The markets are responding slowly and with caution, Tuesday, to statements by the Presidency and the Central Bank of Nigeria (CBN) that the old N500 and N1,000 denomination of currency notes remain valid as legal tender.
This follows on the back of a Supreme Court ruling, revalidating both currency notes which had earlier been invalidated by the CBN in a currency redesign exercise.
Reports reaching the Nigerian observer from across the country on Tuesday, indicate that there is a mixture of acceptance and hesitance to transacting with the Old N500 and N1,000 notes.
The case is the same in Benin City, the Edo State capital, where some deposit money banks reportedly accepted and dispensed the old notes, while others concentrated on electronic transfers.
Some sources close to the banks said some of the banks had since run out of the old notes, after following the CBN directive of invalidation and recall.
Other sources said some of the banks had old notes but were tacitly holding back because they preferred to have properly channeled, documented directives from the regulator, rather than media statements.
Banking sources further say that the speed and effectiveness of uptake of the old notes into transactions would depend largely on how much of the notes deposit money banks currently have in their vaults, if any, as well of the logistics of circulating the currencies from the Central Bank to other banks across the country.
Our sources further say that if the revalidation announcement was only made last night (Monday) it would take some time for the bank to distribute the notes around the country.
In and around Oba Market in Benin City Tuesday morning, some traders were enthusiastically accepting the old notes, while others expressed pleasure but were cautious.
Many of the traders said they would hold back and watch developments till later in the day before they joined in.
Among the first traders to accept to transact in the old notes were sellers of beef, frozen chicken, turkey, fish, tomatoes, vegetables and other perishables. Some newspaper vendors on Ring Road were also seen accepting the old notes.
President Buhari said in a statement made on his behalf on Monday, that at no time did he instruct the Attorney-General of the Federation and the Governor of the Central Bank of Nigeria (CBN) to disobey any court orders involving the government and other parties.
Garba Shehu, Senior Special Assistant to the President on media, said since the President was sworn into office in 2015, he has never directed anybody to defy court orders. He affirmed that democracy cannot be practiced without the rule of law and that the commitment of the administration to the principle has not changed.
“Following the ongoing intense debate about the compliance concerning the legality of the old currency notes, the Presidency therefore wishes to state clearly that President Buhari has not done anything knowingly and deliberately to interfere with, or obstruct the administration of justice.”
Shortly after this pronouncement, the Central Bank of Nigeria (CBN) stated that the old N500 and N1,000 banknotes would remain legal tender till Dec. 31.
Isa AbdulMumin, CBN’s Acting Director, Corporate Communications, said this was in compliance with the March 3 judgment of the Supreme Court.
The Supreme Court had in a ruling on March 3, ordered the Federal Government to accept the designated denominations of naira notes as legal tender until Dec. 31.
However, neither President Muhammadu Buhari nor the CBN governor, Godwin Emefiele, reacted to the ruling until when the presidency, in a statement on Monday, absolved the president from non-compliance with the ruling.
