The banknote swap has led to cash shortages across the country as Nigeria gears up for elections on February 25.
Nigerian President Muhammadu Buhari on Thursday approved the central bank to extend the deadline for the submission of some older banknotes until April 10 after a cash shortage caused anger ahead of the general election. President and Congress later this month.
Last year, the central bank of Nigeria decided to start circulating the newly designed 1,000 ($2.17) 500 ($1.08) and 200 ($0.43) naira notes. The deadline to return old notes has been extended once to February 10, after which they will no longer be legal tender.
But the new notes have been shortage, leading to long queues and chaos at banks across the country. Much of Nigeria’s economy remains informal and many people use cash for transactions because they don’t have a bank account.
Buhari said on a television program that the old 200 naira note will continue to circulate in the economy along with the new 1,000, 500 and 200 bills until April 10.
But old 1,000 and 500 bills can only be swapped at the central bank and “designated points,” he said.
The opinions are contrary to last week Interim ruling of the Supreme Court that said all old notes remained legal tender until it heard a challenge brought by some state government.
Buhari defended the initiative, saying it would lead to more transparency in financial transactions, curb money laundering and reduce the money supply in the economy.
“Despite initial setbacks, the established review and feedback mechanism has shown that benefits have emerged from the policy initiative,” Buhari said.
Some politicians have criticized the timing before the February 25 election, as cash-funded campaigns are mostly hard to track.
Local media reported on Thursday that some angry citizens vandalized cash machines at several banks in southern Nigeria as they protested against cash shortages.
