In a significant development, the Central Bank of Nigeria (CBN) has officially announced its intention to extend the validity of the old N200, N500, and N1,000 Nigerian banknotes indefinitely.
This decision comes as the apex bank aims to ensure the continued circulation of these denominations beyond any previously set expiry dates.
The announcement was made through a statement issued by the Director of Corporate Communications at the CBN, Isa AbdulMumin, on Tuesday. In the statement, the CBN emphasized its commitment to adhering to international best practices and preventing the recurrence of past issues regarding the use of old currency notes.
The statement from the CBN reads, “Without prejudice, the Central Bank of Nigeria wishes to inform the general public of its desire to extend the legal tender status deadline of the old design of N200, N500, and N1,000 denominations; ad infinitum.
“This is in line with international best practices and to forestall a repeat of earlier experiences. Thus, all banknotes issued by the Central Bank of Nigeria, in accordance with Section 20(5) of the CBN Act 2007, will continue to remain legal tender, ad infinitum, even beyond the initial December 31, 2023, deadline.”
The CBN further expressed its intention to collaborate with relevant authorities to vacate the existing court ruling that had placed restrictions on the use of these old banknotes. Consequently, all CBN branches across the nation will continue to issue and accept all denominations of Nigerian banknotes, both old and redesigned, to and from deposit money banks.
The central bank urged the general public to accept all Naira banknotes, regardless of whether they are old or redesigned, for their day-to-day transactions and handle these banknotes with utmost care to ensure their continued circulation.
Additionally, the public was encouraged to embrace alternative payment methods such as electronic channels for their everyday financial transactions.
This marks the third official statement issued by the CBN concerning Nigerian currency in recent times. The central bank had previously clarified that there was no scarcity of Naira in the country and emphasized the legal tender status of all banknotes.
The need for these statements arose following a Supreme Court ruling in March, which instructed the CBN to allow old N200, N500, and N1,000 notes to remain legal tender until December 31, 2023. This ruling came after the CBN had initially announced a new currency design policy and set expiration dates for these denominations.
Former Governor of the Central Bank of Nigeria, Godwin Emefiele, had revealed a plan in October 2022 to redesign certain Naira denominations (N200, N500, and N1000 notes) with the aim of reducing currency circulation.
Emefiele explained that this move was intended to control currency in circulation, combat counterfeit currency, and curtail ransom payments to kidnappers and terrorists. The old N200, N500, and N1,000 notes were initially slated to lose their legal tender status by January 31, 2023, but the CBN extended the deadline to February 10, 2023.
In response to the policy, the governments of Zamfara, Kogi, and Kaduna states filed a lawsuit against the Attorney-General of the Federation on February 3. Subsequently, Lagos, Ondo, Ekiti, Kano, Sokoto, Ogun, and Cross River states joined the suit as co-plaintiffs. The Supreme Court’s ruling in March 2023 invalidated the new currency design policy due to a lack of proper consultation and adherence to constitutional provisions.
With the latest directive from the CBN, Nigerians can now expect that old N200, N500, and N1000 banknotes will continue to be in circulation beyond December 2023, providing further stability to the country’s monetary system.