President Muhammadu Buhari on Thursday morning addressed the nation in a broadcast from the presidential villa in Abuja. The address came following tensions occasioned by the naira swap policy of the Central Bank of Nigeria (CBN).
This is his first official broadcast in 2023.
During his speech, the president empathised with Nigerians on the challenges experienced due to the new monetary policies, which he noted were aimed at boosting the economy and tightening the loopholes associated with money laundering.
He also reaffirmed his commitment to protecting and advancing the interest of Nigerians and the nation, at all times.
Below are five key takeaways from President Buhari’s address on naira redesign policy.
The purpose of redesigning the Naira
During his speech, President Buhari highlighted that the naira redesign policy was for the following reasons:
- To restore the CBN’s statutory ability to keep a firm control over money in circulation. The president noted that in 2015, the currency in circulation was N1.40 trillion, 78 per cent of which was not within the bank’s control.
- As of October 2022, currency in circulation had risen to N3.23 trillion; out of which only N500 billion was within the banking system while N2.70 trillion remained permanently outside the system, thus distorting the financial policy and efficient management of inflation. The president noted that the huge volume of banknotes outside the banking system adversely affected the attainment of potential economic growth as it was unavailable for economic use.
Old N200 note remains legal tender till April 10
The president, in an effort to ameliorate the effect of the new naira policy on the citizenry, has approved the use of the old N200 note as legal tender for the next 60 days. This means that the old N200 banknotes are to be released back into circulation and Nigerians will be able to trade with the old N200 banknote. However, by Monday, April 10 the old N200 note will cease to be legal tender.
Old N500, N1000 notes no longer tenable for transactions
The president did not reinstate the use of the old N500 and N1000 bank notes, thus, indicating that they were no longer legal tender in the country. Rather, he said “In line with Section 20(3) of the CBN Act 2007, all existing old N1000 and N500 notes remain redeemable at the CBN and designated points.”
He also appealed to all citizens to strive harder to make their deposits by taking advantage of the platforms and windows being provided by the CBN.
Also, given the prevailing security situation across the country, the government needed to deepens its support for security agencies to successfully combat banditry and ransom-taking in Nigeria.
What the policy will achieve
The naira redesign policy in the short to medium and long terms is expected to strengthen our macroeconomic parameters, lower Inflation, and collapse illegal economic activities which will in turn stem corruption and acquisition of money through illegal ways, enhance exchange rate stability, ensure visibility and transparency of financial actions translating to efficient enforcement of our anti-money laundering legislations.
Alluding to the short-term goals, the president disclosed that about N2.10 trillion out of the banknotes previously held outside the banking system had been successfully retrieved.
Policy saboteurs will face the full weight of the law
The president informed that he has directed the CBN to intensify collaborations with anti-corruption agencies, towards ensuring that institution(s) or person(s) found to have impeded or sabotaged the implementation will be made to bear the full weight of the law.
