There is a growing unrest across Southwest Nigeria following the cash crunch caused by a scarcity of new-design naira notes.

On Feb. 3, protests broke out in parts of Ibadan as youths trooped out to express their displeasure at the scarcity of the new notes. There were clashes in the streets between the youths and security operatives. One person was shot  dead in the process. 

Confirming the incident, Adewale Osifeso, the police spokesperson in the state, said “during the rage, an individual identified to have been a member of a vigilante group and who was reported to have died in the fiasco has since been deposited at a government hospital for post-mortem.” 

When the news of a protest spread in Abeokuta, Ogun State on Feb 7, many bank workers had to flee their offices as they feared being targeted.

Run for safety

As the day developed bank teller machines were vandalised, and one bank branch set on fire. One person was also shot during the violent protest.

“The protest was hijacked by hoodlums who broke different ATMs in a bid to steal. They were, however, confronted by security operatives, leading to a gunshot attack on one of the protesters,” Mujidat Alimi, a tailor who was forced to close down her shop and run for safety, said. 

On Feb 8, some youths trooped out in Akure in Ondo State to protest their inability to get cash from halls of commercial banks and ATMs.

“We are protesting against the government because they have made life difficult for us. We have money but we can’t spend it because we cannot access it. It is so ridiculous. One of my children was sick but I had to borrow money from a neighbour to get him drugs,” Comfort Ajayi, a resident of Ondo told our reporter on the phone. 

Meanwhile, sources in Osun and Ekiti said there are plans for similar protests.

Cash crunch

The cash crunch has been caused by the Central Bank of Nigeria’s plan to withdraw old notes and replace them with new ones ahead of the general elections, as a measure to clamp down on any plot to buy votes with cash stockpiled in the months before the election.

The change, according to the bank, was also to reduce cash in circulation, and tackle currency counterfeiting and terrorism financing among other vices in the country.

Central bank governor Godwin Emefiele, in Oct. 2022, announced a plan to redesign three highest currency notes of ₦1000, ₦500, and ₦200 denominations.

But despite assurances from the CBN that enough cash had been issued, people have struggled to get hold of money. 

One of the regulations instituted by the CBN is that new notes should only be issued through ATM machines, not over the counter. A limit of 20,000 naira per day has been set.

But there is widespread belief that these restrictions are being circumvented by people who have preferential treatment at the bank. 

Clips published on social media showing huge handfuls of new notes being sprayed at a wedding at a time no one else could get their hands on any, have caused consternation. There have been some arrests of bank staff accused of hoarding new notes inside bank branches.

Old notes 

The Central Bank explained that it is empowered by the  CBN Act of 2007 (as amended) to manage the country’s legal tender currency – Naira, Kobo, and eNaira in such a manner.

On Dec. 15, 2022, the new notes became legal tender and scheduled to have replaced the old notes by Jan. 31. Following public outcry, Emefiele announced the extension of the deadline to Feb 10, after getting the approval of President Muhammadu Buhari.

While many people running business activities have stopped collecting the old notes as legal tender, there has been inadequate supply of the redesigned notes, making it difficult for commercial banks to meet customers’ demands.

“Our ATM operations alone need about ₦10 million but what the CBN gave us was not even up ₦5 million. This is the reason why we don’t have the new notes but we can’t complain openly,” a top bank official in Osun state told HumAngle. 

As the scarcity of naira notes stifle economic activities, Point of Sale (PoS) operators have also raised charges on transactions. In most parts of Osun, Ogun, Oyo, Ekiti, Lagos and Ondo state, PoS charges have jumped by 300 per cent.  

Some of the operators who spoke with HumAngle said they are facing difficulties getting both the old and new notes from the banks in recent weeks, hence, the reason for the increment in charges. 

“We passed through a lot before getting the cash we gave to customers. The increment of charges is not our fault. There was a day I had to sleep in the bank to get money. So it’s not been easy,” said Balikis Dada, a PoS operator in Ibadan, capital of Oyo State. 

Our reporter also learnt that some PoS outlets have been shut due to inability of operators to get both the old and the redesigned notes. 

Court order

On Feb. 6, three state governments, Kaduna, Kogi and Zamfara, sued the federal government at the Supreme Court over the hardship occasioned by the scarcity of the redesigned naira notes.

The Court, today, issued an interim order stopping the central bank from ending the use of old naira notes from 10 February.

While CBN governor Emefiele is yet to speak on the decision of the Court, some Nigerians have expressed their satisfaction. 

Kamol Adeyemi, a businessman in Akure, told HumAngle that the Court decision would make life more easier for Nigerians. 

“I am happy that the Court made the decision to stop the CBN from ending the use of naira notes. We hope that they will also make the redesigned notes available too. The last weeks have been hell for citizens of the country.”