Traders and transporters in Lagos were still accepting the old naira notes on Monday despite the expiration of the February 10 deadline set by the Central Bank of Nigeria (CBN).
Many Nigerians have expressed concerns over the confusion surrounding the deadline for the old notes following the order of the Supreme Court that restrained the federal government from banning the old naira notes.
A source close to the CBN said while they are waiting for the Supreme Court verdict on Wednesday, the N200, N500 and N1,000 notes temporarily remain legal tender.
The Supreme Court had last Wednesday suspended the February 10, 2023 deadline for the use of the old N1,000, N500, and N200 notes.
Nigerian banks are sticking to the February 10, 2023 deadline for the phasing out of high-value naira notes. They issued notices on Friday to their customers regarding the expiration of the deadline.
“The old designs of N200, N500, and N1,000 will no longer be accepted as legal tender after today 10 February 2023. Deposit your old notes now at any of our branches,” one of the lenders, Stanbic IBTC, said in a note to its customers.
At Agboju market at the weekend, a Point of Sale (PoS) operator was going round helping those who needed cash to buy food items but at a cost. It cost N700 to withdraw N5,000 (old notes).
Read also: Supermarkets, banks end old naira collection
“I just bought fuel for N7,000 at the petrol station. I paid with old notes. Where do you see the new naira,” Ogadi Johnson, a transporter, said.
Rashidat Kazeem, who sells onions in Mile 12 Market, said she was still accepting the old naira notes because she believed that the Supreme Court order supersedes the CBN deadline.
“The Supreme Court has asked the CBN not to ban the use of the old naira notes and its ruling supersedes that of CBN,” Kazeem said. “I will continue to collect the old naira notes until the Supreme Court says otherwise.”
According to her, the apex bank has not come out to say anything since the ruling, and it implies that it is giving in to the restraining order by the court.
Mohammed Hassan, a yam seller in Mile 12 Market, said he was still collecting the old notes because the deadline is February 17 and not February 10 as many people thought.
“CBN added an extra one week to the deadline after announcing February 10 but many people are still not aware and that is why they were thinking the old notes are no longer legal tender,” Hassan said.
Many Automated Teller Machines were not dispensing money on Monday, making more people patronise PoS agents.
Lawyers who spoke to BusinessDay said the Supreme Court’s order is not binding on the CBN and as such the apex bank could still enforce the initial deadline.
They said any judgment passed against the Federal Government is not enforceable on the CBN because the CBN Act gives the apex bank complete independence.
“By operation of the CBN Act, the apex bank cannot be subjected to the direction of any person or office in the land,” Ike Akaraiwe, a senior advocate of Nigeria, said in a WhatsApp message seen by BusinessDay.
BusinessDay gathered that there was a circular from the CBN to banks, insisting on compliance to the February 10 deadline. Consequently, the banks have stopped paying with old currency notes and have also issued notices to their customers on the expiration of the deadline.
Many customers who were in banks visited by our correspondent could not withdraw cash.
“We do not have cash. We are only doing transfers and taking deposits,” a cashier in one of the bank branches told customers who wanted to withdraw cash.
The Bank Directors Association of Nigeria (BDAN) has empathised with members of the public over the discomfort and hardship associated with the current currency reform, which introduced the newly designed naira notes and reduction in withdrawal limit.
“We are in constant communication with all the Banks and are assured that they are all doing whatever is within their control to normalise this difficult situation. We enjoin the banking public to maintain peace, rest assured that BDAN is taking all reasonable steps to influence the structure and mechanisms that should free up bottlenecks and open channels that will speed up the resolution of the crisis,” said Mustafa Chike-Obi, chairman, board of directors of BDAN.
The CBN had clarified its position on the February 10, 2023, deadline for phasing out of Nigeria’s higher denomination of the banknotes, saying the old notes would cease to be legal tender after the set date, and can no longer be used for any form of transaction afterwards.
Osita Nwanisobi, director, corporate communications department at the CBN, who made the clarification at the end of the earlier deadline of January 31, 2023, said in line with the provision of Section 20(3) of the CBN Act, Nigerians would have the opportunity to redeem the face value of the naira only at the central bank, after the currency has lost its legal tender status, subject to meeting certain conditions.
Reiterating the pledge of the CBN governor, Godwin Emefiele, at the meeting with the House of Representatives Ad-hoc committee on January 31, 2023, Nwanisobi said Nigerians would not lose their money, even as he urged citizens to take advantage of the extended deadline of February 10, 2023 to deposit the old banknotes in their possession at their banks or through mobile money agents.
