Nigeria: CBN Affirms Legality of Old Banknotes, Urges Public Acceptance

The Central Bank of Nigeria (CBN) has reiterated that every banknote issued by the institution remains legal tender, urging the public not to reject any denomination. This directive comes as the CBN instructs its branches nationwide to continue issuing various denominations of both old and redesigned banknotes.

Addressing the reported cash scarcity in major cities, the CBN emphasized the sufficiency of banknotes for normal economic activities. The public statement, issued by CBN’s Director of Corporate Communications, Isah Abdulmumin, reaffirms the legal status of all CBN-issued banknotes, emphasizing their acceptance under Section 20(5) of the CBN Act, 2007.

Despite previous assurances of ample cash stocks, concerns emerged about the legality of old Naira banknotes. To dispel any doubts, the CBN clarified that all denominations of banknotes remain legal tender. The directive instructs CBN branches to provide adequate quantities of both old and redesigned banknotes to deposit money banks for circulation.

With a December 31, 2023, deadline on the legitimacy of old Naira notes, the CBN’s move aims to maintain stability and confidence in the country’s currency. The recent announcement has been well-received by Nigerians, who expressed relief on social media, citing past challenges during the implementation of the cashless policy.

In October 2022, the CBN, under former Governor Godwin Emefiele, unveiled plans to redesign certain Naira denominations and reduce currency circulation to boost cashless transactions. The short timeframe for implementing the policy faced criticism and challenges, leading to a Supreme Court mandate in 2023 retaining the legality of old N1,000, N500, and N200 notes alongside redesigned counterparts until December 31, 2023.

Experts, including the President of Bank Customers Association of Nigeria and the National President of the Association of Mobile Money and Bank Agents in Nigeria, shared their perspectives on the CBN’s recent decision. While noting the importance of the CBN’s role and clarification, concerns were raised about the discrepancies between old and new notes, urging the CBN to address potential confusion in denominations.

The CBN’s affirmation of the legal tender status for all banknotes aims to alleviate any public apprehension and maintain the smooth functioning of the country’s economy.