Nigeria Supreme Court extends deadline to ditch old banknotes

Nigeria's Supreme Court has temporarily suspended Friday's deadline to end the legal tender status of old banknotes, which had caused a cash crisis in the nation.

Dozens of people queue to withdraw new Naira notes from an ATM at a bank premises in Lagos on 1 February 2023. AFP - PIUS UTOMI EKPEI

The ruling came shortly after the International Monetary Fund said Nigeria should consider extending its deadline to swap old banknotes because of the disruption to trade and payments caused by a shortage of new notes.

The central bank decided last year to start circulating the new notes, giving people until 31 January to get rid of their old ones.

Cash shortage

But banks have not been releasing enough of the new 200, 500 and 1,000 naira notes and there were fears that fights at cash machines could affect this month's elections.

The central bank said it wanted to reduce the amount of cash in circulation in order to better control liquidity, curb inflation and move towards a cashless economy.

However millions of Nigerians do not have bank accounts, many of them living in rural areas.

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Those with accounts were required to bring their old banknotes to a bank branch and have the corresponding amount credited to their accounts.

In late January, the central bank extended the deadline until 10 February to allow more people in rural communities to exchange their old notes.

Many Nigerians have complained the deadline was too tight for those living in rural areas or working in informal markets.

(with Reuters)