Buhari: No Going Back on Naira Redesign

*Insists nobody will be allowed to mobilise resources and thugs to intimidate people

*CBN reiterates commitment to real sector intervention

*LCCI urges apex bank to convert lower naira denomination to coins 

Deji Elumoye in Abuja and Nume Ekeghe in Lagos

President Muhammadu Buhari has declared that his government would not go back on the planned redesign of N1, 000, N500, and N200 notes by the Central Bank of Nigeria (CBN). Buhari said this Wednesday evening in London, shortly after meeting with King Charles III at the Buckingham palace.

The president said the naira redesign policy announced last month by the CBN governor, Godwin Emefiele, had come to stay.
“No going back,” Buhari said of the decision to reshape the three naira notes.

Relatedly, the CBN disclosed that it would continue to foster and support interventions that facilitate macroeconomic stability. The apex bank’s Director, Corporate Communications Department, Mr. Osita Nwanisobi, said this yesterday in Lagos on CBN’s Special Day at the on-going Lagos International Trade Fair.
The Lagos Chamber of Commerce and Industry (LCCI) called on the CBN to turn the lower denominations of the naira from notes to coins. Deputy President, LCCI, Mr. Gabriel Idahosa, who made the appeal, said the change of the lower denominations to coins would save the country the burden of producing low-value notes with short lifespan.

Buhari said enough time had been given by the CBN for Nigerians to deposit the present naira notes at banks in exchange for the newly redesigned ones, which would be issued by December 15.

He stated, “On this change of currency, there will be a lot of money but time has been given from October to December, three months is enough for whatever money you have, to get it changed through the legal system. So, I don’t know why people are complaining about it.”
Buhari also said politicians would not be allowed to mobilise resources and thugs to intimidate voters in the 2023 general election.
“My aim is to make sure that Nigerians believe that we respect them as an administration,” he stated.

The president added, “So, Nigerians should vote for whoever they like from whichever political party. Nobody will be allowed to mobilise resources and thugs to intimidate people in any constituency. That is what I want to go down in Nigerian history for as a leader.”
Buhari had last month doused the tension surrounding the plan by the CBN to redesign and replace N1, 000, N500, and N200 notes by declaring that the decision had his backing. He said he was convinced that the country stood to gain immensely from the currency change.

Speaking in a Hausa radio interview, Buhari had said the reasons given to him by the CBN convinced him that the economy stood to benefit in terms of reduction in inflation, currency counterfeiting, and the excess cash in circulation. He said he did not consider the period of three months for the change to the new notes as short.
“People with illicit money buried under the soil will have a challenge with this, but workers, businesses with legitimate incomes will face no difficulties at all,” the president had stated.

In the interview, the president also addressed the issues of food security and national security, among others.
In an apparent move to tackle vote-buying and control the amount of money in circulation, the CBN last month announced a redesign of the currency in the variations of N200, N500, and N1, 000.

But beyond the reasons officially adduced, many believe campaign financing, money laundering, terror financing, ransom payment to kidnappers, and other illicit transactions would be adversely affected by the change.

Emefiele had pointed out that the change was sequel to approval by Buhari. He added that the development was also aimed at checking the increasing ease and risk of currency counterfeiting evidenced by several security reports, and the increased risk to financial stability as well as the worsening shortage of clean and fit currency, with the attendant negative perception of the central bank.

Emefiele said there was significant hoarding of naira notes by members of the public, with statistics showing that over 80 per cent of the currency in circulation was outside the vaults of the commercial banks. He said as of September 2022, a total of N3.2 trillion was in circulation, of which N2.73 trillion was outside the vaults of the banks, describing the development as unacceptable.

Emefiele explained that the new and existing notes would remain legal tender and circulate together until January 31, 2023, when the existing currencies shall cease to be legal tender.

He said all banks currently holding the existing denominations of the currency might begin to return the notes to the CBN immediately, adding that the newly designed currency would be released to the banks on a first come, first served basis.
Emefiele also urged bank customers to begin paying into their bank accounts the existing currency notes to enable them to withdraw the new banknotes once circulation begins mid-December 2022. He said all banks were expected to keep open their currency processing centres from Monday to Saturday so as to accommodate all cash that would be returned by their customers.

The CBN governor also said for the purpose of the transition to the new notes, bank charges for cash deposits had been suspended with immediate effect. He added that no bank customer should bear any charges for cash returned/paid into their accounts.

Emefiele had emphasised that in the meantime, the present notes remained legal tender and should not be rejected as a means of exchange for the purchase of goods and services. He reassured the public that the CBN would continue to monitor both the financial system, in particular, and the economy, in general, and always act in good faith for the achievement of the bank’s objectives and the betterment of the country.

Meanwhile, the CBN said it was committed to ensuring the economy was resilient in order to endure unanticipated shocks.
Nwanisobi, who was represented by the CBN’s acting Director, Corporate Communications Department, Mr. Sam Okogbue, at the trade fair said, “The CBN governor, Mr. Godwin Emefiele, and his team are resolute in steering the ship of Nigeria’s economy to prominence.

“The focus of the bank is macroeconomic stability, which entails building a strong, stable, and resilient economy that is self-sustaining and able to weather unanticipated shocks.
“This, the bank will do, by applying appropriate monetary policy tools, striving to rein in inflation, and continuously encouraging a productive economy through its interventions.

“We have no other country than Nigeria, and it is our collective responsibility, as Nigerians, to make the country work.”
Nwanisobi added that the various interventions, which he said had yielded positive impact on the economy, were a testament to CBN’s commitment to macroeconomic stability.

He listed the interventions to include the Micro, Small and Medium Enterprises Development Fund (MSMEDF), which had supported entrepreneurship development with over N39.26 billion; the Real Sector Support Facility (RSSF) through Differentiated Cash Reserve Ratio (DCRR), where disbursements to 426 projects across the country stood at N2.10 trillion as at September 2022; and the 100 for 100 Policy on Production and Productivity (PPP) with cumulative disbursement of N93.39 billion to 62 projects within the aforementioned period.

Nwanisobi listed others to include the Tertiary Institutions Entrepreneurship Scheme (TIES), which had total disbursement of N332.43 million; the Healthcare Sector Intervention Facility (HSIF), with cumulative disbursement of N130.54 billion for 131 projects, comprising 32 pharmaceuticals, 60 hospitals, and 39 other services.

He added that the central bank would continue to demonstrate an unwavering commitment to supporting a productive economy and prudent management of the country’s vast resources, saying that is the only panacea to reaching Nigeria’s desired economic destination.

Nwanisobi said, “The establishment of the Secured Transactions in Movable Assets Act (National Collateral Registry Act) and the Credit Reporting Act are part of the efforts of the Bank to institutionalise a business-friendly environment where businesses could thrive seamlessly, particularly the Micro, Small and Medium Enterprises (MSMEs), which is the engine of growth in any economy.”

However, the LCCI deputy president said, “We urge the CBN to implement the correct calibration of monetary policy considering the resilience of our economy and the implementation of the global monetary spillover to financial stability.

“As regards the issuance of new naira notes, the CBN should also consider converting the country’s lower currency notes into coins to facilitate highly repetitive retail transactions and avoid printing pieces of low-value notes with a short lifespan.
“We also appeal to the CBN to adopt more innovative ways to establish appropriate policies and take actions that will drive down the inflation rates and strengthen the value of our naira.”