Cash Crunch: Shoprite, Others Reject Old Notes

Against the backdrop of confusion over the execution of the Supreme Court order to stand down the deadline for acceptance of the old Naira banknote, Nigeria’s leading retailer, Shoprite, has stopped accepting the old notes in payment for purchases at its shops, Vanguard Reports.

Staff at the Shoprite Ikeja Mall, who confirmed this to Vanguard said that the management has instructed that they stop accepting the old notes from Friday (February 10, 2023) adding that any staff that accepts the old notes will have the amount received deducted from their salary.

Our correspondent also learnt that major supermarkets in Lagos have started rejecting the old banknotes despite the Supreme Court order.

Meanwhile, banks may have pegged weekly cash supply to N1.5m per branch as scarcity of the new banknotes persists.

Providing insights into the continued scarcity, bank officials who spoke to Vanguard on condition of anonymity attributed the scarcity to low supply from the Central Bank of Nigeria, CBN.

According to them, before the currency redesign policy, each branch gets between N40 million and N50 million cash per day, mostly disbursed through ATMs.

A Tier-One bank senior official told Vanguard on Friday, “we were supplied N1.5 million on Monday evening, which we disbursed Tuesday morning. That is all we have gotten this week. “What we got this week was even lower than the N2 million that we got last week”.

As the official deadline by the CBN to submit old Naira notes ended last Friday without any information from the apex bank on the court order which vacated the deadline, the black market exchange for local currency took a toll as more banks’ branches closed shop for lack of new notes as well as fear for disruption of activities by unsatisfied customers who may not get cash to withdraw.

Banks’ customers that earlier deposited their old Naira notes to meet the deadline for submission regretted their actions as they could not get both new and old notes from the banks.

Financial Vanguard’s findings from banks visited across Lagos and Abuja also revealed that the banks were still collecting the old notes but not giving out the new ones, a situation which must have heightened the cash crunch in the country.

Moreover, the situation has also boosted the new cash market where both Point of Sales, PoS, operators and other businesses and individuals now trade the new banknotes.

Tricycle riders (Okada), petrol stations and some other businesses that generated cash in new notes now sell them at between 10 and 20 per cent premium.