Nigeria's naira shortage: President Buhari extends use of old notes

A long queue for cash in Kano, northwest Nigeria on 8 FebruaryGetty Images

People were pictured in long queues in Kano, north-west Nigeria on 8 February

By Chris Ewokor
BBC News, Abuja

In a bid to calm tensions over a lack of cash in Nigeria, President Muhammadu Buhari has announced that one of the three banknotes being phased out will be reintroduced into circulation.

In recent days there have been violent protests as people struggled to get hold of newly designed banknotes.

The deadline to hand in old cash was supposed to have been last Friday.

But not enough new notes have been released, leaving many without cash to pay for vital items.

With elections due on 25 February, Mr Buhari has been facing calls to take action to avoid losing votes for the ruling All Progressives Congress (APC).

In a televised address on Thursday morning, Mr Buhari said the old 200 naira ($0.43; £0.36) notes would remain legal tender for another 60 days.

He also said that the old 500 and 1,000 naira notes could be exchanged at the central bank and other designated places until 10 April - the previous deadline had expired on 10 February.

The president blamed "unscrupulous officials in the banking industry" for the difficulties in implementing the new policy.

"I am deeply pained and sincerely sympathise with you all over these unintended outcomes," Mr Buhari said.

Nigerians have faced long queues at cash machines, with some sleeping outside banks to try and be first in line to get some money. The frustration boiled over into widespread protests on Wednesday, with several commercial banks attacked by angry crowds.

People say they have been forced to skip meals and have been unable to pay for basic services like bus or taxi fares in a country where cash is still widely used. An estimated 40% of the population do not have access to bank accounts.

The currency redesign has coincided with problems making digital payments.

The Supreme Court last week ordered that the deadline for giving up old banknotes be suspended, following a legal challenge by several state governments. It is now due to hear the case next Wednesday.

On Thursday afternoon, some banks in the country's biggest city, Lagos, remained closed.

Near one of those that was open, people were sceptical about the president's announcement.

"Buhari has been silent all this while and now he's eroded people's trust to take their money to the bank. Question is do we obey the Supreme Court or do we obey the president?" Akinyemi Ogunleye, a 33-year-old taxi driver, told the BBC. He had still not been able to withdraw any money.

"Extending the judgment only extends our suffering. I don't care, nothing will change," said Olusoga, 39, who is looking for work.

In his address, Mr Buhari said redesigning the currency was intended to tackle inflation and illicit financial flows, as well as curb insecurity, especially the financing of "terrorism" and kidnapping for ransom.

He also alluded to concerns that some politicians had amassed large sums of money ahead of the elections in order to buy votes, and said the currency redesign had put a stop to that plan.

Mr Buhari urged voters to go out and vote in the general election for the candidates of their choice.

He is stepping down at the end of his two terms. The main contenders for the presidency are the APC's Bola Tinubu and the Peoples Democratic Party's (PDP's) Atiku Abubakar, while Labour's Peter Obi is seen as the wild card in the race.

Additional reporting by Simi Jolaoso in Lagos

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