“Nigeria on Edge as Banknote Swap Causes Cash Shortage Protests”
ABUJA, Nigeria (AP) — At least one person was injured in fresh clashes Tuesday between protesters and security forces in southern Nigeria, amid demonstrations against a cash shortage caused by the West African nation’s push to quickly phase out its old banknotes.
Protesters targeted facilities at some banks accused of withholding the new banknotes before the Feb. 10 deadline so people could deposit their old paper currency and use the redesigned version instead. The exchange program started at the end of November.
Nigeria’s antigraft agency, meanwhile, arrested a bank manager who refused to issue the new notes even though he had 29 million naira ($63,000) in the vaults.
Other bank employees were arrested this week in similar circumstances. The situation “suggests sabotage of government monetary policy by some banks,” Nigeria’s Economic and Financial Crimes Commission said in a statement.
The Central Bank of Nigeria introduced the redesigned banknotes and new limits on large cash withdrawals to recover about 85% of all currency circulating outside the banking system. It would also help curb money laundering and make digital payments the norm in Africa’s largest economy, which is currently largely dominated by cash transactions.
But the push to replace the old banknotes with new ones has resulted in very little cash remaining in circulation, causing frustration and anger for many people who spend hours at the banks trying to withdraw their money.
The cash crunch, say financial analysts, has hit some critical sectors of Nigeria’s economy, “caused significant difficulties in both rural and urban areas” and prompted many business closures.
Small protests over cash restrictions began over the weekend but escalated on Tuesday as people attacked banking facilities and workers while blocking some roads. One of the protesters was shot dead as protesters clashed with police in southwestern Ogun state. Nothing was initially known about the condition of the injured person.
“Some people have attacked banks. Someone was shot in the process and we have yet to know if the shot came from the police,” Abimbola Oyeyemi, the Ogun police spokesman, told The Associated Press. Officers have been deployed to restore peace in unstable areas, he said.
The economic crisis in Africa’s most populous country comes less than a month before a key election in which an unprecedented 93 million voters would choose a successor to incumbent President Muhammadu Buhari.
In a meeting with central bank authorities on Tuesday, Mahmood Yakubu, Nigeria’s elections chief, expressed concerns that recent monetary policy could hurt preparations for the elections, but authorities vowed to ensure there was enough cash for the Electoral Commission’s use.
Chinedu Asadu, The Associated Press
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