Banks, businesses reject N500, N1,000 after Buhari’s broadcast

Individuals, businesses and commercial banks were seen rejecting the old N500 and N1,000 notes on Thursday after a broadcast by President Muhammadu Buhari.

Buhari said he had given approval to the Central Bank of Nigeria (CBN) that the old N200 banknote be released back into circulation and that it should also be allowed to circulate as legal tender with the new N200, N500, and N1000 banknotes for 60 days from February 10, 2023 to April 10, 2023, when the old N200 note will cease to be legal tender.

He said in line with Section 20(3) of the CBN Act 2007, all existing old N1000 and N500 notes remained redeemable at the CBN and designated points.

The CBN has opened a portal on its website for redeeming the old notes.

Following the Supreme Court’s adjournment on Wednesday of a suit filed by some governors against the naira redesign policy, several governors said the old naira notes would remain legal tender until February 22, 2023 when the case would be heard.

Bank officials who spoke with BusinessDay after Buhari’s speech said their banks were not accepting the old N500 and N1,000 notes. “No bank after the President’s broadcast will accept the affected old notes. What we are waiting for is for the CBN to release the N200 notes,” a staff member of a tier-two bank said.

At a bank along CMD Road, Ikosi-Ketu, an official addressed customers who wanted to deposit the old N500 and N1,000 notes: “We got a call from our head office to stop collecting the N500 and N1,000 old notes. Kindly visit the CBN online portal to generate your code and follow the instructions.”

Commenting on Buhari’s speech, Uju Ogubunka, president of the Bank Customers Association of Nigeria, said it will help to ease pressure and tension among the banking public. He however said it depends on how fast the CBN is able to release the N200 note to the banks.

Ogubunka said the President acted in part on the recommendations given to him by stakeholders on the deadline extension with the old and new notes being used concurrently.

Taiwo Oyedele, head of tax and corporate advisory services at PwC Nigeria, said: “The presidential directive for the old N200 notes to be re-injected into circulation is in line with the CBN Act which empowers the President to give directives to the CBN on matters relating to the validity of notes and coins issued by the CBN as legal tenders in Nigeria. This includes the current naira redesign.

“In addition, there is a ruling of the Supreme Court to the effect that the old notes should continue to serve as legal tenders pending the determination of the case instituted by some governors challenging the manner in which the new policy is being implemented.

“Ultimately, it is important for the CBN, the President and other important actors to align their views and provide very clear communication to the people to reduce the current uncertainty which does not serve the country well in the short, medium and long term.”

BusinessDay also spoke with some traders at Mile 12 Market and found that some were rejecting the old N500 and N1,000 notes while some accepted them.

“I am no longer accepting the old N500 and N1,000 notes after the President’s speech this morning,” said Yinka Olaswere, a vegetable seller at Mile 12 Market.

“I was collecting it yesterday when Governor Sanwo-Olu asked us to and now I am stuck with N22,000 of old N500 and N1,000 notes. I intend to give it to a PoS agent if he will collect it from me. I don’t have the time to take it to CBN as we are told to do.”

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Kenechukwu Obiezu, a yam seller at Mile 12, said he stopped collecting the old notes immediately after the President’s address.

“This government did not obey the previous verdict of the Supreme Court and nothing happened. So, because of that, I will follow the President’s directive saying the old N500 and N1,000 are no longer legal tender,” he said.

However, Idiris Yusu, a tomato seller at Mile 12 Market, said he was still accepting the old notes.

“Most of the people patronising me do not have the new notes and I cannot leave my tomatoes and pepper to get spoiled because of old notes,” he said. “If nobody accepts it from me in Lagos, I will send the money to Kaduna. My people are there and they are still accepting the money there.”

Godwin Emefiele, governor of the CBN, on Thursday, met with 15 bank executives and directed them to make the old 200 naira notes available from Thursday.

He disclosed this after attending a meeting between President Buhari and the House of Representatives Special Ad Hoc Committee on Naira Redesign Policy, Cashless Policy, and Currency Swap.