The House of Representatives’ call for the gradual withdrawal of old N200, N500, and N1,000 notes ahead of the December 31, 2024 deadline has met with a swift response from the Central Bank of Nigeria (CBN), which issued a statement clarifying the status of the currency.
The CBN emphasized that the old banknotes will remain valid indefinitely, refuting claims that they would cease to be legal tender by the end of the year.
During a plenary session on Thursday, lawmakers voiced concerns over the approaching transition and the potential for widespread economic disruption if the process is not managed effectively.
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The House’s resolution follows a motion of urgent national importance moved by Rep Afam Ogene, who highlighted the lack of public awareness regarding the looming deadline. According to Ogene, with less than two months remaining until the old currency ceases to be legal tender on January 1, 2025, the CBN has yet to implement a significant public sensitization campaign.
He noted that this lack of preparation raises concerns about a potential repeat of the chaos witnessed during the 2023 currency swap, which saw many Nigerians facing severe cash shortages, litigation, and public frustration.
However, on Thursday, the Central Bank released a statement through its acting Director of Corporate Communications, Sidi Hakama, asserting that reports suggesting the discontinuation of the old currency notes by December 31, 2024, are false and misleading. The bank accused those spreading such claims of attempting to disrupt the country’s payment system.
“The attention of the Central Bank of Nigeria has been drawn to discussions at different fora suggesting that the old series of the N200, N500, and N1,000 banknotes shall cease to be legal tender on December 31, 2024,” the statement read. “We wish to state categorically that such claims are false and calculated to disrupt the country’s payment system.”
The CBN’s statement reiterated the Supreme Court’s ruling from November 29, 2023, which granted the prayer of the Attorney-General of the Federation to extend the validity of the old naira banknotes indefinitely. The Supreme Court’s decision came amid the challenges experienced during the 2023 currency swap when the redesigned notes were initially introduced, causing significant disruptions to the economy due to cash shortages and the limited circulation of the new notes.
The apex bank affirmed its commitment to upholding the Supreme Court’s decision, ensuring that both the old and redesigned banknotes remain in circulation as legal tender.
“For the avoidance of doubt, the order of the Supreme Court of Nigeria… granting the prayer… to extend the use of old Naira banknotes ad infinitum, subsists,” the CBN said, dispelling any uncertainties surrounding the legal status of the old currency.
In response to concerns over the availability of cash, the CBN reassured the public that it continues to instruct all its branches to accept and issue all denominations of Nigerian banknotes, including both the old and redesigned versions. This directive applies to transactions with deposit money banks, ensuring that the public has access to adequate cash regardless of the currency series they hold.
Following the House’s motion, the CBN’s clarifications appear to have diffused some of the tension. To further ease the pressure on physical cash, the CBN has also advised citizens to embrace alternative payment channels such as electronic banking, mobile payments, and digital wallets. The apex bank emphasized that these alternative methods can help reduce the demand for cash and facilitate smoother financial transactions across the country.
Avoiding the Pitfalls of 2023
The 2023 currency swap debacle remains fresh in the minds of many Nigerians, with the difficulties encountered during that period serving as a cautionary tale. When the new naira notes were initially introduced, their scarcity led to an acute cash crisis, with many people unable to access funds for basic necessities. The situation escalated into public protests, and the eventual Supreme Court intervention extended the use of the old notes to prevent further economic disruption.
The CBN’s swift response to the lawmakers call is understood to be in an attempt to avert a potential panic among Nigerians, and the rejection of the old notes that would result from it.