The Central Bank of Nigeria’s efforts to tackle inflation and ensure cash circulation may be undermined as businesses and individuals across the country begin to reject the N50 and N100 notes.
Metrobusinessnews.com (MBN) investigations reveal that there is a widespread refusal to accept the lower denominations, forcing many transactions to start from N500 and above.
The implication, according to some analysts is that prices of goos and services will continue to rise as the common denominator, being the N500, would ensure that lower notes gradually go out of circulation.
CBN confirmed it received complaints that some members of the public and businesses doubt the legal tender status of the notes, particularly the standard N100 note.
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The development comes as the CBN intensifies efforts to mop up excess liquidity and control inflation through monetary tightening. Analysts say the rejection of lower denominations could distort price discovery and worsen cash scarcity at the retail level.
The apex bank has now clarified that both the commemorative and standard N100 notes remain valid legal tender and warned that those rejecting them risk sanctions.
In a press statement issued on Wednesday, the apex bank said it had received reports that some members of the public, businesses and other stakeholders were rejecting the standard ₦100 note over doubts about its legal tender status.
The CBN clarified that both the commemorative ₦100 banknote and the standard ₦100 banknote remain valid for transactions across the country.
“For the avoidance of doubt, the CBN hereby reiterates that both the commemorative ₦100 banknote and the standard ₦100 banknote remain legal tender in Nigeria and must be accepted for all transactions,” the statement read.
The bank explained that the commemorative ₦100 note, introduced to mark Nigeria’s centenary, did not replace the existing standard ₦100 banknote.
The CBN warned individuals, businesses, financial institutions and other economic agents against refusing the standard ₦100 note, describing such actions as a breach of the law.
“Such rejection constitutes a violation of the provisions of the CBN Act and undermines confidence in the national currency. The Bank will not hesitate to apply appropriate enforcement measures against any person or entity found to be in breach,” the statement said.
The apex bank said it remains committed to protecting the integrity of the naira, maintaining confidence in all duly issued banknotes and ensuring smooth currency circulation across the country.
It also called on Nigerians to accept and transact with all banknotes legally issued by the Central Bank of Nigeria.
“For further clarification, members of the public are also advised to contact the CBN through its official communication channels,” the statement said.
The abakysts urge CBN to follow thebthreat with action and as well go beyond the N100.
“It is true that the minimum transaction of N500 is gradually becoming the norm in markets and businesses as Nigerians reject N50 and N100 notes. With the clarification, the CBN should go beyond the N100, as other lower bills like N50 have since gone out of extinction. Set up a task force to enforce the sanctions,” says an analyst.