The Central Bank of Nigeria (CBN) says the old N200, N500, and N1,000 notes are to remain legal tender indefinitely.
While new currency notes were introduced last year with the old ones set to cease as legal tender, the apex bank on Tuesday extended “the legal tender status deadline of the old design of N200, N500 and N1,000 denominations, ad infinitum”.
It explained that the move is in line with international best practices and “to forestall a repeat of earlier experiences.
“Thus, all banknotes issued by the Central Bank of Nigeria (CBN), in accordance with Section 20(5) of the CBN Act 2007, will continue to remain legal tender, ad infinitum, even beyond the initial December 31, 2023, deadline. The Central Bank of Nigeria is working with the relevant authorities to vacate the subsisting court ruling on the same subject.”
In a statement, the bank’s Director of Corporate Communications Isa AbdulMumin said CBN will continue to issue and accept all denominations of the bank notes, old and redesigned, to and from deposit money banks (DMBs).
“The general public is enjoined to continue to accept all Naira banknotes (old or redesigned) for day-to-day transactions and handle these banknotes with utmost care, to safeguard and protect the lifecycle of the banknotes,” it added.
Tuesday’s move ended a months-long debacle since the new currency notes were introduced by the leadership of the apex bank under its former governor Godwin Emefiele.
Emefiele, who is facing a 20-count fraud charge, had argued that the move would help among others fight inflation, kidnapping and curb vote-buying months before the 2023 general elections.
“Truly speaking, at the margin, I may be wrong, but I think kidnapping and ransom-taking have somehow reduced. Security agents are doing a fantastic job,” Emefiele said.
“I think it (naira redesign) has slowed those people down because they know that if they collect old notes, nobody is going to collect it from them. So, it might as well as think of other ways.”
‘Policy Shall Be Reviewed’
But on the eve of the poll, the move plunged the country into a cash crunch, pushing millions into panic with some parts of Nigeria experiencing violent protests.
A Supreme Court order restrained the apex bank from implementing its deadlines for the phasing off of the old banknotes. Tinubu, who opposed the introduction of the new notes before his election, had during his inauguration in May promised that “the policy shall be reviewed”. He maintained that “my administration will treat both currencies as legal tender”.
The CBN later extended the validity of the old notes to December 2023 but the apex bank, with a new governor Yemi Cardoso, says the old currency notes are now legal tenders indefinitely.