Millions of Nigerians continue to grapple with hardship amid the cash crunch.
As tension continued to rise over the scarcity of the newly redesigned N200, N500, and N1,000 currency notes, commercial banks, motorists and major sales outlets across the country have refrained from the collection of old notes.
A PREMIUM TIMES survey within the week showed that many Nigerians are still in possession of the old naira notes due to poor circulation of the newly designed currency, but are not able to carry out their daily transactions because banks have commenced the implementation of the CBN deadline for the phasing out of the new notes.
Across Abuja, Lagos and other major cities visited, our reporters observed that commercial banks, transport workers and some shopping outlets refused to accept the old notes since Monday, despite a Supreme Court order restraining the CBN from phasing out the old notes.
Some business owners who spoke to PREMIUM TIMES lamented they do not know what to do with the old notes in their possession as banks battle with the scarcity of the new notes amid public outrage.
President Muhammadu Buhari Thursday announced that the CBN will extend the use of the old N200 notes. But in what analysts consider an affront to the Supreme Court, the president insisted that the CBN directive on the phasing out of the old N500 and N1,000 notes remains.
Background
On 26 October, 2022, Nigeria's CBN announced the introduction of redesigned 200, 500 and 1,000 naira notes into the country's financial system. But since the notes were unveiled, Nigerians across different parts of the country have been struggling to access it from banks and ATM cash points.
As Nigerians expressed frustration over their inability to access the new notes, the CBN extended the deadline for the phasing out of the old notes from 31 January to 10 February. Yet, many Nigerians have had a hard time getting the new notes.
Last week, the Supreme Court gave an order restraining the CBN from going ahead with the implementation of the 10 February deadline set for the phasing out of the notes.
But both Mr Buhari and the CBN governor, Godwin Emefiele, refused to adhere to the court order.
On Wednesday, the Supreme Court adjourned the suit filed by some state governments to challenge the 10 February deadline set by the CBN to end the use of old naira notes to 22 February later this month.
Millions of Nigerians have continued to grapple with hardship amid the cash crunch that has worsened business transactions and stifled trade in the informal economy.
Abuja
In some parts of the Lugbe axis of Nigeria's capital city, Abuja, our reporters observed that the old naira notes are being rejected in places like parks, fuel stations and marketplaces among others despite the extension of their validity by the Supreme Court.
"On Friday, I went to see my daughter in Gwagwalada on my way back to Lugbe. The driver of the cab I entered was asking me if I had the new naira note with me. I asked him why he asked and he said he won't take me to my destination if I'm going to pay with the old note," says a Lugbe resident, Idowu Agunbiade, in an interview PREMIUM TIMES.
At first, Mr Agunbiade said, he thought the taxi driver was joking, but everything changed when he arrived at his destination.
"When we got to our destination, I gave him the old note, but he outrightly rejected it, insisting on the new note. I was so shocked and I ended up transferring N300 to him," he said.
"That's when I got to understand that this money crisis is not funny again. The country has become something else where you have your money and you can't spend it because of the CBN policy."
Similarly, a POS operator, Aina Wale, narrated how a bank refused to collect his old naira note. Mr Aina also alleged that his bank refused to collect old notes from him, noting that he is still has about N100, 000 of the old notes in his possession.
"Come and see, this is a total of N150,000. I don't know what to do with it. I went to my bank on Monday to deposit this money and they rejected it. The bank official that attended to me said I should go to CBN and deposit the money. I am so heartbroken right now," he said.
"If they want to withdraw and I tell them what I have is an old note they will just hiss and go.I wish the government can help extend the policy so I can deposit this money."
Another resident, Ngozi Isaac, said she was so surprised to have learnt about the refusal to collect the old currency by banks.
"I was so surprised when my husband came back home on Monday and he said he was at the bank earlier to deposit just N10,000 and the bank refused to collect the money," she said.
At Lugbe car wash park, a cab driver, who gave his name as Adamu, said he stopped accepting the old notes because the ones he collected over the weekend were still with him.
"I can't spend it because people are rejecting it," he said.
On his part, a meat seller in Lugbe who gave his name as Baba Aisha said he stopped collecting the old naira notes on 9 February, following the deadline given by the CBN.
He explained that some of his customers informed him that the court had extended the deadline but if he accepts it, nobody will accept it from him.
"I think there is so much confusion about the whole thing, so the best thing I did was to stop collecting it at all," he said.
Gudu
On Wednesday, Aminu Gwadebe, a vulcanizer in Gudu, said he has also been rejecting the old notes. He complained that he had some old notes with him but did not know how to change them.
"Look, this is what I worked for over the weekend and the bank has refused to collect it, as it is I am stranded now," he said, showing our reporters a bundle of N200 old notes.
However, an onion seller, Musa Abubakar, said he still collects the old notes from his customers because he does not want his onion to get damaged.
"The new and old money is scarce now, so I had no option but to collect anyone that my customers bring. If I don't sell out my onion it will spoil and I don't want to lose both my onion and the money," he said.
South-west
In several places in the nation's commercial centre, Lagos, petty traders and artisans are rejecting the old notes.
