Nigeria’s Central Bank is working to rebuild trust after the disastrous rollout of new naira bills, but many customers continue to struggle to obtain cash. In response, the CBN has doubled the supply of banknotes to commercial banks and ordered all banks to load their ATMs and operate physically over weekends to alleviate the months‑long cash crunch that has thrown the country’s economy into disarray. The authority also directed that old naira notes remain in circulation until the end of the year.
The cash shortage began in October 2022, when the CBN set a February 2023 deadline for exchanging old ₦200, ₦500 and ₦1,000 notes for newly redesigned ones. The new notes were meant to mop up excess cash outside the banking system, curb corruption and discourage ransom payments to bandits and kidnappers. However, long queues and frustrated customers sleeping outside banks have become commonplace. Many Nigerians now avoid the banking sector, citing the poorly implemented redesign as evidence of systemic inefficiency.
Last week the National Labour Congress (NLC) threatened a strike over the cash scarcity, but postponed it for two weeks while monitoring cash access. Yet customers such as Samson Adebo say conditions have not improved. “There are a lot of crowds because people have been struggling to get cash,” he told DW near a bank in northern Nigeria. “I have come here several times and couldn’t get what I wanted. I think any bank in Nigeria would be crowded despite the claim that there is cash.”
Financial analysts estimate the crisis has cost the economy about ₦20 trillion (≈ $40 billion) and has heightened the risk of banking sector collapse as customers shun cash deposits. The CBN has urged patience, but not all banks are complying with the directive to load ATMs with new notes, according to customers interviewed by DW.
Kaduna‑based economic analyst Fatimah Salihu Abubakar explained that, despite a court ruling on the use of old notes, normal business cannot be expected because the policy did not support sufficient cash circulation. “Seventy‑five percent of Nigerian businesses are small and medium enterprises that rely heavily on cash,” she said, adding that these enterprises should adopt alternative payment channels such as mobile banking, internet banking and USSD.
Abubakar also argued that the Central Bank must take responsibility for the poorly executed currency shift, which has hit the informal sector hardest. “When the CBN first set the deadline for old notes, people thought it was impossible and did not act seriously. Rural residents found it difficult to transact, leading to complaints that prompted the Supreme Court to intervene with an extension. People are now a bit more relaxed, but the policy remains unhealthy,” she told DW.
The policy shift was originally intended to promote cashless transactions in a country where the informal sector relies heavily on cash and rarely uses the banking system. The CBN claimed the new policy would help remove excess cash outside banks, combat corruption and deter ransom payments to bandits. This article has been adapted from a radio report originally broadcast on DW’s daily show, AfricaLink.
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