Nigeria: Protests over new naira notes possible through at least end of February /update 2

Event

Protests are possible nationwide until at least the end of February over the newly introduced naira notes. The Central Bank of Nigeria (CBN) introduced a new series of N200, N500, and N1000 banknotes on Dec. 15 and initially announced that existing currencies were no longer be considered legal tenders from Jan. 31. Due to several issues and popular discontent over the measure, the CBN has extended the deadline to Feb. 10, and implemented a seven-day grace period Feb. 10-17. While unions and civil society groups have, in turn, suspended planned nationwide protests, localized disruptive demonstrations have been reported across the country in recent days, including in Lagos and Abuja. There are reports of long queues at banks with available new notes.

Likely gathering locations include banks and CBN offices nationwide. Heightened security and localized disruptions are likely near all protests. Clashes are possible, notably if protesters obstruct road traffic and security forces attempt to disperse. Higher demand for cash and related long queues are possible.

Context

The measure is part of a global so-called cashless strategy to limit the use of cash and encourage the use of digital currencies. In line with the cashless strategy, the CBN has also implemented cash withdrawal limits from Jan. 9. The CBN now caps withdrawals for individuals and businesses at N500,000 and N5,000,000 per week, respectively. The policy aims to reduce the hoarding of banknotes by the public and counter criminal activity, including stemming counterfeiting and the payment of ransoms due to high levels of kidnapping in the country. The CBN encourages customers to use alternative methods such as internet and mobile banking and eNaira (regulated by the CBN), among other solutions.

Advice

Avoid all protests. Consider withdrawing sufficient cash as a precaution. Exercise a high degree of caution if carrying large amounts of money. Make allowances for possible business disruptions.

Resources

Central Bank of Nigeria