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follows: to rein in counterfeiting, promote a cashless economy by limiting the amount of the new banknotes that can be withdrawn, reduce the large quantity of dirty notes circulating in the economy, discourage hoarding, curb crimes like kidnapping and terrorism, and head off illicit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.
Flutterwave has distanced itself from reports claiming the federal government has approved a $75 million investment in the company as a precursor to a public listing.
In a statement, Flutterwave dismissed the reports as “inaccurate,” specifically refuting claims that it is on the verge of a $250 million Initial Public Offering (IPO).
The denial follows a flurry of local media reports on Monday, sparked in part by a now-deleted social media post from a special assistant to President Bola Ahmed Tinubu.
Flutterwave has said it has no knowledge of a reported $75 million investment by Nigeria’s federal government, pushing back against local media reports that suggested the deal had been approved as part of the company’s path toward a public listing.
Earlier reports on Monday, including a now-deleted tweet from a special assistant to President Bola Ahmed Tinubu, stated that the president had authorised an investment of $75 million in the payments company through the Ministry of Finance Incorporated (MoFI).
Flutterwave’s spokesperson clarified the company’s position stating that, “Flutterwave is not in any way close to an IPO, and they have made no announcements regarding a listing or fundraising tied to an IPO as described.”
The confusion highlights the intense scrutiny surrounding the unicorn, which was valued at over $3 billion during its 2022 funding round.
While Flutterwave has long been touted as the torchbearer for African tech on the global public stage, the company appears to have pivoted toward a more conservative timeline.
The reports also indicated that the startup was preparing to raise up to $250 million in an initial public offering.
CitiTrust Financial Services Limited, the parent company of Osun-partly owned LivingTrust Mortgage Bank, has approached the Court of Appeal sitting in Lagos, following the company’s conviction at the Federal High Court, Lagos, over alleged fraud and illegal financial operations.
CitiTrust, is challenging the conviction and asset forfeiture order handed down by the Court in the case brought the Economic and Financial Crimes Commission (EFCC).
EFCC accused it of money laundering, illegal financial operations, and operating a Ponzi scheme.
Federal High Court, had ordered the forfeiture of the firm’s assets to the federal government of Nigeria, citing evidence of unlawful financial activities.
CitiTrust is fighting back according to the hearing notice No. CA/L/571/2025, issued on April 15, 2026, the appeal against the federal government, will be heard at the Court of Appeal complex in Tafawa Balewa Square, Lagos.
The matter, listed before Court 1, will first address a motion by the appellants seeking leave to file their appeal out of time.
Oyetola Muyiwa Atoyebi (SAN), counsel to the appellants, in a motion dated September 23, 2025, argued that procedural delays necessitated the application.
He explained that although the Record of Appeal was transmitted on May 26, 2025, the defence could not file its Brief of Argument within the stipulated 45 days due to time constraints and competing professional obligations.
Atoyebi further noted that the appellants’ brief exceeds the 35-page limit prescribed under the Court of Appeal Rules, 2021, by three pages, requiring the court’s permission for its adoption.
The appellants are therefore seeking the leave of the court to file and serve their Brief of Argument out of time, an order extending the time for filing, and an order deeming the already filed brief as properly filed.
The EFCC had earlier secured a conviction against CitiTrust and its subsidiaries, CitiTrust Asset Management Limited and CitiTrust Holding Plc, over alleged fraudulent financial operations.
It would be recalled that in a ruling delivered by Justice Friday Nemakonam Ogazi of the Federal High Court, Lagos, the judge held that there was overwhelming evidence linking the firms to unlawful activities.
The court found that one of the entities was not duly registered with regulatory authorities, including the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC), describing the operations as illegal despite corporate registration.
Relying on Section 12 of the Proceeds of Crime (Recovery and Management) Act, 2022, the court ruled that the EFCC had established, on a balance of probabilities, that the assets were proceeds of unlawful activity.
Justice Ogazi also invoked provisions of the Advance Fee Fraud and Other Fraud Related Offences Act and the Companies and Allied Matters Act (CAMA), holding that the corporate veil could be lifted where fraud is alleged.
