On Thursday, President Muhammadu Buhari addressed Nigerians on the Central Bank of Nigeria’s naira swap policy (CBN).
President Buhari directed the apex bank to circulate old N200 notes alongside new N200, N500, and N1,000 banknotes for 60 days in a nationwide broadcast on Thursday.

The Nigerian leader also expressed sympathy for the difficulties encountered in the implementation of the naira redesign policy and apologized for the suffering endured thus far.

Here are the five most important points from the President’s speech.

Launch of the Naira Redesign

He said: “In the last quarter of 2022, I authorised the Central Bank of Nigeria (CBN) to redesign the N200, N500, and N1000 Nigerian banknotes.

“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, an extension of ten days was authorized till 10th February, 2023 for the completion of the process. All of these activities are carried out in accordance with the Constitution, the relevant law under the CBN Act 2007, and global best practices.”

Implementation of the Currency Transition
The president asked for Nigerians’ patience and understanding during this transitional period of the naira redesign policy’s implementation.

“Fellow citizens, while I seek your understanding and patience during this transitional phase of implementation, I feel obligated to provide you with a few critical points underpinning the policy decision,” he said. These are some examples:

“The need to restore the CBN’s statutory ability to maintain firm control over money in circulation. When this administration began its first term in 2015, the currency in circulation was only N1.4 trillion.

“The proportion of currency held outside of banks increased from 78% in 2015 to 85% in 2022. As of October 2022, currency in circulation had risen to N3.23 trillion, of which only N500 billion was within the Banking System, while N2.7 trillion remained permanently outside the system, distorting financial policy and efficient inflation management.”

Economic Implications
According to the President, the large volume of bank notes outside the banking system has proven to be virtually unavailable for economic activity.

“The huge volume of Bank Notes outside the banking system has proven to be practically unavailable for economic activities, thereby retarding the attainment of potential economic growth,” he said.

“Economic growth projections necessitate the government’s goal of expanding financial inclusion in the country by reducing the number of unbanked people; and

“Given the country’s current security situation, which is improving, it also becomes compelling for the government to deepen its ongoing support for security agencies in order to successfully combat banditry and ransom-taking in Nigeria.”

“Despite the initial setbacks, the evaluation and feedback mechanism established has revealed that gains have resulted from the policy initiative.

“I have been reliably informed that, since the start of this program, approximately N2.1 trillion in banknotes previously held outside the banking system have been successfully recovered.”

New Naira Note Regulations
The President expressed his sympathies to Nigerians for the difficulties encountered in the implementation of the naira redesign policy and directed the CBN to release old N200 notes into circulation for 60 days in order to coexist with new N200, N500, and N1,000 banknotes.

“I am not unaware of the impediments placed in the path of innocent Nigerians by unscrupulous banking officials entrusted with the process of implementing the new monetary policy,” he said. I am deeply saddened by these unintended consequences and sincerely sympathize with you all.

“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, have easy access to cash withdrawals due to the availability of the appropriate amount of currency, and the 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.

“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.

“I similarly consulted widely with representatives of the State Governors as well as the Council of State. Above all, as an administration committed to the rule of law, I have noted that the matter is currently before our nation’s courts, and some pronouncements have been made.

“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.

“According to Section 20(3) of the CBN Act 2007, all existing old N1000 and N500 notes are still redeemable at the CBN and designated points.

“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.

“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 will make new notes more widely available and accessible to our citizens through banks.

“I’d like to ask for your patience once more until we get through this difficult transition period as soon as possible.”

Money’s Influence on Politics
According to the President, the new monetary policy has also greatly contributed to reducing the influence of money in politics ahead of the upcoming general elections.

“Fellow citizens, on February 25th, 2023, the nation will elect a new President and National Assembly members,” he said. I am aware that this new monetary policy has also greatly contributed to the reduction of money’s influence in politics.

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