Fakoyejo OlalekanPresident Muhammadu Buhari has defended the Naira redesign policy of the Godwin Emefiele-led Central Bank of Nigeria (CBN).
Buhari said all activities of the CBN as regards the Naira redesign policy 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.
He made this known on Thursday, 16 February 2023, during a nationwide broadcast to address the ripple effects of the implementation of the CBN policy.
Buhari admitted that the policy has encountered systemic and human difficulties during implementation, resulting in the extension of the deadline to phase out the old Naira notes from 31 January 2023 to 10 February 2023 for the completion of the process.
Prime Business Africa has reported that some Nigerians have resulted in attacking bank buildings and Point of Sale (PoS) outlets due to the difficulty in withdrawing their money.
Deposit Money Banks (DMB) have had to close early and their employees have also had to dress down due to fear of attacks.
According to the President, despite the setbacks in the implementation of the policy and hardship caused by the transition from old N200, N500 and N1,000 notes to new banknotes, Nigeria is beginning to benefit from the policy.
Explaining how the Naira redesign policy has started showing gains, Buhari revealed that in 2015 when this administration commenced its first term, Currency-in-Circulation was only N1.4 trillion, but it increased to N3.23 trillion.
Only N500 billion out of the N3.23 trillion cash in circulation was within the banking system, while N2.7 trillion remained permanently outside the system.
He said this distorted the financial policy and efficient management of inflation, hence, the decision to redesign the Naira notes to mop up the cash in circulation.
Buhari disclosed that the since Naira redesign policy took effect, about N2.1 trillion out of the banknotes held outside the banking system has been retrieved.
“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.”
Listing out the benefits of the recovery, Buhari mentioned;
- A strengthening of our macro economic 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
- Greater visibility and transparency of our financial actions translating to efficient enforcement of our anti-money laundering legislations.
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