The Central Bank of Nigeria, CBN, has finally bowed to Supreme Court orders to retain the old currency notes of N200, N500 and N1,000 notes as legal tenders until December 31.
The apex bank made this announcement late Monday, through its spokesman Isa Abdulmumin.
The extension became necessary after the swapping of the old currency notes to the redesigned notes triggered cash shortage, resulting in severe mental and physical pains for the masses.
People queued up endlessly at the banks for cash that were not available. There were certainly not enough of the redesigned notes to go round in a country that was pretty much cash dependent.
Analysts have accused authorities of poorly implementing the policy in Africa’s largest economy, where digital payment services are usually not reliable and only 45% of adults have a bank account, according to the World Bank.
The cash crisis has cost the Nigerian economy an estimated 20 trillion naira ($43 billion) because of “the crippling of trading activities, the stifling of the informal economy and contraction of the agricultural sector,” the Lagos-based Center for the Promotion of Private Enterprises said in a statement.
The organization said the situation has further squeezed people and businesses in the country where 63% of the population is poor and 33% is unemployed.
The loss of a major payment method “affects business transactions; you cannot buy and you cannot sell, especially for the segments of the economy that are driven largely by cash,” said Muda Yusuf, director of the center.
Policymakers said the currency changeover would curb inflation, fight money laundering and limit the use of cash to buy votes in Nigeria’s general elections, which started last month.
It is still debatable if the policy has achieved the intended goals.
With reports from Associated Press