WORLD NEWS | Nigeria’s old currency can last longer in cash crisis

ABUJA (Nigeria), March 14 (AP) – Nigeria’s central bank has extended the time it will take to swap out its old currency for redesigned notes after the change sparked a cash shortage that forced businesses to close and left millions Unable to withdraw funds.

The Central Bank of Nigeria announced late Monday that the old notes of 200 naira (43 cents), 500 naira ($1.08) and 1,000 naira ($2.16) will remain legal tender until Dec. 31. Bank spokeswoman Isa Abdulmumin said the extension was to comply with an order from the country’s top court, which ruled that the scheme’s implementation violated the law.

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Thousands of people waiting in line at banks in Nigeria’s capital Abuja on Tuesday still couldn’t get their hands on old and redesigned banknotes. There has been a cash shortage since early February as there have not been enough redesigned notes to replace the old ones in the cash-dependent country.

Analysts have blamed poor policy enforcement in Africa’s largest economy, where digital payment services are often unreliable and only 45 percent of adults have bank accounts, according to the World Bank.

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The cash crisis has cost the Nigerian economy about 20 trillion naira ($43 billion) as a result of “paralyzing trade activities, stifling the informal economy and shrinking the agricultural sector,” said the Lagos-based Center for Economic Development . the private sector said in a statement.

The situation further squeezes 63 percent of the country’s poor and 33 percent of unemployed people and businesses, the group said.

Losing the primary payment method “affects business transactions; you can’t buy and you can’t sell, especially for a sector of the economy that is largely cash-driven,” said Mouda Yusuf, director of the centre.

Policymakers say the currency switch will curb inflation, combat money laundering and limit the use of cash to buy votes in Nigeria’s general election that began last month.

But according to Tunde Ajileye, a partner at Lagos-based SBM Intelligence, most of the program’s expected results have not materialized due to poor implementation.

“The political goal was to try to stifle cash flow and make it harder to buy votes. That was achieved. However, the political class shifted from buying voters to influencing INEC (election body) officials,” Ajileye said. “There are serious consequences … so it’s a lose-lose situation.” (AP)

(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)