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In Broadcast, Buhari Defends New Naira Policy, Begs Nigerians for Understanding
…Says policy will stem corruption, money laundering, terrorism financing, undue monetization of elections
By Damola Emmanuel
President Muhammadu Buhari, Thursday, cleared the fog of speculations that have trailed the administration’s new monetary policy especially as it concerns the ongoing naira swap, deadline for the expiration of the old currency notes and the far-reaching implications of the new policy on the fiscal health of the country.
Signs, he said, had emerged about the enormous potential of the policy to stem corruption and acquisition of money through illegal ways; amputate money laundering and terrorism financing; as well as eliminate banditry and related crimes. Importantly, the President affirmed, the policy was already proving a potent weapon to reduce the undue monetization of the country’s electoral process.
Buhari highlighted the critical points underpinning the policy in a nationwide broadcast, Thursday morning.
While sympathizing with Nigerians on the excruciating pains they have been going through as a result of the implementation of the policy, as well as the unintended consequences it has engendered, President Buhari expressed satisfaction that the policy was achieving its set objectives.
On the factors that induced the policy, Buhari said there was need to “restore the statutory ability of the CBN to keep a firm control over money in circulation.”
For instance, the President said when he took power in 2015, the Currency-in-Circulation was only N1.4trillion while 78% was outside the banking system. By 2022, money outside the banking system had leapt to 85%.
“As of October 2022, therefore,” he continued, “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 implication of this, according to the President, was that the unbanked monies were practically unavailable for economic activities, thereby retarding potential economic growth.
For economic growth projections, therefore, Buhari said it became 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, he opined “keeps improving”, Buhari said it also became expedient for government to “deepen its continuing support for security agencies to successfully combat banditry and ransom-taking in Nigeria.”
The President added all these, and enthused that “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.”
That, according to him, represents about 80% of such unbanked funds.
He highlighted the short, medium and long-term gains of the new policy as including:
- 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; and
- Greater visibility and transparency of our financial actions translating to efficient enforcement of our anti-money laundering legislations.
Buhari, again, assured Nigerians that he felt their pains and called for their understanding even he assured that mechanism has been put in place to continuously assess the policy and its implementation with a view to ensuring that Nigerians do not suffer unnecessarily.
Consequently, to assuage the present suffering of the people occasioned by the policy, Buhari directed the Central Bank of Nigeria, CBN, to release the old N200 bank notes into circulation and “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.”
The president was also satisfied that the new money policy has started achieving one of its manifest objectives-discouraging the excessive use of money by political actors in influencing the 2023 general elections.
The President noted that he was aware of the “obstacles placed on the path of innocent Nigerians by unscrupulous officials in the banking industry, entrusted with the process of implementation of the new monetary policy.”
To stem the tide, he informed that he had 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.”
Closing, the President noted that the policy was already achieving the goal of engendering credible electoral process, de-monetizing the electoral process, thus bequeathing a legacy of free, fair and credible elections to Nigerians and his beloved Fatherland.
