Nigeria reissues old banknote as cash fiasco threatens to disrupt election
President Muhammadu Buhari on Thursday ordered Nigeria’s central bank to reissue old 200-naira ($0.43) banknotes that were withdrawn just days ago as concerns grow that the failed introduction of new money will affect the general elections later this month.
Violent protests have erupted in recent weeks as millions of people struggled to get their hands on new, redesigned ones versions of the 200, 500 and 1,000 naira notes were canceled on February 10, despite a Supreme Court ruling two days earlier that the planned currency swap should be suspended.
Now Nigeria’s Independent National Electoral Commission (INEC) has done just that reportedly warned that banks’ inability to distribute enough of the new money could make it difficult to pay temporary staff and security guards needed to service thousands of polling stations ahead of February 25 presidential and parliamentary elections. CNN has contacted INEC for comment.
Buhari unveiled the redesigned currency last November for the purpose of counterfeiting and hoarding large sums of money outside the banking system.
But in scenes reminiscent of the chaos unleashed in India When it tried to exchange its two largest banknotes in 2016, many Nigerians spent hours in long queues at ATMs in a desperate attempt to get enough money to cover their daily expenses.
That shortage has created tension and hardship, particularly for those working in the cash-based informal economy and for citizens living in rural areas. Protests are spreading across the country and bank branches have been damaged.
In a televised broadcast on Thursday, Buhari expressed his sympathy for struggling Nigerians and announced that the old 200 naira note will be returned to circulation for 60 days. The higher denominations remain canceled but can be exchanged at the central bank and other designated points, he said.
He also assured the Nigerians that the cash supply would improve in the coming days. Buhari said he has instructed the central bank to “ensure that new notes become more available and accessible to our citizens through the banks.”
Last month, the central bank said that of the 3.23 trillion Nigerian naira ($6.9 billion) in circulation last October, “only 500 billion naira was within the banking sector,” while a whopping 2.7 trillion naira ($5.8 billion) was “permanently kept in people’s homes.”
In his speech Thursday, Buhari revealed that about 80% of that money since the disclosure of the new banknotes in November.
“I have been reliably informed that approximately 2.1 trillion naira ($4.5 billion) of the banknotes previously held outside the banking system have been successfully recovered since the start of this program,” he said.