Chaos looms as old naira notes phase out nears

The scarcity of the redesigned naira notes intensified over the weekend, frustrating many Nigerians and businesses as they scrambled to replace their old naira notes with the new ones.

Small business operators and malls were rejecting old naira notes from customers as the deadline for their expiration drew nearer, while many Automated Teller Machines (ATMs) were idle as banks were rationing the available new notes.

The Central Bank of Nigeria had set January 31, 2023 as the deadline for phasing out the old N200, N500 and N1,000 notes. It extended the deadline on Sunday by 10 days amid widespread public outcry over the scarcity of the new notes.

In some open markets in Lagos, there was scarcity of edibles like cow meat (beef), as cattle traders who majorly deal in cash could not accept the old naira notes amid the scarcity of the new ones.

“I could not withdraw money because the ATM is paying only N2,000 per transaction. What it means is that for me to withdraw N20,000, which is the limit per day, I have to do 10 transactions. I don’t have that patience,” one customer said in frustration.

The situation was worst in rural communities where banks are not easily available and a larger proportion of the population is unbanked.

The 2021 World Bank’s latest global index report showed that Nigeria’s banked population increased by 15.6 percentage points to 45.3 percent. This implies that almost 56 percent of Nigerians are unbanked and they are mostly in rural communities.

“The bank is far from where I live, so I make use of POS. The operators are now charging us N100 on every new N1,000 note. If you refuse, they will issue the old notes to you,” Habiba Yusuf, a trader in Bida, Niger State, said. “If you collect the old naira notes, it might get stuck in your hand; so most of us are paying the extra N100 for the new notes.”

BusinessDay spoke to Abdul Mohammed, a Point of Sale operator in Bida, who confirmed that N100 was being charged on every new N1,000 note because they had to bribe bank officials to get the new notes.

“Banks are rationing the new notes. We have to bribe some officials to get the new notes, and that is why we are collecting N100 on every N1,000 note,” he said.

BusinessDay visited some banks on the outskirts of Lagos and found that there were no monies in most of the ATMs, while the few that had were still dispensing the old notes and some banks were paying the old notes for over-the-counter withdrawals.

Some people were rejecting the old notes and going to distant places in search of ATMs dispensing the new notes.

“I live in Akute and all the ATMs and banks are still dispensing the old notes. I had to come to Ojodu, Berger just to withdraw the new notes,” Julius Bassey, a mechanic, said. “It is frustrating to spend N1,000 on transportation just to get the new naira notes.”

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Some business and transport operators have issued notices to their clients and passengers regarding the rejection of old notes ahead of the deadline.

BusinessDay visited a diagnostic centre in Surulere on Friday morning where a notice said old naira notes would not be accepted from January 26, 2023.

At Shoprite and KFC in Apapa, the cashiers said old naira notes were no longer accepted. A shopper at Shoprite complained about the rejection of old notes when the deadline was days away.

Care Forte, a pharmacy in Apapa, and Payless, a food outlet, were still accepting old notes on Friday. A roadside kiosk also accepted old naira notes for 20 bottles of water.

Some Bureau De Change operators told BusinessDay that the new naira scarcity was affecting their business. They said people were waiting for the new naira notes before changing their money as they would rather collect cash than accept transfer.

A man who identified himself as Victor lamented that restaurants and malls were rejecting cash. “I tried paying with cash at a restaurant in Berger and they were not accepting it,” he said.

Another man complained that the cashless economy the government is trying to attain is going to be difficult as he came all the way from Badagry to solve network and transfer problems at Standard Chartered in Victoria Island, Lagos.

At FirstBank along Tinubu Road, CMS, the ATM was dispensing cash but many people were in the queue. Union Bank on the same street had a long queue of Nigerians waiting to withdraw the new notes.