Nigeria's push to replace the local currency notes with newly designed ones is creating an economic crisis, with the limited cash in circulation hurting many people and businesses across the West African nation.
The Central Bank of Nigeria introduced the redesigned notes and new limits on large cash withdrawals to help recover about 85% of the total currency in circulation outside the banking system.
It said this would also help curb money laundering and make digital payments the norm in Africa’s biggest economy, that’s currently largely driven by cash transactions.
The push to replace the old banknotes with new ones has left very limited cash in circulation, causing frustration and anger for many people who spend hours at the banks attempting to withdraw their money, as well as the possibility of theft for business-owners.
The newly designed denominations of 200 (43 U.S. cents), 500 ($1.08) and 1,000 naira ($2.17) being introduced together with limits on heavy withdrawals would drive financial inclusion in Africa’s biggest economy and also make it cashless, the Central Bank of Nigeria (CBN) said in November when they were introduced.
Nigerian Economist Sam Chidoka said the new currency is a lifestyle change for a significant amount of people and is having "mostly negative impact" on the population.
"You can see the challenges that is happening in the urban areas, its worse in the rural areas as well because we are largely cash dependent economy," Chidoka added.
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