Old Nigeria naira notes of N200, N500, and N1,000 will remain legal tender in Nigeria indefinitely.
This is the latest announcement from the Central Bank of Nigeria (CBN) as naira scarcity continues to affect the country’s economy.
On Tuesday, the CBN, in a statement, announced that it has extended “the legal tender status deadline of the old design of N200, N500, and N1,000 denominations ad infinitum” or forever.
In a statement, the bank’s Director of Corporate Communications, Isa AbdulMumin, stated that the CBN will continue to accept both the old and new designs of all banknotes from commercial banks.
“The general public is under an order to continue to accept all Naira banknotes (old or redesigned) for day-to-day transactions and handle these banknotes with the highest care to preserve and protect the lifecycle of the banknotes,” he added.
He mentioned that the bank’s decision to extend the use of old and new designs together indefinitely is to prevent a repeat of past experiences, following global practice.
A week ago, Nigeria’s top bank tried to assure Nigerians that the country had enough naira notes, so there was no need for people to withdraw money out of fear.
However, this announcement was not enough to prevent panic among Nigerians, leading to a surge in withdrawals and creating a kind of artificial scarcity.
Why the panic and artificial scarcity?
Under President Muhammadu Buhari and former CBN Governor Godwin Emefiele, the Nigerian government introduced new N200, N500, N1,000 notes towards the end of 2022, announcing that the old notes would no longer be legal tender by the end of December of the same year.
At that time, Emefiele argued that the decision would help the country fight inflation, kidnapping, and vote-buying in the 2023 general election, which the country was planning a few months before that time.
This decision led to a scarcity of naira notes, with people buying and selling the currency as if it were a commodity.
The country experienced violent protests in some parts as frustrated Nigerians took to the streets in disagreement.
The Supreme Court had to issue an order to stop the top bank from applying its deadline for the use of old banknotes.
Tinubu, who had just taken office at that time, promised Nigerians on his inauguration day that his government would review the policy and “treat both currencies as legal tender.
CBN later extended the use of the two currencies until the end of December 2023 when the old notes would stop being legal tender.
However, now, the new CBN Governor, Yemi Cardoso, has stated that whether it’s old notes or new notes, all of them are legal money in the country, and it will remain so indefinitely.
