdraw ₦3.5million from the corporate account of Ohha Microfinance Bank Limited through what the bank described as a manipulated garnishee court process.
Ohha Microfinance Bank is a financial institution based in Enugu, Nigeria, committed to providing accessible and reliable banking services to individuals and small businesses
Ohha Microfinance Bank in a petition dated March 6, 2026 and submitted to the Chief Justice of Nigeria and Chairman of the National Judicial Council, demanded disciplinary action against the lawyer and the magistrate.
In the petition signed by Philip Onwukwe, managing director of the bank, the institution accused Anekwe of “using the instrumentality of the court to steal” from its corporate account.
“We write to you… seeking your urgent intervention and action in respect of this complaint which borders on fraud, stealing and unprofessional conduct of Benedict Ikechukwu Anekwe Esq.,” the petition read.
According to the petition, the controversy began with a judgment delivered on July 11, 2025 by Chief Magistrate O.P. Okoro in Enugu in Suit No. CME/1087/2023, involving Okoye Sunday and Ifesinachi Nnam.
The court reportedly awarded ₦2.5 million in favour of Okoye Sunday.
To enforce the judgment, Anekwe filed garnishee proceedings against 14 banks, including Ohha Microfinance Bank, seeking to attach funds belonging to the judgment debtor, Ifesinachi Nnam.
On July 29, 2025, the court issued an Order Nisi directing banks to attach any money belonging to the debtor.
The order stated that: “All monies in possession of the Garnishees belonging to Ifesinachi Nnam… be attached to satisfy the judgment sum of ₦2,500,000 together with the cost of this garnishee proceedings.”
However, the bank said the order applied strictly to the account of the judgment debtor and not to the corporate account of the bank itself, moreover, the judgement debtor has no financial account with the bank.
“It is crystal clear from the wordings of the Order that the Order Absolute made by His Worship Okoro was made against the account of Ifesinachi Nnam… but not against the corporate account of Ohha Microfinance Bank Limited,” the bank said.
The bank alleged that instead of serving the order on the bank to verify whether the judgment debtor had an account with it, Anekwe allegedly initiated another garnishee action directly against the bank before a different magistrate.
The fresh suit, CME/1554M/2025, Okoye Sunday v. Ohha Microfinance Bank Ltd, was filed before Magistrate C.K.C. Idu, his close associate, after the judgement debtor had filed notice of appeal and got a stay of execution in the previous court.
The petitioner explained that despite the pending appeal and stay of execution, on October 10, 2025, Magistrate Idu granted another Order Nisi attaching ₦3.5 million from the bank’s corporate account held with Ecobank Plc.
The bank said neither the plaintiff nor the judgment debtor had any account relationship with the microfinance institution, wondering how a Magistrate could issue such an order.
“Ohha Microfinance Bank has no business relationship with the judgment creditor and the judgment debtor in the suit,” the petition stated.
It added that both Okoye Sunday and Ifesinachi Nnam “are not customers of Ohha Microfinance Bank Ltd.”
Upon discovering the court order, the bank’s lawyer filed a motion asking the court to set aside the garnishee order, arguing that it was obtained through misrepresentation.
The motion stated that the order wrongly targeted the corporate funds of the bank rather than the account of the judgment debtor.
However, according to the petition, Magistrate Idu refused to vacate the order.
Instead, on February 27, 2026, the magistrate reportedly made the order absolute and authorised the withdrawal of ₦3.5 million from the bank’s account.
The bank further alleged that after securing the court order, Anekwe personally served it on Ecobank and instructed the bank to transfer the funds to his personal account.
“That same day, the learned Chief Magistrate signed the Order Absolute and handed it over to Benedict Anekwe Esq., who rushed to Ecobank Plc and served the order,” the petition stated.
The lawyer allegedly followed up with a written instruction directing the bank to pay the money into his personal account at First Bank of Nigeria instead of a client account.
Ohha Microfinance Bank alleged that the magistrate and the lawyer acted in concert to perpetrate the alleged fraud.
“This is daylight stealing perpetrated by Benedict Ikechukwu Anekwe Esq.,” the petition stated.
The bank further alleged that Magistrate Idu ignored the clear wording of the earlier judgment issued by Magistrate O.P. Okoro, which targeted only the debtor’s account.
It also claimed that both men had previously worked together before the magistrate’s appointment to the bench.
“Our findings reveal that the learned magistrate C.K.C. Idu before his appointment worked together at CIDJAP Legal Department with Benedict Anekwe Esq., hence the reason he connived with him to perpetrate this fraud,” the bank alleged.
