Despite a chaotic naira swap policy, the Central Bank of Nigeria (CBN) has started counting down to February 10 when it is anticipated that the old N1,000, N500, and N200 notes would stop being considered legal tender.
This is coming amid complaints that the new naira notes are still not fully in circulation despite the extension of the deadline from January 31 to February 10, and President Muhammadu Buhari’s plea with Nigerians to give him seven days to resolve the cash crunch.
A check on the apex bank’s website by theeconomyng.com on Saturday revealed the Bank’s countdown timer widget indicating 5 days and a few hours left to the deadline.
“The present series of N200, N500, and N1,000 notes remain legal tender until deadline of 10th February,” the CBN said.
The apex bank urged Nigerians to “deposit old notes at these FINANCIAL TOUCH POINTS”. A click on the financial touch points pops up a search engine for locations and the financial institutions.
Indeed, Nigeria’s attempt to replace its high denomination currency notes has descended into chaos, with long lines of people forming outside cash machines and fights brout inside banks as customers demanded access to their own money.
Lengthy queues are still visible at ATMs across Lagos, Nigeria’s economic capital, as the failure of the authorities to print enough of the new notes has left lenders struggling to meet demand.
Many Nigerians have visited their bank branches for five days in a row to try to get hold of the new notes with no success. Videos circulating on social media showed customers stripping to their underwear at bank branches as frustration mounted over the currency scarcity.
The CBN said in October that the N200, N500 and N1,000 notes would be replaced with new designs it claimed would be more secure. The old notes were due to be taken out of circulation on January 31, but the unavailability of replacements led to the deadline to switch being extended until next Friday, leaving Nigerians struggling to access money in an economy still largely reliant on cash for most transactions.
“We urge [people] to exercise patience as the Nigerian central bank is working assiduously to address the challenge of queues at ATMs,” the central bank said in a statement, acknowledging the chaotic rollout.
President Muhammadu Buhari on Friday asked Nigerians to “give him seven days to resolve the cash crunch”. But he also blamed banks for being “inefficient” and “only concerned about themselves”.
“Even if a year is added, the problems . . . won’t go away,” he said, adding that he had been reassured by the central bank that it was capable of supplying enough notes. The bank has already collected almost N2 trillion in old currency.
Investigation by theeconomyng.com found that many banks were not supplied with enough of the new notes to meet demand.
Subsequently, most banking agents, popularly known as Point of Sale (PoS) operators, who typically supply cash in remote areas, have run out of cash. The usual response from PoS operators is “no cash”.
The few that were able to lay their hands on cash, majorly sourced from petty traders, have jacked up their commissions. A withdrawal of N5,000 used to attract a charge of N100; now agents are asking for N500.
And while the central bank is encouraging Nigerians to use other channels, such as cards and electronic payments, it is understood many banks do not have the infrastructure to scale up. Nigerians have been lamenting failing electronic transactions because of the volume increases which banks did not prepare for.
The currency crisis comes ahead of the presidential and parliamentary elections to be held on February 25. Bola Tinubu, presidential candidate for the ruling All Progressives Congress (APC), said at a recent campaign event that unnamed opponents were trying to use the controversy over the new naira to sabotage his campaign.
Analysts said the currency redesign had disrupted some politicians’ plans to induce voters with cash bribes they had stowed away ahead of the elections. CBN Governor Godwin Emefiele said: “There were multiple objectives that were sold to the president. At the core of it was the idea that this could help secure the election from vote-buying. They convinced the president that a lot of people had piled up money to buy votes during the election and that the best way to deal with that was to do the change.