According to Governor Yemi Cardoso of the Central Bank of Nigeria (CBN), the mishandled execution of the naira redesign program is the cause of the current cash shortage.
The head of CBN declared a thorough review effort and admitted the “glaring defects” in a number of CBN policies.
He declared, “We are carefully reviewing every policy we have put in place over the years.”
Cardoso delivered a speech in Abuja during the World Bank Nigeria Development Update launch.
According to him, the goal of the policy review is to create a sophisticated document that will clearly define the guidelines and protocols for negotiating the Nigerian money market.
Speaking on the financial crisis that Nigerians are experiencing, Cardoso named the badly done naira redesign as the main culprit.
“The apprehension surrounding the policy’s end date, well before the third quarter, triggered widespread hoarding. Many feared the old notes would lose legal tender status, prompting them to hold onto their cash.
“Unfortunately, the history of that lies with the naira redesign policy and coming to the end of the year, way before the third quarter, there was a lot of apprehension with respect to where this was all going to end; and whether the old currency would no longer be good for legal tender and many started hoardings.
“This is really what happened. Happily, the Supreme Court has decided that the currency will be valid post-end of the year,” he said.