The World Briefly

February 17, 2023

Cash Crunch

Nigeria

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Nigerian President Muhammadu Buhari extended the deadline to turn in older banknotes after cash shortages in the country sparked anger and riots just over a week before Nigeria’s highly anticipated general elections, Al Jazeera noted.

Last year, Nigeria’s central bank began circulating newly designed notes: 1,000 ($2.17) 500 ($1.08), and 200 ($0.43) naira. The deadline for returning old notes had already been extended until Feb. 10 – after which point they were to become illegal.

But Buhari extended the deadline to April 10 because many of the new notes were in short supply, leading to long lines and chaotic scenes at banks across the country.

On Thursday, local media reported that angry citizens vandalized ATMs in southern Nigeria to protest cash shortages, Agence France-Presse noted.

Most of Nigeria’s economy is still informal and many people rely on cash for transactions because they don’t have bank accounts or use banking apps.

Buhari and the central bank have defended the initiative, saying it will lead to more transparency and curb money laundering.

Even so, some politicians have criticized the timing of the new currency’s introduction in the run-up to the Feb. 25 elections, noting that campaigns are funded by cash that is mostly hard to trace.

Meanwhile, state governments have challenged the central bank in court, requesting that the scheme be suspended and Nigerians be allowed to use both the old and new notes until the banks can deliver enough cash.

Last week, the country’s Supreme Court issued a ruling, saying that old notes are still legal tender until it reviews a challenge submitted by some state governments.

This story originally appeared in the February 17, 2023 newsletter, Les Misérables.