Nigeria Allows Cash Naira Swap to Ease Adoption of New Banknotes

Emele Onu, Bloomberg News

A customer counts out payment from a bundle of 500 Naira banknotes inside a market in Lagos, Nigeria, on Friday, April 22, 2022. Choked supply chains, partly due to Russia’s invasion of Ukraine, and an almost 100% increase in gasoline prices this year, are placing upward price pressures on Africa’s largest economy. , Bloomberg

(Bloomberg) --

Nigeria’s central bank will allow citizens to swap old naira notes for redesigned bills from Jan. 23 to boost adoption and circulation of the new currency before the old bills cease to be legal tender at the end of the month.

The Central Bank of Nigeria in October announced plans to redesign its highest-value banknotes in a bid to mop up excess cash and rein in inflation.

It gave citizens until Jan. 31 to change their old notes for new ones at banks, with the aim of bringing some of the estimated 2.7 trillion naira ($5.8 billion) that circulates in informal channels into the regular banking system.

The switch has faced challenges, especially in rural areas where people often live far from formal banking services, and also because of the requirements that the old notes be exchanged for new ones by depositing them in bank accounts.

The cash swap will enable “citizens in rural areas and those with limited access to formal financial services” to exchange a maximum 10,000 naira per person of the old notes through banks or agents without having to open an account, the central bank said. Banks or agents may open wallet or bank accounts for customers bringing in cash in excess of 10,000 naira, it said.

Read: Naira Redesign Crimps Nigeria’s Pre-Election Cash Surge