naira exchange
Banks Editor's Choice Middle East & Africa

Is the Naira Currency Exchange Deadline Extension Long Enough?

The Central Bank of Nigeria (CBN) has extended the deadline to exchange old banknotes for redesigned ones. The old notes were due to be taken out of circulation on 31 January but the deadline has been extended by 10 days. However, there are growing calls for an even longer extension amid concerns over shortages.

In October 2022, Nigeria’s President Muhammadu Buhari unveiled new naira banknotes in a bid to combat counterfeiting, the financing of terrorism and illicit stashes of cash. The redesign of the N200, N500 and N1,000 notes included a fixed 31 January 2023 deadline for phasing out the old naira banknotes and exchange them for the new ones.

This week, Godwin Emefiele, governor of the Central Bank of Nigeria (CBN) extended the deadline to 10 February but some say this still isn’t long enough. There have been reports of chaotic scenes at banks as people queue to swap notes.

Even the president has admitted he is “aware of the cash shortages and hardship being faced by people and businesses, on account of the naira redesign”.


Emefiele’s statement on the progress of the naira’s redesign implementation

In Emefiele’s latest statement, he thanked the president of Nigeria, for his support of the initiative. He explained that the policy started because only N500 billion of the N3.23 trillion in circulation was within the banking industry. He said that people were holding the remaining N2.7 trillion in their homes.

Godwin Emefiele, governor of the Central Bank of Nigeria
Godwin Emefiele, governor of the Central Bank of Nigeria

In his statement, Emefiele said: “So far and since the commencement of this program, we have collected about N1.9trillion. This leaves us with about N900billion (N500billion +N1.9trillion).To achieve effective distribution, of the new currency the CBN has taken the following steps.

Steps to effective note distribution
  • “We held several meetings with our deposit money banks (DMBs) and provided them with guidance notes on processes they must adopt in the collection old notes and distribution of the new notes to all Nigerians. These include specific directives to DMBs to load new notes into their ATMs nationwide to ensure an equitable/transparent mechanism for the distribution of the new notes to all Nigerians.
  • “We commenced a nationwide sensitisation through the print and electronic media to create an awareness on the redesigned notes to Nigerians including collaboration with the National Orientation agency to reach all Nigerians across multiple channels.
  • “We deployed 30,000 super agents nationwide to assist in our Cash Swap initiative in the hinterlands, rural areas and regions underserved by banks in the country to ensure that the weak and vulnerable ones amongst us can swap/exchange their old notes.
  •  “We deployed all our staff, particularly the assistant directors, deputy directors and directors in Abuja to proceed to all CBN branches nationwide to join the mass mobilisation campaign and monitoring programs, working with the deposit money banks, agents and our branch controllers across the 36 states of the federation.
    “This is meant to ensure compliance with all our guidelines already issued for smooth implementation of the program. Although we have received some reports of breaches by some bank branches, we have agreed with executive chairmen of the EFCC and ICPC to assist us, by sending their staff to all CBN and DMB branches nationwide to join in monitoring the implementation of these guidelines. The aim is to ensure compliance with the laid down guidelines.
The Agent Naira Swap initiative

“We are happy that so far, the exercise has achieved a success rate of over 75 per cent of the N2.7trillion held outside the banking system. Nigerians in the rural areas, villages, the aged and vulnerable have had the opportunity to swap their old notes; leveraging the Agent Naira Swap initiative as well as the CBN senior staff nationwide sensitisation team exercise.

“Aside from those holding illict/ stolen naira in their homes for speculative purposes, we do aim to give all Nigerians that have naira legitimately earned and trapped, the opportunity to deposit their legitimately trapped monies at the CBN for exchange.”

Deadline extended

The most notable thing to come from the announcement was the 10-day extension for Nigerians to trade in their old notes. Previously, the deadline for trading in old notes was 31 January 2023 (new one 10 Februray 2023).

However, there have been some flaws in this rollout. Thirty-six per cent of Nigerians are unbanked. What this means, is 36 per cent of the adult population has been unable to deposit their old notes into a bank account and exchange them for new ones.

At least that was the initial perception. Following Emefiele’s statement, it seems there are initiatives in place to ensure these underserved segments are able to exchange their notes. Time will tell if these are effective.

Political incentives

Some have questioned the timing of the policy’s introduction. As it was just before a general election, some have speculated that political incentives may have played a role. In her December appearance before the lawmakers, Aisha Ahmad, the deputy governor of the Central Bank of Nigeria, assured this was not the case. Emeifele said in his statement the currency redesign should disway political bribery. However, as noted by Steven Vass of The Conversation, this may just result in the use of foreign currencies instead.

Not enough supply for demand 

In theory, the deadline extension has been a good thing. It gives more people a chance to exchange their expiring currency into the new one. However, critics of the change have been quick to find the flaws with the initiative. The most notable issues were the lack of supply and the harsh deadline.

In December, Ahmad said the apex bank ordered the printing of 500 million pieces of the redesigned notes. However, she admitted she did not know the number of notes printed when later questioned.

These concerns carried on into the new year. The House of Representatives summoned Emefiele four times in the last two months due to confusion over the currency redesign. Following the possible warrant for his arrest, Emefiele appeared before the House on 31 January.

This was because the House did not feel the initiative was fulfilling its purpose. Speaker of the House, Femi Gbajabiamila, said: “how does the money get to the people? The money is not getting to the people. That is what we sought to clarify and that is exactly what we are going to do.”

Ultimately, CBN created the initiative to help accelerate Nigeria’s journey into a cashless society. This resulted in the implementation of withdrawal limits. Individuals could withdraw N100,000 (US$222 at the official exchange rate) per week, and corporations could withdraw N500,000 (US$1,111).

Following fears that this would impose hardships on Nigerians though, these limits were increased to N500,000 per week for individuals, and N5 million ($11,111) for corporations.

Building tensions

As the note exchange deadline nears, more and more members of the public are panicking to exchange their old notes. However, as previously mentioned, not enough notes were printed. This resulted in banks not having enough notes to exchange, which in turn has led to physical altercations between customers at banks.

These rising tensions caused Governor Nasir El-Rufai of Kaduna State to plead with the president to further postpone the February deadline. According to ThisDayLive, the governors told the president that the masses were suffering and traders were losing their goods due to a lack of patronage. Tomato sellers who travelled to Lagos with their goods faced wasted produce because people lacked the money to buy them.

Despite these pleas, on 3 February, Emifiele claimed there would not be a further extension.

“I understand the agitation and I’m begging in God’s name, we on our knees begging people to please show understanding. They should be calm…

“Eventually the limits will be raised and eventually the limits will be removed and people will be able to conduct their business transactions in a way that it has always been in the past,” he said.


  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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