The Central Bank of Nigeria has delayed the phasing out of old high-value banknotes for 10 days.
The decision came after a meeting between President Muhammadu Buhari and the Central Bank Governor, Godwin Emefiele, and followed mounting criticism that millions of people have been unable to obtain replacements, putting business activity and livelihoods at risk.
The 1,000, 500, and 200 naira banknotes, which were set to be withdrawn on 31 January, will now remain in circulation until 10 February.
The redesign of the banknotes was initially announced in October 2019 to tackle counterfeiting and reduce the use of cash in Nigeria’s economy, which is still largely cash-reliant, particularly among the unbanked and rural communities.
However, the bank’s handling of the situation has faced widespread criticism from both citizens and politicians. The central bank only began distributing new notes to commercial lenders last month, leading to a shortage of the new currency and causing issues for those without access to banks to exchange their old notes.
Several politicians, including former Vice President Atiku Abubakar, have called for an extension to reduce the “financial consequences” for citizens.
The Parliament has requested a six-month extension, as Speaker Gbajabiamila threatened arrest for the Central Bank Chief if he persisted in declining an invitation to address the matter.
According to Rafiq Raji, a senior associate with the Africa programme at the Center for Strategic and International Studies think-tank, the currency redesign has also disrupted some politicians’ “vote-buying” plans ahead of the presidential election on 25 February.
He stated that politicians may be reluctant to deposit their old banknotes with banks for fear of raising questions about the origin of the funds, and may also be worried about obtaining enough new notes due to cash withdrawal limits.