President Muhammadu Buhari has ordered the Central Bank of Nigeria (CBN) to reinject the old 200 naira notes and allow it co-exist with the redesigned N200, N500 and N1000.
The president announced this Thursday in a national broadcast monitored by Blueprint in Abuja, even as Nigerians continue to bemoan the policy which has disrupted the nation’s business space.
Buhari said only the N200 old naira notes would remain a legal tender till Monday, April 10.
He said: “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.”
“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,” the president also said.
Redesigned notes
The president had in October 2022, approved the CBN’s request to redesign the N200, N500 and N1000 in place of the old naira notes by the end of January 2023. This was however extended to February 10.
But ahead of the deadline, the Supreme Court ruled that the old notes should co-exist with the new ones pending when the cause would come up for hearing Wednesday February 15.
And notwithstanding to the Supreme Court order, the CBN insisted the February 10 remained sacrosanct, a development that led to banks, filling stations and other centres of business activities rejecting the affected notes.
And in a show of their angst occasioned by shortage of cash and other related issues, youth in some states of the federation went on violent protests, attacking and vandalizing some ATMs and banks.
Buhari
However, in a national broadcast, President Buhari sympathised with Nigerians over the difficulties in accessing the new Naira notes.
He said: “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.
“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 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.”
Reasons for the policy
Providing some insights into the policy, Buhari said it became imperative because of 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 N1.4 trillion.
“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;
“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 further said: “Notwithstanding the initial setbacks experienced, the evaluation and feedback mechanism set up has revealed that gains have emerged from the policy initiative. 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 said “it is expected that there would be a strengthening of our macroeconomic 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.”
While sympathising with Nigerians for the “obstacles placed on the path… by unscrupulous officials in the banking industry, entrusted with the process of implementation of the new monetary policy,” the president said measures had been put in place to correct the trend.”
He said: “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.
“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 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.”
Directs CBN/Reps collaboration
Similarly, President Buhari receivedbriefing from members of the House of Representatives Ad-hoc Committee on cashless policy and Naira swap, during which he directed the CBN to collaborate with the lawmakers to sort the problematic areas in the cashless policy.
Leader of the committee and House Leader, Ado Doguwa in an interview with journalists after the meeting, Thursday, said he told the president the policy was against the ruling All Progressives Congress (APC) and making the party unpopular.
The meeting also had in attendance CBN Governor Godwin Emefiele, representative of the Attorney General of the Federation, AGF, and Minister of Justice, the Inspector-General of Police Baba Alkali, Director-General Department of State Services, Magaji Bichi, Permanent Secretary State House Tijani Umar and the Economic Adviser to the President, Adedoyin Salami.
Doguwa said he told Buhari that the committee would continue to interface with the CBN in the implementation of his directives, adding that the Green Chamber won’t hesitate to invoke the instrumentality of law to call the CBN boss to order if he derails from implementing the directive.
“One important thing I want to stress is that Mr. President has addressed most of the issues we want to raise with him at the national broadcast this morning. But that notwithstanding, Mr. President allowed us to meet him believing the fact that the committee coming to him represents the institution of the National Assembly.
“And when you have issues to do with policies of government, you have matters that border on lives and livelihood of our people, the best institution to speak for Nigerians is this institution, the National Assembly and in this case, the House of Representatives.
“What excites us is that when we met Mr. President, he was already on ground with those agencies that have something to do with this issue of naira redesign and naira swap. The CBN governor was there at his instance, the representative of the Ministry of Finance was there, the AGF was also represented there, the Inspector General of Police was also there.
“We came to say to Mr. President that in spite of his broadcast this morning, in spite of the fact that he has told the CBN to make some amendments, to take some new steps to ameliorate the hardship this policy has already entrenched in our economy which is impacting negatively on the lives and livelihoods of Nigerians, we told Mr. President clearly that it is not yet Uhuru.
“For instance, the Central Bank has been directed to make money available, this new naira notes should be made available. But how do we ensure that Mr. President’s directive is being carried out? That cannot be guaranteed. Thank God that Mr. President addressed us and addressed the CBN governor once again to our face and we used the opportunity to also tell the CBN governor that ‘you must go around to implement the directive of the President as contained in the letters of his speech; not a matter of perception, not a matter of being professional. You cannot be more professional than the feelings of the actual players in the market place of the economy.
“No matter what policy you want to bring; no matter how good or decent that policy is, as long as it brings about hardship, pressure to the system, then that policy must be deemed to be otherwise. It is on this note that we told Mr President that we would continue to interface with relevant agencies especially the CBN governor.
“Of course while we are discharging our constitutional right to oversight every institution of government, we must ensure that the directive of Mr. President is carried out to the letter, failure to do that we must involve every instrumentality of the law, legislative instrumentality, to ensure that Presidential orders are being abided by and ensure that the laws of the land are also being respected,” he said.
Returning old notes to CBN
On the return of the old notes to the CBN, the lawmaker said: “I want to acknowledge that in Mr President speech, that he has come on the same page with us as regards the interpretation of the Section 20(3) of the CBN Act that states very clearly that if the bank note is redesigned, the old currency must be redeemable at time of presentation either at the Central Bank or at the commercial banks.
“This is contained in Mr. President’s speech which otherwise not the CBN governor, he said that could be redeemable at the Central Bank. The constitution says that the money must be redeemable at the banks.
“With due respect, can our local traders have access to the Central Bank? Certain policies are made and when those policies are seen to be quite impracticable and inimical to the development of the economy, those of us in the House of Representatives will blow the whistle.
