After long delay, CBN finally confirms old naira notes still in use

The Central Bank of Nigeria has finally confirmed that Nigerians can continue to spend the old 200, 500 and 1000 notes, taking more than a week to comply with a Supreme Court ruling that was hoped to give longsuffering citizens relief.

– A key point to note

The spokesperson for the bank, Isa Abdulmumin, announced in a statement Monday night that, “In compliance with the established tradition of obedience to court orders and sustenance of the Rule of Law Principle that characterized the government of President Muhammadu Buhari, and by extension, the operations of the Central Bank of Nigeria (CBN), as a regulator, Deposit Money Banks operating in Nigeria have been directed to comply with the Supreme Court judgement of March 3, 2023.”

– Why this matters 

The Supreme Court on March 3 directed the central bank to authorise the continued use of old notes it had initially demonetized, as it became clear it did not have enough new bills in circulation.

Neither the bank nor the federal government nor the CBN commented on the decision throughout last week. The CBN did not also ask commercial banks to go ahead and circulate the bills, leaving citizens who have long borne the brunt of the devastating policy to continue to struggle to survive. Mr Abdulmumin did not respond to Pluboard call on Friday.

On Monday, Gov. Chukwuma Soludo of Anambra state said the governor of the central bank, Godwin Emefiele, had told him that the central bank had met with banks’ executives and authorised them to issue and accept the old notes. Still, it took the entire day for the CBN to confirm that claim, long after businesses had closed for the day.

In his statement, posted on CBN’s Twitter handle at about 10.30 p.m. the central bank said, “the CBN met with the Bankers’ Committee and has directed that the old N200, N500 and N1000 banknotes remain legal tender alongside the redesigned banknotes till December 31, 2023. Consequently, all concerned are directed to conform accordingly.”

– Learn more

The cash crisis began in October 2022 when the central bank announced that new naira notes would be introduced in higher denominations to fight counterfeiting and hoarding. Nigerians had until Feb. 10 to turn in old notes. Many did so, expecting to receive the new notes in return.

It became clear the banks did not have enough of the new notes and had to ratio the few new notes available.

Sixteen governors took the matter before the highest court, asking it to compel the CBN to allow the continued use of the old notes. The governors, mostly of the ruling APC, accused the Buhari administration of using the policy against the presidential election candidate of the party, Bola Tinubu. Mr Tinubu has been declared president-elect.

On March 3, a seven-member supreme court panel led by John Okoro unanimously directed that the CBN must continue to receive the old notes from Nigerians.