New naira: 10 takeout from Buhari National Address

The President, Major General Muhammadu Buhari (Retired), addressed the nation on Thursday morning in a television broadcast where he addressed the naira crisis plaguing the country.

In his address, the President apologized for the difficulties across the country in accessing the scarce new naira banknotes.

Here are 10 key takeaways from the president's speech

The new naira has come to stay

The president defended the Central Bank of Nigeria's naira reform policy. In his address, he said the policy has become necessary, noting that the proportion of currency outside banks has increased from 78% in 2015 to 85% in 2022. He said that in October 2022, currency in circulation had risen to 3.23 trillion naira; of which only N500 billion was in the banking system while N2.7 trillion remained permanently out of the system; thereby distorting fiscal policy and effective inflation management.

The old N200 note will be legal tender until April 10

The President, in an effort to cushion the effect of the new naira policy on citizens, has approved the continued use of the old N200 as legal tender for the next 60 days. This means that until April 10, Nigerians will be able to trade with the old N200 banknote. However, it will also cease to be legal tender after its 60-day grace period expires.

Old N500, N1000 banknotes are no longer legal tender

On the contrary, the President did not have much to say about the old N500 and N1000 banknotes, indicating that they are no longer legal tender in the country, as he said that the old N200 will circulate alongside new N200, N500 and N1,000 banknotes.

It however added: "In accordance with Section 20(3) of the CBN Act 2007, all existing old N1000 and N500 tickets remain redeemable at CBN and designated points."

Buhari apologizes for the difficulties

Speaking on the difficulties faced by Nigerians since the overhaul of the naira, the President said he was deeply sorry for the difficulties caused.

In his words, "I am deeply pained and sincerely sympathize with you for these unforeseen results. To stem this tide, I have directed the CBN to deploy all legitimate resources and legal needs to ensure that our citizens are properly educated on politics, have easy access to cash withdrawal through the availability of appropriate amounts of currency and currency availability. Why naira was redesigned

In a bid to enlighten Nigerians on why the naira was redesigned, Buhari said, “I feel compelled to present to you some critical points that underlie the policy decision. These include:

one. The need to restore the CBN's statutory ability to keep firm control over money in circulation.

b. The proportion of foreign currency outside banks has increased from 78% in 2015 to 85% in 2022, thus distorting financial policy and the effective management of inflation;

c. The huge volume of banknotes outside the banking system has proven to be virtually unavailable for economic activities and, by implication, retards the realization of potential economic growth;

d. Economic growth projections compel the government to aim to expand financial inclusion in the country by reducing the number of unbanked population; and

e. Given the prevailing security situation across the country, which continues to improve, it also becomes imperative for the government to deepen its continued support to security agencies to successfully combat banditry and ransom-taking. in Nigeria

What the new naira policy will accomplish

The President outlined the expected short, medium and long term goals that the policy is meant to achieve; a strengthening of our macroeconomic parameters; reduction in the broad money supply leading to a deceleration in the velocity of circulation of money in the economy, which should lead to a reduction in domestic price pressures; lower inflation due to the concomitant fall in money supply which will slow the rate of inflation; Collapse of illegal economic activities that would help stem corruption and the acquisition of money by illegal means; exchange rate stability; availability of easy loans and lower interest rates; and greater visibility and transparency of our financial actions resulting in effective enforcement of our anti-money laundering laws.

Naira policy saboteurs will face the law

Buhari said he had ordered the CBN to intensify collaboration with anti-corruption agencies, "to ensure that any institution or person who has hindered or sabotaged the implementation bears the full brunt of the law."

He added, "I have directed the CBN to deploy all legitimate resources and legal means to ensure that our citizens are properly educated about politics; appreciate...