The Central Bank of Nigeria (CBN) has been instructed by President Muhammadu Buhari to coexist with the new N200, N500, and N1,000 banknotes for 60 days.
The old N500 and N1,000 banknotes are no longer considered legal cash in Nigeria, according to the President, who announced this in a countrywide broadcast on Thursday. However, he ordered the Central Bank of Nigeria to make the new notes available to all Nigerians.
The President did, however, apologise to Nigerians for the challenges encountered in carrying out the naira redesign strategy.
“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.
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“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,” he said.
“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.”
When he took office in 2015, there were N1.4 trillion in circulation. By the end of 2022, there will be N3.23 trillion in circulation, the President bemoaned. However, he said that since the Federal Government’s naira redesign strategy was instituted on October 26, 2022, N2.1 trillion of the currency in circulation had been reclaimed.
After the Nigeria Governors’ Forum encouraged him to permit all old notes to circulate in the system to lessen the suffering on regular Nigerians, the President had on February 3 appealed to Nigerians to give him seven days to fix the cash issue.
Following complaints from many Nigerians, the Central Bank of Nigeria (CBN) extended the deadline for the swap of old N200, N500, and N1,000 from January 31 to February 10; however, the Supreme Court ruled that the Federal Government, the CBN, and commercial banks may not continue with the deadline pending the outcome of a notice in relation to the issue.