“We have blown this whistle in the National Assembly and we have come this far to blow this whistle to Mr. President while thanking him for the new steps he has taken to cushion the effects of this unfortunate policy.”
Effect on APC
Speaking further on the effects of the policy on APC, he said: “Of course, I took special apology to some of our colleagues who are not members of our party, but I as a member of the ruling party, told Mr. President that the policy in itself is a policy that is against the ruling party, my party because it’s a government policy, Muhammadu Buhari government, government of the APC.
“And Nigeria’s at time of elections are now looking at my government coming up with an unpopular policy. Unpopular because it does not matter if the policy may be seen to be professionally good. Some us see a lot of things good about the policy, but our worry as members of the ruling party is why now? 30-40 days to elections you come out with a policy that is not widely accepted by Nigeria’s and whether we like it or not that will be seen as the program of government.
“So those of us in the APC are not happy about it and I believe some of my colleagues in other parties would not see this as a good policy. Not good because the time is absolutely wrong.”
“But why do you want us to be cashless at a time when we are facing a general elections where security apparatus working to protect the election process would require cash to service their logistics?
“Why will you insist on cashless when even INEC has raised a lot of fears that cash is needed to carry out activities by the electoral commission.
“I need to have N70 million in hard copy, the law has permitted it and as I speak to you, I don’t have it. ATM stations have turned to wrestling grounds.”
Allow the policy work- Emefiele
In all of this, the CBN governor, Mr. Emefiele, also appealed to Nigerians to allow the Naira redesign policy of government work.
Speaking after the meeting at the State House, he said allowing the currency swap work would go a long way to help the nation’s economy.
Emefiele also stated that he met with 15 bank executives and directed them to make the N200 notes available immediately.
He said: “The truth is that we are all servants. We are serving Nigerians. As far as we are concerned the Attorney General has spoken on this matter and the President has sealed the whole issue this morning in his broadcast.
“I think I can only just appeal to Nigerians, let’s allow this policy to work. This policy is one policy that goes to reduce the problem of corruption and illicit financial flaws.
“This policy goes to resolve some of the problems in the economy, this policy also goes to reducing the level of insecurity in the country. So, these three issues which are the tripod of this administration’s policy are all embedded in this policy. We should just allow it to work.
“We keep saying this, there are some temporary pains, but I can assure Nigerians that the long-run benefit to Nigeria is overwhelming and we should just give it a chance to work.”
On what Nigerians should expect after Buhari’s directive, Emefiele said: “I have met with about fifteen banks this morning and we have given them directive on go to get all the old N200 available effective today. And I can assure Nigerians this will help reduce the pain. We meet with the bankers at least once daily to get feedback and the rest of them and I think we should just allow this to work, the temporary pains are regrettable but I can assure Nigerians that it will be well.”
Gbajabiamila faults FG on S/Court
Also raising his voice, Speaker House of Representatives Femi Gbajabiamila faulted the federal government’s decision to disregard the Supreme Court order on the issue of currency swap.
In a statement he personally signed Thursday in Abuja, Gbajabiamila said: “This morning, President Muhammadu Buhari, GCFR, announced that he has authorised the Central Bank of Nigeria (CBN) to reintroduce the old N200 notes into circulation, pending when the Bank can make sufficient amounts of the new currency available. This is a step in the right direction, and I hope it helps curb Nigerians’ suffering.
“However, the decision still falls short of the order of the Supreme Court that the old currencies remain legal tender pending the adjudication of a pending suit brought by state governments on the legality of the policy and its implementation.
“It is not to the benefit of our country for the Federal Government to act in ways that suggest a wanton disregard for the rule of law. It will be better for us to strictly adhere to the court’s order in this matter pending the adjudication of the substantive suit.
“For the sake of our country, we must work together to resist actions that escalate tensions and endanger our democracy at this crucial moment of national awakening and rebirth.
“In all things, let the well-being of our fellow citizens and the survival of our nation be foremost in our hearts and guide all the decisions we make in this historic moment”, he said.
…CDD too
Similarly, the Centre for Democracy and Development (CDD) also said the President lacked the authority to override any court in the land.
In a statement issued Thursday in Abuja, CDD Director Idayat Hassan urged the president to immediately purge himself of his unconstitutional overreach and align himself with the ruling of the apex court.
She said for a government with a history of routinely disobeying court orders, this goes beyond the fine details of policy preferences.
The CDD said: “We note, with concern, the President’s decision to unfortunately take steps contrary to the position of the Supreme Court on a case concerning the policy; this is sub-judice. The apex court ruling on the implementation of the redesign policy is that the old notes remain legal tender until the court gives a final verdict.
“It therefore amounts to a flagrant disobedience and violation of the orders of the highest court in the land for the President to carry on as if the ruling of the Supreme Court is of no effect.
“CDD is convinced that this is an egregious affront on the rule of law, and the principle of separation of powers. In a constitutional democracy, which is anchored on the rule of law and separation of powers, the President’s action amounts to an unconstitutional power grab, which degrades our democracy.
“President Buhari’s decision has dire consequences for the 2023 general elections, which are less than 10 days away. Observers from all over the world are in Nigeria to witness the elections and report on the growth of the Nigerian democracy.
“This flagrant side-stepping of the Supreme Court’s decision does no good for our nation, the elections and the democracy we have collectively nurtured over the last 23 years.
“With less than 120 days to the end of the president’s second and final term in office, we believe this is a clear opportunity for President Buhari to loudly show his support for the rule of law, and live up to the promise he made the Nigerian people to be a reformed democrat.”