PREMIUM TIMES observed that commercial buses plying the routes between Ogba and Lagos Island were not accepting the old currency early Wednesday.
However, the drivers said the chairman of the drivers union later ordered members to start accepting them from commuters. Likewise, commercial motorcycle riders are also still collecting the notes in some parts of the state.
"Old notes are not being accepted starting from today (Tuesday)," said a staff member working in the Business and Commercial Clients Unit at Stanbic IBTC Bank's Lagos headquarters.
"The CBN brought out a process that if you still have the money, you will bring the money to them individually. They will collect the money from you, they will do some investigation, they will interrogate you (on) why you still have the money, what type of business you are doing and all the rest," he added.
On Thursday, the Lagos State government warned residents against rejection of the old notes.
The CBN in its earlier memo communicating the 10 February deadline extension had said a seven-day grace period, beginning on February 10 to 17 February, would be allotted to allow depositing their old notes at the CBN after the February deadline.
But many Nigerians are yet to understand how feasible and seamless the procedure would be.
Rejection
Meanwhile, PREMIUM TIMES gathered from bank officials and customers Wednesday that the banks are rejecting the old notes in compliance with CBN directives.
A bank staffer who declined to have his name in print emphasised that the currency reform would have a reverse effect in the days ahead, noting that the ramifications may be dire for the populace.
"There are still lots of old notes in circulation apart from the ones some people have stashed away. So stopping it now and not pumping in more new notes I believe will cause a lot of pressure. Starting from Wednesday, the pressure will be so much," he explained.
"Come to think of it, most politicians still have that money. So they will want to instigate the masses. If the pressure is huge, there will be an outburst."
Also, another cash officer at one of the Stanbic IBTC branches in Lagos who does not want his name in print as he was not authorised to speak on the matter, said he is aware banks like Ecobank, Zenith and Stanbic IBTC have stopped taking the old notes from customers.
"For now banks are just playing safe since they don't know the policy direction the CBN might want to take," he said.
"As of Monday morning, we had to evacuate everything we had in old notes and move everything to the CBN because nobody knows what the CBN is going to do."
He said that banks evacuate cash to the CBN only on weekdays, noting that some other banks did it over the weekend to avoid the risk of the cash being rejected by the apex bank.
Protests, Destruction
In the midst of the uncertainties, many Nigerians have taken to the streets on major cities to protest the hardship caused by the policy.
In parts of southern Nigeria, many protesters were said to have sustained injuries and some were arrested for vandalising bank properties.
On Wednesday in Benin City, Edo State, residents attacked some of the banks in the city, including Ecobank, Firstbank and UBA, according to the police spokesperson in the state, Chidi Nwabuzor. Similarly, groups of protesters have also hit the streets in Delta, Akwa Ibom, Ogun and Oyo states on recent weeks.
The protest necessitated some banks to suspend activities and several shops and market stores were shut.
Experts Speak
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Speaking on the developments, CEO of Dairy Hills Limited, Kelvin Emmanuel, said the decision of the Supreme Court and President Buhari's Thursday broadcast reflect the lack of coordination in policy making in Nigeria.
"The people who say the deliberate hoarding of new naira notes as well as the hoarding of the old notes by the Central Bank as a strategy to curb vote buying is not covered anywhere in sections 19 & 20 of the CBN Act, and is an invitation to Anarchy. This is because, if pandemonium breaks out across the entire nation, there will be no elections in Nigeria," he said.
On his part, Kazeem Oyinwola, an Abuja-based legal practitioner and consultant, said by virtue of section 287(1) of the 1999 Constitution (as altered) 'The decisions of the Supreme court shall be enforced in any part of the Federation by all authorities and persons, and by courts with subordinate jurisdiction to that of the supreme Court.'
"Thus, to this extent, the Federal Government, and by extension, the Central Bank of Nigeria, is bound by the interim injunction granted against it by the Supreme Court to the effect that the old naira notes continue to be legal tender pending the determination of the Motion on Notice filed by the Kaduna State Government," he said.
Mr Oyinwola said the refusal of the federal government to comply with the verdict of the Supreme Court in this regard does not only constitute executive lawlessness but also violates the provision of section 287 of the Constitution.
He said: "Should the executive and its agents be seen to be flagrantly violating the constitution by virtue of which they're in office? The answer is no. And that's why the decision of Emefiele to the extent to which he insisted that the old naira notes cease to be legal tender from February 10, 2023 is not only irresponsible but constitutes shameless but reckless disregard for the constitution of the federation.
"Let me also add that under no circumstance can a party unilaterally modify the decision of a court to suit its own position. The effect of the interim injunction of the Supreme Court is that the old notes of N1000, N500 and N200 remain legal tenders. Can the federal government now modify the decision to say only the N200 notes should remain legal tenders? This is executive lawlessness, a federal government having scornful disregard for the judicial institution. This should only happen in a banana republic!"
On Thursday, the federal government announced that the old 200 naira note should be accepted as a legal tender for the next 60 days, and that there is no going back on the phasing out of the old 500 and 1000 naira notes, which has already taken effect.
