Nigeria’s top court suspends Friday deadline to swap old banknotes
IMF flags disruptions to trade and payments
08 February 2023 - 20:55
byCamillus Eboh and Chijioke Ohuocha
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People queue to withdraw newly designed Nigerian naira banknotes from automated teller machines inside a bank branch in Lagos, Nigeria, February 6 2023. Picture: BENSON IBEABUCHI/BLOOMBERG
Abuja — Nigeria’s Supreme Court on Wednesday prevented the government from enforcing a Friday deadline for citizens to swap old banknotes for new ones, as the International Monetary Fund (IMF) flagged disruptions to trade and payments.
Nigerians were due to turn in old 1,000, 500 and 200 naira banknotes in exchange for newly designed notes by Friday as part of a central bank initiative to curb cash in circulation and control double-digit inflation.
The plan has caused controversy, with people saying there are not yet enough new notes available, leading to chaotic scenes at banks and acute cash shortages.
Some politicians have criticised the timing ahead of February 25 elections for a new president and legislators, as campaigns are funded by mostly cash, which is hard to trace.
Supreme Court judge John Inyang Okoro said the decision to suspend the deadline was unanimous, pending a legal challenge from three states who had argued that the note swap plan was causing hardship ahead of the elections.
The court is due to hear the states’ challenge on February 15.
Earlier on Wednesday, the IMF’s resident representative in Nigeria urged the Central Bank of Nigeria (CBN) to consider extending the deadline for notes to be swapped given disruption caused by the shortage of new notes.
The central bank says the plan also aims to reduce fraud as the security features on the new notes will make them harder to counterfeit and that it will foster a move towards a cashless economy.
About 1.3-trillion naira ($2.8bn) in old notes has been deposited into the bank since the announcement in October, according to the Bank.
Some ruling party officials have publicly accused the CBN of a plot to turn voters against its candidate in the presidential election, Bola Tinubu.
President Muhammadu Buhari is not running he will complete his constitutionally allowed two terms in May.
Inflation and a flagging economy are likely to be major issues for voters at the elections, with many saying life is harder than when Buhari took office in 2015.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Nigeria’s top court suspends Friday deadline to swap old banknotes
IMF flags disruptions to trade and payments
Abuja — Nigeria’s Supreme Court on Wednesday prevented the government from enforcing a Friday deadline for citizens to swap old banknotes for new ones, as the International Monetary Fund (IMF) flagged disruptions to trade and payments.
Nigerians were due to turn in old 1,000, 500 and 200 naira banknotes in exchange for newly designed notes by Friday as part of a central bank initiative to curb cash in circulation and control double-digit inflation.
The plan has caused controversy, with people saying there are not yet enough new notes available, leading to chaotic scenes at banks and acute cash shortages.
Some politicians have criticised the timing ahead of February 25 elections for a new president and legislators, as campaigns are funded by mostly cash, which is hard to trace.
Supreme Court judge John Inyang Okoro said the decision to suspend the deadline was unanimous, pending a legal challenge from three states who had argued that the note swap plan was causing hardship ahead of the elections.
The court is due to hear the states’ challenge on February 15.
Earlier on Wednesday, the IMF’s resident representative in Nigeria urged the Central Bank of Nigeria (CBN) to consider extending the deadline for notes to be swapped given disruption caused by the shortage of new notes.
The central bank says the plan also aims to reduce fraud as the security features on the new notes will make them harder to counterfeit and that it will foster a move towards a cashless economy.
About 1.3-trillion naira ($2.8bn) in old notes has been deposited into the bank since the announcement in October, according to the Bank.
Some ruling party officials have publicly accused the CBN of a plot to turn voters against its candidate in the presidential election, Bola Tinubu.
President Muhammadu Buhari is not running he will complete his constitutionally allowed two terms in May.
Inflation and a flagging economy are likely to be major issues for voters at the elections, with many saying life is harder than when Buhari took office in 2015.
Reuters
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