As the December 31, 2023, deadline for the withdrawal of old N200, N500, and N1000 banknotes approaches, cash shortages are beginning to resurface in some parts of Nigeria. The Supreme Court had ruled earlier in the year that the old naira notes would remain legal tender alongside the redesigned ones until the end of the year.
However, reports suggest that cash scarcity is already affecting residents of Kano and Borno states, with Point of Sales (POS) operators and Bureau de Change (BDC) operators facing difficulties in obtaining cash. This article delves into the cash scarcity issue and the implications of the looming deadline.
Cash Scarcity Ahead of Naira Note Deadline:
Two months before the deadline, residents of Kano and Borno states are reportedly experiencing cash shortages. POS and BDC operators have expressed concerns about the limited availability of cash, and even bank ATMs are reportedly dispensing smaller amounts of cash. This situation contrasts with the statistics from the Central Bank of Nigeria (CBN), which indicates that the money supply (M3) in the country has reached an all-time high of N67 trillion as of September 2023.
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Uncertainty Surrounding CBN’s Response:
According to report Newsmen attempted to reach out to Isa Abdulmumin, the CBN’s acting director of the corporate communications department, but received no response at the time of reporting. With just two months left to make a decision on phasing out the old N200, N500, and N1000 banknotes, it remains to be seen how the CBN will address the issue of cash scarcity and implement its plans for the withdrawal of the old naira notes.
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The resurgence of cash scarcity as the deadline for old naira notes approaches raises concerns about the readiness of the financial system to handle the transition. As Nigerians await further guidance from the CBN, it remains to be seen how the central bank will navigate this issue and ensure a smooth transition to the redesigned currency.