The year 2023 witnessed a series of bold policy changes by the Central Bank of Nigeria (CBN), impacting various segments of the economy, according to TheCable. From the redesign of the naira to the liberalization of the foreign exchange (FX) market, the CBN’s actions stirred economic turbulence throughout the year.
**Naira Redesign Policy:**
One of the major highlights was the naira redesign policy, announced by former CBN Governor Godwin Emefiele. The policy aimed to control money supply and combat illicit financial flows. However, chaos ensued as citizens were directed to deposit old notes in banks before January 31, 2023, leading to violence and disruptions. The supreme court extended the deadline, and later, the CBN, under a new government, declared both old and new notes legal tender indefinitely.
**Liberalized FX Market:**
In June 2023, the CBN unified all FX market segments into the investors & exporters (I&E) window, introducing a willing buyer, willing seller model. The policy led to the devaluation of the naira, increased volatility, and widened the gap between parallel and official rates, exacerbating inflation.
**FX Ban on 43 Items Lifted:**
Amid FX market volatility, the CBN lifted the ban on 43 items previously restricted from accessing forex. The decision aimed to boost liquidity but followed the initial restriction in 2015 to reduce demand for products that could be locally produced.
**Cash Withdrawal Limits:**
The CBN initiated cash withdrawal limits in January 2023, directing banks to ensure weekly withdrawals by individuals and corporate entities do not exceed N100,000 and N500,000, respectively. Following public outcry, the bank increased limits and exempted microfinance banks and primary mortgage banks from processing fees.
**Contactless Payment Limits:**
In June 2023, the CBN set daily transaction limits of N50,000 for contactless payments to encourage cashless transactions. Transactions above this limit would require verification to mitigate potential risks.
**KYC Procedures:**
Commercial banks were directed by the CBN in June 2023 to collect and verify social media handles as part of their know-your-customer (KYC) procedures. The objective was to enhance customer identification and prevent financial crimes and terrorism.
These policy changes, described as bold by some, have left a lasting impact on Nigeria’s economic landscape, affecting households, businesses, and the overall economic outlook.
