Scarcity of Nigerian national currency sparks protests

By Andrew Wasike and Aurore Bonny

NAIROBI, Kenya, DOUALA, Cameroon (AA) - Nigeria was hit Wednesday by a wave of protests as Nigerians face an acute shortage of the national currency, the naira.

Protests in Benin, Ibadan and Delta State, and others areas, were marked by burning tires, blocking roads and fighting with security forces.

The scarcity has been attributed to the recent decision by the Central Bank of Nigeria (CBN) to redesign the three largest currency denominations.

Protests have been met with a heavy-handed response from security forces, with reports of tear gas and live ammunition used to disperse crowds. It has led to concerns about human rights abuses and a potential escalation of violence.

“The redesign of the Naira by the CBN is intended to bring greater monetary control by the CBN over the economy. Nigeria has low levels of formal financial inclusion and this redesign is part of a larger cashless policy,” Kalu Adja, a financial expert from Nigeria told Anadolu.

He said the intent is to reduce cash in the system, bring inflationary pressures down and fight crime ahead of Feb. 25 general elections.

Adja noted there are “lots of frustrations and lines to get cash.”

Prominent economist Isaac Botti expressed concern about the role of commercial banks in the current currency crisis. He said the banks have played a significant role in mismanaging the new currency, which has contributed to the shortage of naira notes.

Botti argued that the banks have failed to properly distribute the redesigned currency, leading to an imbalance in the supply and demand for cash.

“Nigerian ATMs are still discharging the old banknotes. The banks exchange the new currency with their loyalists further worsening the situation,” he told reporters Wednesday.

The situation has been compounded by the fact that Nigerians are refusing to accept old notes, exacerbating the chaos and contributing to the scarcity of cash in affected areas.

Nigerian Central Bank Governor Godwin Emefiele warned against hoarding bank notes accusing politicians of buying new notes and storing them for political purposes ahead of the elections.

The protests are an example of the wider economic challenges facing Nigeria, which faces significant structural issues in its economy.

The country's leaders have pledged to take action to address the currency shortage and support businesses and individuals affected by the crisis but the road ahead remains uncertain.

The protests are a result of the scarcity of the new N200, N500 and N1,000 notes (equivalent to $0.50, $1.25 and $2.50, respectively), as well as the rejection of old bills by Nigerians.

The shortage has left many individuals and businesses struggling to meet their daily needs, exacerbating already challenging economic conditions.

As protests continue, there are fears that the unrest could spread to other parts of the country and deepen the economic and social crisis facing Nigeria.

The international community is closely watching the situation and calling on the government to respect the rights of protesters and take urgent action to address the underlying issues fueling the unrest.