Nigeria’s President Muhammadu Buhari on Thursday defended the currency swap that has sparked protests and cash shortages, but ordered the small denomination 200 naira note to remain in circulation to ease shortages.
Nigeria has been struggling with a shortage of physical cash since the Central Bank of Nigeria (CBN) began replacing old bills of the local naira currency with new, re-designed ones, leading to a shortfall in paper money.
Nigeria’s cash crisis
Cash shortages have led to violent protests in major cities as angry and frustrated bank customers attacked and vandalized banks and blocked roads.
The weeks-long cash crisis has intensified days before Nigerians go to the polls on February 25 to elect a successor to Buhari who stepped down after two terms in office.
In a national broadcast early Thursday, Buhari described the naira policy as a “positive step back from the past” and said it was a “bold legacy step” towards free and fair elections by helping prevent vote buying.
The President said he was moved by the hardship and pain people are going through because of the cash crisis.
“To ease supply pressure, especially for our citizens, I have given approval to the CBN that 200 old bank notes be released back into circulation,” he said.
Also read: Cash and fuel crisis fuel Nigeria election tensions
The policy has introduced redesigned 200, 500 and 1,000 naira notes.
The old 200 naira bill will be circulated as legal tender for 60 days until April 10 alongside the new note.
Buhari said the old 500 and 1,000 bills should be kept at the central bank.
– Suffer –
The frontrunners in next week’s presidential election have followed accusations of cash shortages, with the ruling Progressive Congress Party and the main opposition People’s Democratic Party blaming each other for the crisis.
The race to succeed Buhari became a three-way battle: Bola Tinubu of the APC, the former governor of Lagos, Atiku Abubakar of the PDP, who was vice president from 1999 to 2007, and Peter Obi of the Labor Party, who emerged to challenge the traditional dominance. from APC and PDP.
Buhari said his administration “will continue to evaluate its implementation with a view to ensuring that Nigerians are not burdened.”
The president asked the central bank to make sure that the new notes become more available and accessible through banks.
Also read: In northern Nigeria, fuel, cash crisis hits election campaign
Tensions have flared in Nigeria since the central bank set a February deadline for depositors to exchange old notes, leaving many people cashless and frustrated.
Many people working in Nigeria’s informal economy and transport use cash for transactions instead of banking applications.
The central bank said the policy was aimed at weeding out excess and fake naira from the system as well as reducing cash ransom payments to kidnappers and bandits.
The policy was also introduced to promote cashless transactions by restricting the use of cash for business.
But some state governments have taken the central bank to court, seeking to suspend the policy and allow Nigerians to use old and new notes until banks can supply enough money.
The court is set to make a decision on February 22.