Nigeria’s Buhari extends deadline to turn in old banknotes

A note swap has led to cash shortages across the country as Nigeria heads for elections on February 25.

Nigeria’s President Muhammadu Buhari on Thursday gave approval to the central bank to extend the deadline to turn in some old banknotes until April 10 after cash shortages stoked anger before presidential and parliamentary elections later this month.

Last year, Nigeria’s central bank decided to start circulating newly designed 1,000 ($2.17) 500 ($1.08) and 200 ($0.43) naira notes. The deadline to turn in old notes has already been extended once to February 10, after which they would no longer have been legal tender.

But the new notes have been in short supply, leading to long queues and chaotic scenes at banks across the country. Most of Nigeria’s economy is still informal and many people use cash for transactions because they do not have bank accounts.

Buhari said in a television broadcast that old 200-naira notes would continue to circulate in the economy alongside new 1,000, 500 and 200 notes until April 10.

But the old 1,000 and 500 notes could only be swapped at the central bank and “designated points”, he said.

The comments contrasted with last week’s Supreme Court interim ruling that said all old notes remain legal tender until it hears a challenge brought by some state governments.

Buhari defended the initiative, saying it would lead to greater transparency in financial transactions, curb money laundering and reduce the money supply in the economy.

“Notwithstanding the initial setbacks experienced, the evaluation and feedback mechanism set up has revealed that gains have emerged from the policy initiative,” said Buhari.

Some politicians have criticised the timing before February 25 elections, as campaigns are funded by cash that is mostly hard to trace.

Local media reported on Thursday that some angry citizens had vandalised cash dispensing machines at some banks in southern Nigeria as they protested against the cash shortages.