Naira redesign: Buhari approves the usage of outdated N200 notes for 60 days

Nigeria’s President Muhammadu Buhari in a nationwide broadcast on Thursday morning directed the Central Financial institution of Nigeria to launch outdated N200 notes into circulation. “To additional ease the provision strain, notably on residents, I’ve given approval to the CBN that the outdated N200 financial institution notes be launched again into circulation and it must also be allowed to flow into as authorized tender with the brand new N200, N500 and N1,000 financial institution notes for 60 days from February 10, 2023 to April 10, 2023 when the outdated N200 be aware ceases to be authorized tender,” the President stated.

It’s an vital but curious concession from Nigeria’s President after a shocking and sudden choice to revamp the Naira in December 2022. The redesign course of, which included a foreign money swap, has been riddled with uncertainty. With the CBN unable to fulfill the demand for brand new notes, the coverage has additionally led to lengthy queues at financial institution ATMs and a money disaster.

CBN strikes deadlines twice

On the announcement of the foreign money redesign program, the CBN introduced a foreign money swap, asking individuals to deposit their outdated Naira notes for brand new ones. This element was vital as a result of the CBN said that every one outdated notes would stop to be authorized tender by January 31, 2023. At a press convention, Godwin Emefiele insisted that the deadline wouldn’t change.

Nonetheless, it appeared that the CBN underestimated the money demand, resulting in a horde of pissed off clients at banking halls who couldn’t entry their monies. Finally the CBN prolonged the deadline to February 10. But, that has produced little decision; TechCabal reported on Tuesday that banks have been now not accepting the outdated notes from clients even because the newer notes weren’t out there. It paints the image of a coverage that’s in sixes and sevens.

Solely the outdated N200 notes might be again in circulation

Final week, state governments took the Federal Authorities to court docket after protests broke out throughout a couple of states in Nigeria. The Supreme Courtroom determined that the Federal Authorities ought to put a maintain on the coverage deadline till February 15, throwing much more uncertainty into the combination. Whereas many argued that the CBN was not a celebration to the case and wouldn’t obey the foundations, Buhari’s choice means that the choice to revamp the Naira got here from above.

In what was a compromise, the federal government will now launch outdated N200 notes into circulation and can enable them to stay authorized tender for the following 60 days. Previous N500 and N1000 notes will now not function authorized tender; as an alternative, these notes can nonetheless be exchanged per new tips from the CBN. It’s unclear if the discharge of outdated N200 notes will meet the prevailing demand for money.