“The law is that when issues of fraud arise, the corporate veil must be lifted. Statutory provisions cannot be used as a refuge to justify illegality,” the court held.
The court subsequently ordered the final forfeiture of CitiTrust-linked assets, forfeiture of shares held in LivingTrust Mortgage Bank Plc, compensation of investors from recovered funds, and transfer of any balance to the Federal Government.
The anti-graft agency had also declared some executive directors of the firm wanted, alleging that they are currently on the run.
Federal court in Lagos has suspended the enforcement of Nigeria’s most comprehensive framework for regulating digital lending apps.
On April 15, Justice Ambrose Lewis-Allagoa of the Federal High Court in Lagos granted an interim injunction blocking the enforcement of the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations 2025, better known as the DEON Regulations.
The order followed an urgent ex parte application filed the previous day by the Wireless Application Service Providers Association of Nigeria (WASPA Nigeria), the industry body representing wireless application service providers operating mainly within the telecoms ecosystem.
The suit targets twelve specific provisions of the text, covering licensing, sanctions, compliance obligations and data-handling rules, according to court documentation published by Lawyard.
Until the next hearing on April 27, 2026, the regulator cannot impose sanctions, enforce compliance directives, or issue new instructions to WASPA members.
The judge also barred the Federal Competition and Consumer Protection Commission (FCCPC) from interfering with the ongoing commercial operations of association members.
The case pits two actors whose respective mandates the Nigerian legal framework has never clearly separated.
On one side stands the FCCPC — the federal agency established in 2018 to enforce consumer protection and competition — which gazetted the DEON Regulations on July 21, 2025, under sections 17, 18 and 163 of its founding Act.
In a press statement dated September 3, 2025, Tunji Bello, executive vice chairman, FCCPC, justified the rules by citing “a long history of complaints” involving exploitative practices, data breaches, abusive debt recovery, and harassment.
On the other side, WASPA Nigeria contests the very legitimacy of the FCCPC’s intervention, arguing that services tied to telecoms — airtime credit, data loans, mobile-financing products — fall exclusively under the Nigerian Communications Commission (NCC), the telecoms regulator created by the Nigerian Communications Act of 2003.
In the affidavit deposed by Ayo Stuffman, the association contends that the FCCPC is acting ultra vires and creating a regulatory regime parallel to the NCC’s.
A jurisdictional war that stretches far beyond a procedural dispute
The conflict is not limited to a question of legal boundaries. It strikes at the commercial core of the market: who collects the licensing fees, who sets the operational conditions, who governs the financial products embedded in telecom networks.
Nigeria’s consumer credit stock reached 3.82 trillion naira at the end of December 2024, up 21.27% on September, according to Central Bank of Nigeria (CBN) data relayed by The Cable and AFP.
In the fourth quarter of 2024 alone, personal loans disbursed amounted to approximately 470 billion naira.
A growing share flows through mobile applications and telecom-embedded lending products — including MTN’s MoMo Airtime Lending, operated by the country’s largest telecom operator.
If the court validates WASPA’s position, these products fall outside the FCCPC’s scope and come under the sole authority of the NCC, a regulator historically less active on consumer protection issues.
Available data on demand illustrate the social stakes. Between 2021 and 2023, the FCCPC recorded more than 11,000 consumer complaints for harassment, data abuse and unethical debt recovery practices, according to the agency.
The number of lending applications approved by the FCCPC rose from 269 in September 2024 to 408 in March 2025, while 47 apps were delisted and 88 were placed on the watchlist, according to data compiled by AFP and OneSafe.
The DEON Regulations were meant to introduce interest-rate caps, precontractual disclosure obligations, continuous supervision of recovery practices and fines of up to 100 million naira per violation, according to Legit.ng. The compliance deadline was set for January 5, 2026, and the FCCPC had issued written compliance notices to operators with an April 16 deadline, according to WASPA’s affidavit.
It is precisely this enforcement pressure that triggered the legal challenge.
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