Nigeria’s President Muhammadu Buhari announced today that old N200 notes remain legal tender till April 10, amid a worsening naira scarcity triggered by the Central Bank of Nigeria (CBN)’s naira redesign policy which has rendered many Nigerians cashless.
“To further ease the supply pressures, particularly to our citizens, I have given approval to the CBN that the old N200 bank notes be released back into circulation and that it should also be allowed to circulate as legal tender with the new N200, N500, and N1000 banknotes for 60 days from February 10, 2023, to April 10, 2023, when the old N200 notes ceases to be legal tender,” Buhari said in a televised nationwide address.
The president also said all existing old N1000 and N500 notes remain redeemable at the CBN and designated points in line with Section 20(3) of the CBN Act 2007. This means that both notes have already lost their legal tender status.
He urged Nigerians “to strive harder to make their deposits by taking advantage of the platforms and windows being provided by the CBN”. Although, there are reports of commercial banks refusing deposits of old notes from customers.
This declaration comes at a time when the fate of the entire naira redesign policy lies in the hands of the Supreme Court. For one, the policy has been trailed by many controversies and led to hardship for most Nigerians.
Read also: Nigerians made to wait as Supreme court adjourns case on Naira redesign till Feb 22
A pending Supreme Court case
Yesterday, the Supreme Court adjourned the hearing of the case brought by ten state governors against the CBN on the now-controversial naira redesign policy to February 22.
The apex court had previously suspended the deadline set by the CBN for the use of the old 200, 500, and 1,000 Naira notes as legal tender pending a ruling scheduled for Wednesday, which has now been adjourned by another week.
The initial ruling was made by a seven-member panel led by Justice John Okoro in response to a request filed by Kaduna, Kogi, and Zamfara States. But at the court session yesterday, Lagos, Katsina, Cross-River, Ogun, Ekiti, Ondo, and Sokoto States were represented in court and sought to be joined as co-plaintiffs in the suit. Bayelsa and Edo States also sought to be joined as respondents.
Recall the old notes were initially due to losing their legal tender status on January 31. However, the unavailability of new notes and backlash from Nigerians forced the CBN to extend the deadline to February 10 for the swap of old currency notes, as approved by President Muhammadu Buhari.
The past weeks have seen long queues inside banking halls and ATM centres across the country, as many cash-strapped Nigerians demand their own money, with banks claiming that they haven’t been supplied with enough currency notes.
Protests have since rocked some cities in the country over the scarcity of the Naira notes, leading to the attack on bank officials and the destruction of bank properties. But bank CEOs have claimed that new naira notes were unavailable in sufficient quantities for rollout to customers.
Boom for e-payment transactions
On the flip side, the cash crisis has sparked a rise in e-payment transactions in the country, the latest data from the Nigeria Inter-Bank Settlement Systems (NIBSS) has revealed. Nigerians spent a total of N38.7 trillion over electronic channels in January 2023, representing a 45% year-on-year increase from N26.6 trillion in January 2022.
NIBSS also revealed that the volume of transactions processed through the NIBSS Instant Payments (NIP) platform in January 2023 was N541 million, representing a 55% year-on-year increase compared with the 348 million recorded in January 2022.
Similarly, total NIP transactions rose by 45.52% year-on-year from N26.65 trillion as of January 2022 to N38.77 trillion as of January 2023.
Also, Point of Sales (PoS) transactions in Nigeria jumped to N807.16 billion in January 2023, a 40.69% year-on-year increase compared to the N573.72 billion reported in January 2022.
While it is true that this figure reflects significant growth, it comes with a dark side. Frustrated by the struggle to get cash from banks, Nigerians turn to PoS merchants who charge high transaction fees, adding more salt to the injury of the already impoverished citizens. Over 133 million people live in multidimensional poverty, according to the National Bureau of Statistics (NBS), and Nigeria’s inflation rate just rose to 21.82%.
But the CBN has vowed to prosecute POS operators who take exorbitant charges on transactions, though how this will play out remains unstated.
Read also: As Nigeria makes herculean shift to cashless society, e-payment transactions record boom
Technext Newsletter
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!
