…many banks shut down
…Nigerians seek cash from fuel stations, motor parks, open markets
Businesses and households around Nigeria woke up to a sluggish and cautious start, Thursday morning, in the face of a halting naira swap exercise which had put a squeeze on cashflow and and caused tensions in past weeks.
There were protests in a number of cities Wednesday, particularly in and around bank premises and it was reported that a handful of lives were lost.
A broadcast by President Muhammadu Buhari at 7.00 am Thursday, pointed a tilt in the direction of the cash swap exercise and brought a measure of relief.
Buhari approved the continued use of the old N200 notes, alongside the new ones. He, however, said the old N500 and N1,000 banknotes have ceased to be legal tender in the country. In effect, Buhari extended the validity period of the old N200.
Buhari said: “To further ease the supply pressure, particularly on our citizens, I have given approval to the CBN that the old N200 bank notes be released back into circulation and it should also be allowed to circulate as legal tender with the new N200, N500 and N1,000 bank notes for 60 days from February 10, 2023 to April 10, 2023 when the old N200 note ceases to be legal tender” .
Many banks across the country did not open Thursday morning, a cautionary move, following protests and some skirmishes in and around some bank premises, Wednesday, sometimes leading to destruction of property.
The bank closures further put a strain on cashflow, as the Automated Teller Machines (ATMs) on their premises were also shut down.
Many households and businesses reported difficulty in purchasing daily needs, with some saying that their predicaments had been lightened somewhat by electronic transactions such as money transfers and payments through Point of Sale (PoS) terminals.
Many Point of Sale (PoS) operators did not report for business, while those who did, waited and watched for announcements, signals and direction from the Presidency, the Central Bank and responses to a recent Supreme Courts position, in which the validity of the old notes was sustained.
Commuters were reportedly stranded in the major cities, as the majority of transporters insisted they would accept new naira notes only and these were in short supply. Shops and other small and big businesses also insisted on new notes or electronic transfers for transactions.
Hordes of Point of Sale (PoS) service operators and other trader groups reportedly milled around fuel service stations, open markets, abattoirs, motor parks and wholesale produce markets, where transactions are often cash based, in a bid to buy up cash to resell and for other transactions.
The Central Bank of Nigeria (CBN) on October 26 last year, announced the introduction of redesigned 200, 500 and 1,000 naira notes into the financial system.
The currency was then launched in November and the new notes went into circulation on December 15.
The CBN said the new bank notes were being introduced to rein in counterfeiting, promote a cashless economy, discourage hoarding, curb crimes like kidnapping and terrorism among others.
The Supreme Court had in a ruling on February 8 suspended the CBN’s February 10 deadline to stop the use of old currency notes. The bank had ordered citizens to swap out old N1, 000, N500, and N200 banknotes for a redesigned currency by the deadline. But the apex court, ruling in an ex parte application by three states – Zamfara, Kogi and Kaduna – stopped the CBN from banning the old notes pending the hearing and determination of the case.