President Muhammadu Buhari has directed the Central Bank of
Nigeria (CBN) to release old N200 notes into circulation to co-exist
with new N200, N500 and N1,000 banknotes for 60 days.
He, however, said old N500 and N1,000 banknotes are no longer legal tender in Nigeria.
The President, who made this known in a nationwide broadcast on
Thursday, directed the CBN to allow the new notes available to all
citizens.
The President apologised to Nigerians over the difficulty experienced in the implementation of the naira redesign policy.
“To further ease the supply pressure, particularly on our citizens, I
have given approval to the CBN that the old N200 bank notes be released
back into circulation and it should also be allowed to circulate as
legal tender with the new N200, N500 and N1,000 bank notes for 60 days
from February 10, 2023 to April 10, 2023 when the old N200 note ceases
to be legal tender,” he said.
The President had on February 3 appealed to Nigerians to give him
seven days to resolve the cash crunch after the Nigeria Governors’ Forum
urged him to allow all old notes to circulate in the system to ease the
hardship on ordinary Nigerians.
The Central Bank of Nigeria (CBN) had extended the deadline for the
swap of old N200, N500, and N1,000 from January 31 to February 10
following complaints by many Nigerians but the Supreme Court held that
the Federal Government, the CBN, commercial banks must not continue with
the deadline pending the determination of a notice in respect of the
issue.
Read the President’s Full Speech:
NATIONAL BROADCAST BY HIS EXCELLENCY MUHAMMADU BUHARI,
PRESIDENT, FEDERAL REPUBLIC OF NIGERIA ON THE CHALLENGES OF THE CURRENCY
SWAP AND STATE OF THE NATION, ON 16th FEBRUARY, 2023
My Dear Compatriots,
I have found it necessary to address you today, on the state of the
nation and to render account on the efforts of our administration to
sustain and strengthen our economy, enhance the fight against corruption
and sustain our gains in the fight against terrorism and insecurity
which has, undoubtedly, been impacted by several internal and external
factors.
2. Particularly, I am addressing you, as your democratically elected
President, to identify with you and express my sympathy, over the
difficulties being experienced as we continue the implementation of new
monetary policies, aimed at boosting our economy and tightening of the
loopholes associated with money laundering.
3. Let me re-assure Nigerians, that strengthening our economy,
enhancing security and blockage of leakages associated with illicit
financial flows remain top priority of our administration. And I shall
remain committed to my oath of protecting and advancing the interest of
Nigerians and the nation, at all times.
4. In the last quarter of 2022, I authorised the Central Bank of
Nigeria (CBN) to redesign the N200, N500, and N1000 Nigerian banknotes.
5. 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.
6. In appreciation of the systemic and human difficulties encountered
during implementation and in response to the appeal of all citizens, an
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.
7. Fellow citizens, while I seek your understanding and patience
during this transient phase of implementation, I feel obliged to avail
you a few critical points underpinning the policy decision. These
include:
a. 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.
b. 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;
c. 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;
d. 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
e. 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
8. Notwithstanding the initial setbacks experienced, the evaluation
and feedback mechanism set up has revealed that gains have emerged from
the policy initiative.
9. 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.
10. This represents about 80% of such funds. In the short to medium
and long terms, therefore, it is expected that there would be:
a. A strengthening of our macro economic parameters;
b. 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;
c. Lowering of Inflation as a result of the accompanying decline in money supply that will slow the pace of inflation;
d. Collapse of Illegal Economic Activities which would help to stem corruption and acquisition of money through illegal ways;
e. Exchange Rate stability;
f. Availability of Easy Loans and lowering of interest rates; and
g. Greater visibility and transparency of our financial actions
translating to efficient enforcement of our anti- money laundering
legislations.
11. 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.
12. 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 availability of appropriate amount of currency; and ability to
make deposits.
13. 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.
14. During the extended phase of the deadline for currency swap, I
listened to invaluable pieces of advice from well meaning citizens and
institutions across the nation.
15. I similarly consulted widely with representatives of the State
Governors as well as the Council of State. Above all, as an
administration that respects the rule of law, I have also noted that the
subject matter is before the courts of our land and some pronouncements
have been made.
16. 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 ceases to be legal tender.
17. 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.
18. Considering the health of our economy and the legacy we must
bequeath to the next administration and future generations of Nigerians,
I admonish every citizen to strive harder to make their deposits by
taking advantage of the platforms and windows being provided by the CBN.
19. Let me assure Nigerians that our administration will continue to
assess the implementation with a view to ensuring that Nigerians are not
unnecessarily burdened. In this regard, the CBN shall ensure that new
notes become more available and accessible to our citizens through the
banks.
20. I wish to once more appeal for your understanding till we
overcome this difficult transient phase within the shortest possible
time.
21. Fellow citizens, on the 25th of February, 2023 the nation would
be electing a new President and National Assembly members. I am aware
that this new monetary policy has also contributed immensely to the
minimization of the influence of money in politics.
22. This is a positive departure from the past and represents a bold
legacy step by this administration, towards laying a strong foundation
for free and fair elections.
23. I urge every citizen therefore, to go out to vote for their
candidates of choice without fear, because security shall be provided
and your vote shall count.
24. I however admonish you to eschew violence and avoid actions
capable of disrupting the electoral processes. I wish us all a
successful General Elections.
Thank you for listening. God bless the Federal Republic of Nigeria.
