Nigeria circulates new-colour banknotes

Press, 26 April 1984, Page 10

Nigeria circulates new-colour banknotes

NZPA-Reuter Lagos A big run on Nigerian commercial banks was expected today as an order by the ruling military authorities to change the country’s banknotes went into effect. Senior bank officials said that they expected the change-over to notes of new colours, announced on Tuesday and aimed at stemming heavy illegal trafficking in the naira, would create temporary chaos as people scrambled to change their money before the May 6 deadline.

The order allows individuals to change up to 5000 naira ($NZ10,108) without question but amounts above that must be deposited in banks and fully explained. The authorities simultaneously announced the closure of Nigeria’s land borders to prevent people bringing in

stockpiles of naira believed to have been smuggled out in huge quantities despite the currency’s non-convert-ible status.

Travellers arriving at the country’s international airports are being subjected to thorough checks for naira. The Government of Senegal has said that it will deal ruthlessly with anyone caught trying to smuggle naira notes.

The currency change was welcomed by most Nigerians, who had criticised the military for moving too slowly against corruption since toppling a civilian government in a coup in December. Bankers said that the move would hit foreign financial institutions which the Nigerian Government has often accused of illegally changing naira at rock-bot-tom rates.

The current official ex-

change rate for the naira is US72c. But it trades on the black market for hard currency for as little as a third of its official value.

Leading businessmen were also enthusiastic, saying that the move would kill the black market, at least temporarily, and reduce finance for smuggling that put goods into Nigerian markets at lower than retail prices. But it will also catch many Nigerian traders who normally deal in cash, mistrusting the slow banking system. The currency change-over was planned in secrecy. The new notes were printed in London and flown to Lagos just before the announcement to ensure that no word leaked out.

Banks will be open from early in the morning until early evening including week-ends until May 6.