Central Bank Of Nigeria Says Old Banknote Remains Legal Tender Amid Cash Shortage

The Central Bank of Nigeria (CBN) said in a statement on Wednesday that all old banknotes will be considered legal tender amid the ongoing cash shortage.

Isah Abdulmumin, director of corporate communications at the CBN, acknowledged in the statement that cash has been scarce in major cities in the country and that many Nigerians have been anxious about the legality of old naira notes.

"Our attention has again been drawn to reports of a scarcity of cash across some major cities in the country despite assurances of sufficient cash stocks in all locations across the country," he said, according to Punch.

However, he said no one should reject old banknotes because they remain as legal tender, noting, "We wish to restate that all denominations of banknotes issued by the Central Bank of Nigeria remain legal tender. In line with Section 20(5) of the CBN Act, 2007, no one should refuse to accept the Naira as a means of payment."

CBN branches across the country have reportedly been ordered to continue issuing old notes and "redesigned banknotes in adequate quantities to deposit money banks for onward circulation to bank customers."

The director also reminded people not to make panic withdrawals and reaffirmed that there is sufficient stock of currency notes to facilitate regular economic activities.

He then advised citizens to reduce using cash and try alternative digital modes of payment, as well.

The use of digital currency eNaira has been "disappointingly low," according to the International Monetary Fund (IMF). eNaira, which was launched by former President Muhammadu Buhari in 2021, is reportedly not being used by 98.5% of people who have eNaira wallets.

The government demonetized three denominations of the old naira bills — N200, N500 and N1,000 — in October 2022 as part of its currency redesign policy. The new notes were launched the following month. Other banknotes — N10, N20, N50 and N100 — have remained in use, as they would not be redesigned.

The demonetization caused the mopping up of over 70% of cash in the country and led to an estimated loss of N20 trillion.