Explains Naira Redesign Advantages

Says Elections Will Hold as Scheduled

President Buhari showed his fatherly side to a nation groaning in pains saying: “I am deeply pained and sincerely sympathise with you all, over these unintended outcomes” and announced his approval for the CBN that the old N200 bank notes be released back into circulation to cushion the effect of the Naira redesign policy on the polity.

In an early morning national broadcast to the nation, President Buhari sought to calm all frayed nerves and reduce tension in the country by craving for understanding and patience during this transient phase of implementation even as he granted a sixty-day extension to the N200 notes 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 it will cease cease to be legal tender.

He re-assured Nigerians, that strengthening the economy, enhancing security and blockage of leakages associated with illicit financial flows remain top priority of his administration. “And I shall remain committed to my oath of protecting and advancing the interest of Nigerians and the nation, at all times”

Giving a historical background to where we are now, the President obliged a few critical points underpinning the policy decision: “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.

“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. 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.

The President emphasized that 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.

He said the policy would help the 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.

The President also used the occasion to speak on the forth coming general elections assuring Nigerians of adequate security and protection during the election. His words: “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. 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.

Does the President’s Speech Overrule the Supreme Court Injunction?

Three State Governors of Kaduna, Kogi and Zamfara had approached the Supreme Court seeking a stoppage of the Naira redesign policy. They want an extension of the deadline stated by the CBN. The Supreme Court had penultimate Wednesday restrained the federal government’s move to stop the use of old naira notes on February 10, 2023.

The Supreme Court made up of a seven- member panel led by Justice John Okoro heard the case and granted an ex parte injunction sought by the plaintiffs. His words;” An order of Interim Injunction restraining the federal government through the Central Bank of Nigeria (CBN) or the commercial banks from suspending or determining or ending on February
10, 2023, the time frame with which the now older version of the 200, 500 and 1,000 denominations of the naira may no longer be legal tender pending the hearing and determination of their motion on notice for interlocutory injunction.”

Hearing in the case was fixed for February 15. But on that day, eleven more states have applied to join the suit. Nine of the 11 applications wanted to join the plaintiffs in the case. They are, Cross Rivers, Sokoto, Lagos, Ogun, Katsina, Ondo and Ekiti states while Bayelsa and Edo states, filed a joinder application to join the Federal Government who is the defendant in the case.

All eyes were on the Supreme Court whose premises was packed full on the next hearing day, Wednesday February 15 but most people left the Court disappointed as the Supreme Court postponed decision day, adjourn hearing because of the need for the joinders to file their briefs.

The Presidency had initially issued a statement that the President would say something after the Supreme Court sitting but since nothing substantial came from the Supreme Court in terms of subsisting order, the President proceeded to address the nation.

The President in his broadcast noted that “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.

Nevertheless, the President went ahead to give fresh directives on the N200 note in a matter some Lawyers have described as subjudice or contempt of the Court. But some other Lawyers argued that the Supreme Court lacks jurisdiction over the case. But the President said he had consulted widely before his speech and directive.

The matter will become clearer at the next hearing of the matter slated for February 22.

Reactions to the President’s Broadcast

Reacting to the President’s broadcast on Thursday, Prof Godwin Owoh, Executive Chairman of Society for Analytical Economics, Nigeria said: surprisingly, I don’t think it will address the supply stock of the currency. The currency is a creation of the law and as we stand today, the Supreme Court has made an order and in fact, by yesterday, the order is still subsisting. So, we expect a total compliance. So we have N1000, N500 and N200 as the res and the substance of the Currency redesign and you are only releasing N200, it does not solve the problem. It is difficult to give us a data on how many Nigerians are having N200 notes. Is it where the concentration is?

It creates tension among economic agents and it has not solved the issue of confidence on the Nigerian currency and the three denominations-N1000,N500 and N200. If you are to address the supply stock such that it will have positive impact in the three prices of interest rate, inflation rate and exchange rate. It has to be on all the currency. The quantum of money in circulation is not a function of a particular denomination that have been released. All the currencies have to be beefed up to actually have impact on the supply stock,so the economy would return to stability. So, we thank the President but it is not particularly good news.