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Nigeria extends AML initiative deadline to hand in old banknotes amid anger over cash shortages

NIGERIA has extended the deadline for returning outdated banknotes by another 60 days after cash shortages fueled public outrage ahead of next week's national elections.

President Muhammadu Buhari gave the central bank permission to extend the deadline on Thursday.

The decision comes barely a week before the FATF Plenary meeting.

Last year, Nigeria's central bank chose to begin circulating newly printed 1,000 ($2.17), 500, and 200 naira notes. The deadline for returning old notes has already been extended until Feb. 10, after which they will no longer be legal tender.

Buhari has pushed the proposal, claiming that it will increase transparency in financial transactions, minimise money laundering, and lower the economy's money supply.

However, the new notes are in low supply, resulting in long lines and chaotic scenes at banks across the country. The majority of Nigeria's economy is still informal, and many people conduct transactions with cash because they do not have bank accounts.

On Thursday, local media reported that irate locals vandalised cash dispensing machines at several banks in southern Nigeria to protest cash shortages.

Buhari stated on television that old 200 notes would continue to circulate alongside new 1,000, 500, and 200 notes until April 10.

But, the old 1,000 and 500 notes may only be exchanged at the central bank and "authorised sites," according to him.

The remarks contrasted with the Supreme Court's interim order last week, which stated that all old notes remain legal tender until the court reviews a challenge lodged by several state governments.

“Notwithstanding the initial setbacks experienced, the evaluation and feedback mechanism set up has revealed that gains have emerged from the policy initiative,” said Buhari.

Several lawmakers have criticised the timing ahead of the February 25 elections, citing the fact that campaigns are largely supported by hard-to-trace cash.


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