The central bank wants to cut the money supply to fight inflation, but the shortage of new bills has sparked anger ahead of the election.
Nigeria’s Supreme Court has stopped the government from setting a Friday deadline for citizens to exchange their old currency for the new currency after the International Monetary Fund (IMF) announced it had disrupted transactions and payments.
Nigerians had to exchange the old 1,000, 500 and 200 naira notes (worth $2.17, $1.09 and $0.43) in exchange for new notes by Friday as part of the central bank’s strategy to curb currency fluctuations and control double-digit inflation.
The plan has sparked controversy with people saying there aren’t enough new notes, leading to a panic at banks and a lack of cash.
Some politicians have criticized the deadline set for the February 25 election of a new president by lawmakers because campaign funding is hard to come by.
High Court Judge John Inyang Okoro said Wednesday’s decision to postpone the deadline was unanimous, pending three countries’ objections to the alleged process of changing the documents before the elections.
The court is expected to hear the countries’ arguments on February 15.
On Wednesday, the country’s representative of the IMF urged Nigeria’s central bank to consider extending the deadline in view of the chaos caused by the lack of new notes in a country where many people do not have bank accounts.
In another controversy surrounding currency exchanges, the central bank has said it will reduce fraud because the security features of the new notes will make them harder to write. The bank ultimately wants to move to a cashless economy.
About 1.3 trillion naira ($2.8bn) in old notes have been deposited in the bank since the October announcement, it said.
Some leaders of the ruling party have accused the central bank of a plot to turn voters against Bola Tinubu who will stand in the presidential election.
Tinubu is running against 17 other candidates, but he and three others are leading: Atiku Abubakar of the People Democratic Party, Peter Obi of the Labor Party and Rabiu Kwankwaso of the New Nigeria People’s Party.
President Muhammadu Buhari is not contesting as he will complete his constitutionally mandated two terms in May.
Inflation and the economic collapse are likely to be a major concern for voters, many of whom say life is more difficult than when Buhari took office in 2015.