The bank has asked the National Judicial Council to investigate the matter and sanction both the lawyer and the magistrate.
It also demanded that the matter be referred to the Legal Practitioners Disciplinary Committee.
“We demand that this matter be referred to the Legal Practitioners Disciplinary Committee for immediate and necessary action,” the petition stated.
The bank further demanded an immediate refund of the ₦3.5 million allegedly withdrawn from its corporate account.
“We further demand that Benedict Anekwe Esq. refund immediately the sum of ₦3.5million he stole from our corporate account,” the petition added.
Efforts to reach the lawyer and the magistrate were unsuccessful, as both failed to answer multiple calls.
They also did not respond to text messages sent to their verified telephone numbers seeking their reactions.
Credit: SaharaReporters
Quest Merchant Bank Limited has successfully met the ₦50 billion minimum capital requirement mandated for merchant banks by the Central Bank of Nigeria (CBN) strengthening the Bank’s capital base and reinforcing its capacity to support Nigeria’s economic transformation.
This milestone reflects investors’ continued confidence in the Bank’s long-term strategy, strong governance, and sustainable growth outlook. It also marks an important step in the Bank’s post-divestment evolution under its new ownership, positioning Quest Merchant Bank with the balance-sheet strength needed to execute its next phase of growth.
With a significantly enhanced capital base, Quest Merchant Bank is now better positioned to underwrite larger transactions and expand its advisory, capital markets, and structured financing capabilities across priority sectors of the Nigerian economy.
The CBN’s recapitalisation directive, which sets ₦50 billion as the minimum capital threshold for merchant banks, is designed to reinforce the resilience, stability, and lending capacity of Nigeria’s financial system.
By meeting this benchmark, Quest Merchant Bank reinforces its standing as a trusted financial partner in infrastructure, energy, manufacturing, and corporate growth initiatives nationwide.
Afolabi Olorode, Acting Managing Director and Chief Executive Officer of Quest Merchant Bank, described the achievement as a defining moment in the Bank’s evolution: “This milestone marks a significant step forward for Quest Merchant Bank. Meeting the ₦50 billion capital requirement underscores investors’ confidence in our strategy and reflects the strength of our governance and franchise.
“With this strengthened capital position, we are equipped to play an even greater role in financing key sectors of the Nigerian economy, enabling private enterprise, and supporting sustainable economic expansion.
“Our focus remains clear. We will continue to continue to help our clients succeed, while serving as a trusted long-term partner in delivering sustainable growth.”
Quest Merchant Bank remains committed to responsible growth, innovation, and delivering strategic financial solutions that empower businesses and institutions across Nigeria.
GCR Ratings (GCR) has affirmed African Export-Import Bank (Afreximbank) international scale long and short-term issuer ratings of A and A2 respectively. The outlook was revised to “Stable” from “Rating Watch Evolving”.
GCR has also affirmed the international scale long term programme rating on the $5 billion Global Medium Term Note (GMTN) Programme of A.
The improved rating reflects GCR’s assessment of a “robust counter-cyclical mandate, underpinned by a strong track record and ongoing preferential creditor treatment (PCT) from shareholders.”
South Africa became the latest country to affirm the Bank’s Establishment Treaty and Preferred Creditor Status when it recently signed the Instrument of Accession to become a full sovereign member of the Bank.
The report continued: “The Bank’s solid capitalisation and diversified funding profile provide significant buffers against emerging credit risks.” The report also acknowledged the Bank’s diverse shareholding base.
The outlook change from “Rating Watch Evolving” to “Stable”, according to GCR, indicates that there is immaterial downside risk related to sovereign debt restructurings.
Commenting on the Rating action, Chandi Mwenebungu, Managing Director and Group Treasurer, Treasury and Markets at Afreximbank said: “We are delighted that GCR has affirmed its credit rating on the Bank and resolved the outlook to ‘stable’, particularly in the light of recent positive credit developments.
“We continue to assert that the Bank’s preferred creditor treatment is enshrined in the Bank’s Establishment Agreement, ratified by all member states. It is not a matter of opinion or convention; it is fact”.
Mwenebungu continued, “It is also pleasing to note that GCR acknowledges the Afreximbank’s strong liquidity and capitalisation, and resilient risk profile. This is testament to the Bank’s financial and operational strength and that it has been able to demonstrate firm resolve in the face of continued macro-economic pressures and a challenging environment.”
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