Banks dispense old naira notes

Frustrated Nigerians seeking reprieve rushed to banks on Tuesday to withdraw cash after the Central Bank of Nigeria (CBN) ordered lenders to dispense the old naira notes, in compliance with the Supreme Court’s ruling.

The Supreme Court had on March 3, 2023 ruled that the old N200, N500 and N1,000 remain legal tender till December 31, 2023, but most Nigerians and businesses were still rejecting them as they were waiting to hear from either President Muhammadu Buhari or the CBN.

Their expectations were met on Monday, when the CBN issued a statement, saying the old naira notes remain legal tender until December 31, 2023.

This came after the presidency issued a statement on the same day, saying Buhari never told the CBN and the Attorney General of the Federation not to obey the order of the apex court.

Many analysts described the CBN’s compliance as a welcome development, though coming too late.

They were concerned about whether the old naira notes available would be enough to ease the pains Nigerians went through as a result of the cash crunch.

Our correspondents visited bank branches in parts of the country and found some commercial banks dispensing the old notes to customers over the counter and via ATMs.

Racheal Akindejoye, who operates a Point of Sale business, said she was happy and relieved that business can go back to the way it used to be. She complained that the scarcity had frustrated her business and family.

“I am very happy,” she said. “Now I can collect cash and give it to my customers. The stress we all went through was just unbelievable.”

Yemi Kale, partner of chief economist and head of research at KPMG Nigeria, said the country’s nominal GDP for the first quarter was estimated to drop by between N10 to N15 trillion owing to the cash shortages.

“About 40 percent of the N198 trillion economy is informal, of which about 90 percent is cash-based,” he said on Twitter.

According to him, 30 percent of the formal sector is cash-based, meaning that an estimated N106.9 trillion of Nigeria’s annual GDP is cash-based.

“At Guaranty Trust Bank, Obalende, the bank’s ATMs dispensed N10,000 old notes for the bank customers while others who do not have a GTB account are given N1,000,” a Zenith Bank customer who identified herself simply as Damilola said.

A Twitter user, with the handle @MaryAkinola, said: “I don’t think everything is going back to “normal” anytime soon because queue at Gtbank this morning is reaching 510 in number and they are only giving 4k old notes via the counter. No ATM [is] dispensing! I think this is more than a naira redesign! Why can’t they pay more than 4k?”

At several markets visited by BusinessDay across Lagos, most traders were accepting the old N500 and N1,000 notes, following the CBN’s directive to deposit money banks.

“CBN has come out to clear the air, by saying that the old notes are still legal tender; so with that pronouncement, I am now accepting the old notes for payments,” said Aisha Bakare, a food provision trader at Mile 12 Market, Lagos. “We are all relieved with this clarity and hope the banks have enough of the old notes to recirculate.”

Maureen Chukwu, a foodstuff seller, and Ademola Yusuf, a meat seller at Ketu Market, Lagos, said they had started accepting the old N500 and N1,000 notes.

“Nigerians have suffered needlessly owing to the silence of CBN. I don’t know why it took the CBN this long to give banks this directive after the Supreme Court ruling two weeks ago,” Chukwu said.

“I am pleading with CBN to make available sufficient old notes so we can carry out our business seamlessly,” Yusuf said. “My business is almost collapsing as people are not consuming meat again because of this naira scarcity.”

Our correspondent took a bus from Ketu to Mile 12 and paid with an old N500.

“We are collecting the old notes now. The president has urged CBN to adhere to the ruling of the Supreme Court,” a bus conductor who identified himself simply as Wale said.

Read also: Old naira notes legal tender until Dec 31- CBN

BusinessDay gathered that some bank customers were still cautious about withdrawing the old notes on Wednesday.

“I just visited Fidelity Bank at Ijesha bus stop, Apapa-Oshodi expressway. Their ATM is dispensing old notes,” Anthony, a resident, told BusinessDay. “Some people are skeptical about withdrawing old notes. Many at the ATMs are making transfers instead but the ATM is dispensing old notes.”

However, some residents from other areas in Lagos and other states say the banks in their areas were yet to dispense cash at their counters or ATMs.

Cynthia, a resident of Maitama, Abuja, told our correspondents that there was no cash for withdrawal at an Access Bank in her area. “Although the staff said they are expecting cash from CBN, she could not tell if it will be old or new notes,” she said.

At the Zenith Bank head office in Maitama, Abuja, Anthony, another resident, said there was a long queue of customers waiting for cash. However, the bank officials told them they were expecting cash from the CBN.

“The customer service section is busy with another set of customers with different complaints, including failed transactions while their accounts have been debited for weeks without reversing it. Failed transactions arising from poor networks remain a major source of challenge to the cashless policy,” he said.