At a special news conference on October 26, 2022, Central Bank of Nigeria (CBN) Governor Godwin Emefiele announced that the bank would redesign the N200, N500, and N1,000 banknotes. He stated that the old notes should be exchanged for the new ones by January 31, 2023.
His announcement, however, was met with mixed reactions. Some people argued that the deadline for clearing out the old naira notes from the system was too short and urged the central bank to extend it.
He claimed that the action was taken to control the amount of cash in circulation since the central bank had noted that more than 80% of the money in circulation was not in the banking vaults.
President Muhammadu Buhari unveiled the new notes on November 23, 2022, and on December 15, 2022, they became available for Nigerians through the banks.
But since Monday, February 6, cash, including old and new naira notes, has been unavailable from banks’ ATMs and over the counter, so individuals who needed small amounts of cash to pay for transport fares and other urgent needs could not get money.
Many Nigerians lamented that the Central Bank of Nigeria's (CBN) policy to replace the naira notes with new ones was not the right idea and were also seriously concerned about the scarcity of the new notes in circulation.
This led to the protests that erupted in Ogun State, the south-western part of Nigeria, that have left banks in a state of physical damage. It was gathered that violence broke out in the early hours of Monday, February 21st, as a result of the stoppage of banks’ operations and Automated Teller Machines (ATMs) not dispensing cash for over a week.
The state police spokesperson, Abimbola Oyeyemi, confirmed the development. He said that the protesters attacked Union Bank, First Bank, and Keystone Bank branches on Monday.
A video shared online showed Keystone Bank, First Bank, and Union Bank buildings being set on fire as some youths were seen holding blanks in protest against the naira shortage as well as the petrol shortage in the state. At the time of the incident, the buildings were believed to be empty. Bonfires were set up and used to barricade the Sagamu-Benin expressway to prevent both human and vehicular movement.
"I called the house, and it was confirmed that angry citizens had set fire to Keystone Bank and Union Bank in Ijoku. "Please, if you're in that area, stay safe," a Twitter user wrote.
Across Nigeria, similar protests erupted in response to the scarcity of the new naira notes as well as petrol.
Recall that on February 7, one person was shot as another set of protesters vandalized banks in the Abeokuta area of the state.
On February 20, Bello Baffa lost his 32-year-old wife, Shema'u Labaran, along with her nine-month pregnancy, in a hospital in Kano due to his failure to timely pay for her medical bills with the new naira notes.
Baffa claimed he had earlier given the cashier 8,500 old naira notes, but the cashier informed him that the hospital management had placed an embargo on the old money and would only accept payments made through transfers.
Labaran is said to have been neglected for more than eight hours while she was in pain, which ultimately caused her death.
Meanwhile, on Thursday last week, the president, Retired Major General Muhammadu Buhari, said in his last national broadcast that the old N500 and N1000 naira notes were no longer legal tender in Nigeria, while extending the validity of the old N200 naira note till April 10, 2023.
The expected lowering of the nation's inflation rate for 2023 could, according to analysts, be impacted by the naira note and petrol crises. The National Bureau of Statistics reports that Nigeria's headline inflation rate decreased from 21.47 percent in November 2022 to 21.34 percent in December 2022 for the first time in 11 months.
The cash crunch and consequent riots occur just days before the February 25th presidential and national assembly elections. This has raised concerns about the safety of voters on Saturday, but the police and other security agencies have assured citizens of maximum safety during the polls.
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