President Muhammadu Buhari has instructed the Central Bank of Nigeria (CBN) to shift the deadline for the usage of old N200 notes until April 10, 2023. The directive was issued during a national broadcast on Thursday, the 16th of February.
In his speech, he noted, “To further ease the supply pressures, particularly to our citizens, I have given approval to the CBN that the old N200 bank notes be released back into circulation and that it should also be allowed to circulate as legal tender with the new N200, N500, and N1000 banknotes for 60 days from February 10, 2023, to April 10, 2023, when the old N200 notes cease to be legal tender.“
N2.1 Trillion Retrieved – President Buhari
The president also spoke on the amount of currency in circulation. He stated that out of the N2.7 trillion that existed outside the banking system as of October 2022, the currency redesign program successfully mopped up N2.1 trillion worth of naira notes.
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“The proportion of currency outside banks grew from 78%in 2015 to 85% in 2022. As of October 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.
“I 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.
“This represents about 80% of such funds. In the short to medium and long terms.”
The president highlighted some of the benefits of decreasing the quantity of Naira notes outside the banking system which include:
- A strengthening of Nigeria’s macroeconomic parameters
- Reduction of broad money supply leads to a deceleration of the velocity of money in the economy which should result in fewer pressures on domestic prices.
- Lowering of Inflation as a result of the accompanying decline in the money supply that will slow the pace of inflation.
- The collapse of Illegal Economic Activities would help to stem corruption and the acquisition of money through illegal ways.
- Exchange Rate stability
- Availability of Easy Loans and lowering of interest rates
- Greater visibility and transparency of our financial actions translate to efficient enforcement of our anti-money laundering legislation.
President Buhari in his address blamed some of the hardship faced by Nigerians on “unscrupulous officials in the banking industry”.
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“I am not unaware of the obstacles placed on the path of innocent Nigerians by unscrupulous officials in the banking industry, entrusted with the process of implementation of the new monetary policy. I am deeply pained and sincerely sympathise with you all, over these unintended outcomes.
“To stem this tide, I have directed the CBN to deploy all legitimate resources and legal means to ensure that our citizens are adequately educated on the policy; enjoy easy access to cash withdrawal through the availability of the 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 the implementation should be made to bear the full weight of the law.”
