CBN Quietly Approves Old Naira Disbursement, Traders Reject Banknotes

The Central Bank of Nigeria (CBN) has approved the disbursement of old N500 and N1,000 notes, as Deposit Money Banks’ (DMBs’) Automated Teller Machines (ATMs) begin to dispense the bank notes.

The commercial banks had not been disbursing old Naira notes since the central bank phased them out on 10 February 2023. 

Despite multiple rulings by the Supreme Court, the CBN insisted that the old Naira notes had ceased to be legal tender. Instead, it freed up the old N200 notes after President Muhammadu Buhari’s approval. 

However, following a ruling by the Supreme Court on Friday, 3 March 2023, Nigerian commercial banks began to roll out the bank notes on Monday, 6 March 2023. 

Prime Business Africa (PBA) had reported that the Supreme Court ordered the old Naira notes to remain legal till December 31, 2023, voiding the Naira redesign policy of the central bank. 

The judgement was delivered after 16 states in Nigeria sued the Federal Government over the Naira redesign policy, stating that it has negatively affected trading in their states. 

According to the state governments led in principle by Kaduna State Governor, Nasir El-Rufai, it was gathered that the livelihood of their citizens is at risk, as they are unable to access funds deposited in banks due to scarcity of new Naira notes. 

READ: Naira Policy: Governor El-Rufai Confirms Deeper Cracks In APC, Counters Buhari’s National Broadcast

After the judgement of the Supreme Court, Nigeria’s financial regulator and the Federal Government has not publicly addressed the judgement as they did with two previous rulings of the apex court. 

However, the CBN seems to have silently adhered to the Supreme Court judgement, as branches of Sterling Bank and Zenith Bank, amongst others, have begun to disburse the old Naira notes. 

But the disbursement has not convinced traders of the legality of the old Naira notes. During a market survey, Prime Business Africa gathered that the traders are awaiting public confirmation from the Federal Government.

The traders said President Muhammadu Buhari hasn’t publicly addressed the judgement, so they are not ready to risk accepting the Naira notes.

Also, fuel stations, including those operated by a government-controlled firm, the Nigerian National Petroleum Company (NNPC) Limited, rejected the old notes.

Fuel attendants in NNPC, MRS and Oando said they are only accepting the redesigned Naira notes or transfers from customers. 

Speaking on the Supreme Court ruling, CBN spokesperson, Isa Abdulmumin, reportedly said: “Yes, the CBN has not issued an official statement on the issue. Anyone banks give to you, you can collect. 

“We just want to make life easy for Nigerians,” The Cable quoted him in a report. He also stated: “Banks are paying old notes as well as new notes. They are all legal tender.” 

Abdulmumin urged traders to accept the old Naira notes, as its now legal tender: “No. They can’t reject it. It’s all legal tender.”

But a source in the banking sector told PBA that, “without a clear official announcement, those bank notes will never become legal tender again.”