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Nigeria’s central bank has extended the timeline to swap out its old currency for redesigned notes after the change triggered a cash shortage. The knee-jerk decision by authorities forced businesses to close, leaving millions unable to withdraw their money
Nigeria’s central bank has extended the timeline to swap out its old currency for redesigned notes after the change triggered a cash shortage. The knee-jerk decision by authorities forced businesses to close, leaving millions unable to withdraw their money.
The Central Bank of Nigeria announced recently that the old notes of 200 nairas (43 U.S. cents), 500 nairas (US$1.08), and 1,000 nairas (US$2.16) will remain legal tender until December 31. The extension was meant to comply with a directive from the country’s Supreme Court, which ruled against the note ban saying that the program’s implementation broke the law.
Presently, some reports indicate that both old and redesigned notes were still not available for thousands queued at banks in Nigeria’s capital, Abuja. There has been a cash shortage since early February. Sources point out there are not enough redesigned notes printed to replace the old ones in the cash-reliant country. In Nigeria, digital payment services are usually not reliable and only 45% of adults have a bank account.
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Analysts say the cash crisis has cost the Nigerian economy an estimated 20 trillion naira (US$43 billion) because of the crippling of trading activities. It has stifled the informal economy and contraction of the agricultural sector. The situation has further squeezed people and businesses in the country where 63% of the population is poor, 33% is unemployed and the size of the informal economy is large.
