Nigeria’s Supreme Court has prevented the government from enforcing a Friday deadline for citizens to swap old banknotes for new ones as the International Monetary Fund (IMF) flagged disruptions to trade and payments.
Nigerians were due to turn in old 1,000, 500 and 200 naira banknotes (worth $2.17, $1.09 and $0.43) in exchange for newly- designed notes by Friday as part of a central bank initiative to curb cash in circulation and control double-digit inflation.
The plan has caused controversy, with people saying there are not yet enough new notes available leading to chaotic scenes at banks and acute cash shortages.
Some politicians have criticised the deadline being set before February 25 elections for a new president and lawmakers because campaigns are funded by mostly hard-to-trace cash.
Supreme Court Judge, John Inyang Okoro, said Wednesday’s decision to suspend the deadline was unanimous, pending a legal challenge from three states who had argued that the note swap plan was causing hardship before the elections.
The court is due to hear the states’ challenge on February 15.
Earlier on Wednesday, the IMF’s resident representative in the country urged the Central Bank of Nigeria to consider extending the deadline given the disruptions caused by the shortage of new notes in a country where many people don’t have bank accounts.
In another argument for the currency swap, the central bank has said it would reduce fraud because the security features on the new notes will make them harder to counterfeit. The bank eventually wants to move towards a cashless economy. —Agencies