President Muhammadu Buhari, Thursday morning, briefed Nigerians on why his administration decided on the naira redesign policy, especially N200, N500 and N1000 notes.
Buhari said the need to fight corruption and insecurity headlong, including controlling inflationary trend partly necessitated the decision to redesign the currency denominations mentioned above.
The President, however, directed that the N200 naira old notes be allowed to circulate with the new ones in the interim.
He said, “I feel obliged to avail you of a few critical points underpinning the policy decision. These include:
“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 N1.4trillion.
“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;
“Economic growth projections make it imperative for the government to aim at expanding financial inclusion in the country by reducing the number of the unbanked population.
“Given the prevailing security situation across the country, which keeps improving, it also becomes compelling for the government to deepen its continuing support for security agencies to successfully combat banditry and ransom-taking in Nigeria.