Nigerian President, Muhammadu Buhari has ordered the Central Bank of Nigeria (CBN) to release old N200 notes back into circulation to coexist with the new N200, N500, and N1000 banknotes for 60 days from February 10, 2023 to April 10 2023.
In a live broadcast on Thursday morning, the President assured that his administration will continue to assess the implementation with a view to ensuring that Nigerians are not unnecessarily burdened.
He recalled how he authorised the CBN to redesign the N200, N500, and N1000 Nigerian banknotes in the last quarter of 2022. “For a smooth transition, I similarly approved that the redesigned banknotes should circulate concurrently with the old bank notes, till 31 January 2023, before the old notes, cease to be legal tender.
“In appreciation of the systemic and human difficulties encountered during implementation and in response to the appeal of all citizens, extension of ten days was authorized till 10th February, 2023 for the completion of the process.
“All these activities are being carried out within the ambit of the Constitution, the relevant law under the CBN Act 2007 and in line with global best practices”, he said.
The President obliged to avail Nigerians a few critical points underpinning the policy decision which includes the need to restore the statutory ability of the CBN to keep a firm control over money in circulation. “In 2015 when this administration commenced its first term, Currency-in-Circulation was only N1.4trillion.
“The proportion of currency outside banks grew from 78%in 2015 to 85% in 2022. As of Oct 2022, therefore, currency in circulation had risen to N3.23 trillion; out of which only N500 billion was within the Banking System while N2.7 trillion remained permanently outside the system; thereby distorting the financial policy and efficient management of inflation.
“The huge volume of Bank Notes outside the banking system has proven to be practically unavailable for economic activities and by implication, retard the attainment of potential economic growth;
“Economic growth projections make it imperative for government to aim at expanding financial inclusion in the country by reducing the number of the unbanked population; and
“Given the prevailing security situation across the country, which keeps improving, it also becomes compelling for government to deepen its continuing support for security agencies to successfully combat banditry and ransom-taking in Nigeria”, he said.
Buhari who revealed that gains have emerged from the policy initiative, said he have been reliably informed that since the commencement of this program, about N2.1 trillion out of the banknotes previously held outside the banking system, had been successfully retrieved.
He said further that this has strengthening of Nigeria macro economic parameters; Reduction of broad money supply leading to a deceleration of the velocity of money in the economy which should result in less pressures on domestic prices;
Lowering of Inflation as a result of the accompanying decline in money supply that will slow the pace of inflation; Collapse of Illegal Economic Activities which would help to stem corruption and acquisition of money through illegal ways.
“Exchange Rate stability; Availability of Easy Loans and lowering of interest rates; and Greater visibility and transparency of our financial actions translating to efficient enforcement of our anti- money laundering legislations”.
Buhari who was not unaware of the obstacles placed on path of innocent Nigerians by unscrupulous officials in the banking industry, entrusted with the process of implementation of the new monetary policy, pained and sympathised with Nigerians, over these unintended outcomes.
To stem this tide, he directed CBN to deploy all legitimate resources and legal means to ensure that citizens are adequately educated on the policy; enjoy easy access to cash withdrawal through availability of appropriate amount of currency; and ability to make deposits.
“I have similarly directed that the CBN should intensify collaboration with anti-corruption agencies, so as to ensure that any institution or person(s) found to have impeded or sabotaged implementation should be made to bear the full weight of the law”, the President said.