Nigeria’s About Turn on Currency Changeover

The Central Bank of Nigeria has halted its naira redesign programme, 10 days after the Supreme Court ruled that it hadn’t given sufficient notice to the public to exchange the old notes for new.

Despite the CBN’s assurances that there were enough new notes in circulation, there evidently weren’t – with shortages resulting from the transition from old banknotes to new leading to hardship, protests, violence and a hit to the economy. The digital banking network was also overwhelmed as a flood of transactions shifted to electronic payments.

The CBN had originally set 31 January as the final date by which all old notes (of the N200, 500 and 1,000) had to be exchanged. This was extended by the government to 10 February and then by a further 60 days, but, in a ruling in early March on a case brought by 16 Nigerian states, the Supreme Court extended it to 31 December 2023.

The effects of what has been described as the 'botched' changeover led to businesses closing and left millions unable to withdraw their money. The amount in currency in circulation is reported to have decreased 60% year-on-year in January, and the Nigerian economy is estimated to have taken a hit of 20 trillion naira ($43 billion), according to the Lagos-based Center for the Promotion of Private Enterprises.

Following the Supreme Court ruling, the CBN confirmed that the old notes remain legal tender, and is reported to now be releasing larger amounts of both new and old notes to commercial banks, which are increasing cash limits and opening at weekends to reduce long waiting times.