If you followed the chatter in the West in late 2022 through early 2023, you might have thought Nigerians were heroically resisting an authoritarian push for a Central Bank Digital Currency. Social feeds were ablaze with talk of “Nigerians rejecting state money” and libertarians cheering an apparent triumph over government overreach.
I’m here to tell you: that’s not what happened.
No, the government wasn’t rolling out a CBDC. There was no ideological crusade to control the people’s money. What took place was far more mundane. It was a tactical, misguided move by the state to prevent vote buying ahead of the 2023 elections. Ordinary Nigerians suffered, riots erupted, banks were burned, and daily life was paralysed.
And yet – even in the chaos – there are lessons worth noting. Lessons that vindicate Austrian economic theory but make no mistake: this ordeal was not a victory for liberty.
The squeeze begins
In October 2022 the Nigerian government declared that the big naira notes – ₦200, ₦500, ₦1000 – were to be redesigned and the old ones would soon to be worthless. The Central Bank framed it as a noble crusade to choke off counterfeiting, curb kidnappers, flush out corruption, and usher in a cashless economy.
People dutifully poured their cash into banks, watched their balances ping on their phones, and then – surprise – discovered there was no fresh money available. Cash didn’t vanish, but it was throttled down to a trickle. Whatever little was released was hoarded or sold at a premium. PoS operators (kiosks Nigerians rely on for cash) charged up to 400% more just to hand over cash. Hospitals delayed treatment because families couldn’t pay upfront. Imagine being at your mother’s bedside, wallet full of “expired” cash, but powerless.
Everyday life stalled. There was no cash for transport or food and queues wrapped around banks like bread lines if Bernie Sanders becomes the US president. What they called a “currency redesign” felt more like state-sanctioned strangulation.
Streets on fire
Contrary to how Nigerians are known to respond to oppression, they rioted. Banks were attacked, branches burned; violent protests spread as Nigerians demanded access to their own money.
Western commentators misread it. Some libertarians cheered it as a grassroots revolt against CBDCs. Social feeds lit up: “Nigerians rejecting state digital money!” If only.
It wasn’t about CBDCs
It wasn’t about CBDCs, but about vote buying. In Nigeria, it’s very common to find party agents literally giving voters in poor communities 5,000 ($10) to vote for their party. It is for this – among other reasons – that Nigerian politicians stack warehouses to the ceiling with cash.
By revoking the legal tender status of old notes just before the 2023 elections, President Buhari’s camp neutered this machinery (or so he thought). Politicians couldn’t dump their billions into banks without raising alarm, nor convert them efficiently into new notes. Ordinary Nigerians endured weeks of agony.
After the election? The scarcity disappeared. Old and new notes now circulate side by side.
CBDC hype vs. Nigerian reality
To be clear, this wasn’t a push for CBDCs. Nigeria lacks the infrastructure to support a nationwide digital currency – not even close. Unreliable electricity, spotty internet, and limited banking access make it impossible. Cutting out cash would instantly shut perhaps 60% of the population out of the economy.
It also wasn’t a victory for liberty. While a few of us criticised the policy as a blatant violation of property rights, most of the government’s critics weren’t defending freedom – they were simply urging more investment in digital infrastructure so everyone could participate.
So no, liberty didn’t win. If anything, the episode showed just how easily Nigerians could be nudged toward CBDCs once the state finally builds the necessary systems.
It wasn’t all bad news
Not everything was a dumpster fire. Two lessons peek through:
1. The law of unintended consequences, front and centre
The policy was designed to short-circuit vote buying. Instead, it starved the poor. Banks hoarded the scarce new notes and sold them to the wealthy politically connected. Cash became a commodity. The vote buying didn’t stop, because the rich got all the cash, and the poor suffered
In cities where digital payments were common, the sudden flood of new users forced by the government’s policy overwhelmed the system – transactions failed, apps crashed, and everything ground to a halt. Worse still, many businesses began refusing transfers altogether – citing “network issues.” Behind the scenes, they just wanted cash. Cash they could resell to PoS operators for profit. Suddenly, cash wasn’t only king – it was contraband with a price.
This reenforced the Austrian lesson of unintended consequences
2. Menger was right; Chartalists weren’t
When the state’s paper dried up, trade didn’t. People improvised. In rural enclaves, the CFA franc jumped borderlines. Elsewhere, barter made a fierce comeback – bags of maize for chickens, fuel for beans. Markets adapted.
Had the squeeze lasted, Nigerians might’ve birthed a parallel money. That’s exactly what Carl Menger taught: money doesn’t arise because the state prints – money emerges from trade. Human action, not state decree. Buhari’s botched policy accidentally stage-lit that lesson.
In the end, two truths remain stubborn: meddling breeds unforeseen harm. And money’s roots dig deeper than any politician’s signature. A harsh lesson… but one lived, in real time.
Econ Bro (@EconBreau and @EconBreau2 on Twitter/X) is a Nigerian Austrolibertarian economist and an apprentice at the Mises Institute. Under the organisation name “The Freedom Institute” he teaches individual liberty, personal responsibility, private property rights, free markets, and sound money to mostly young people across Nigeria. Econ Bro is an Associate of the Free Market Foundation.
Excellent satire! "There was no cash for transport or food and queues wrapped around banks like bread lines if Bernie Sanders becomes the US president."