CBN extends cash swap deadline to February 10;exercise targeted at hoarders of illicit funds not common man

President Muhammadu Buhari on Sunday in Daura, Katsina State, approved the extension of the ongoing currency swap by ten days, moving the deadline from January 31, 2023, to February 10, 2023.

Buhari gave the approval at a meeting with the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, urging more time, discretion and order to enable Nigerians successfully change their currencies to the redesigned notes, and reduce the risk of loss, especially among the underserved in rural areas.

“Based on the foregoing, we have sorted and obtained Mr President’s approval for the following: A ten-day extension of the deadline from January 31, 2023, to February 10, 2023; to allow for the collection of more old notes legitimately held by Nigerians and achieve more success in cash swap in our rural communities after which all old notes outside CBN losses their legal tender status,” the CBN Governor explained.

“First, I will like to thank Mr. President for giving the CBN the approval to embark on this ambitious programme because, like I said, in the past, the CBN has not had the opportunity to embark on such a currency redesign programme last 19 years and indeed, let me emphasize, that only an incorruptible leader of the President’s stature can give such approval to the CBN,” he said.

Briefing newsmen after the meeting, the CBN Governor said the currency swap had achieved more than 75 per cent success rate of the N2.7 trillion held outside the banking system, with an evident drop-in the rate of inflation, more stability of foreign exchange rates, and noticeable impact on security, especially in banditry and kidnapping figures.

Meanwhile, President Buhari has declared that the change of the 1,000, 500 and 200 denominations of the Naira was aimed at people hoarding illicit funds and not the common man.

He specifically stated that the currency swap which the nation’s apex bank, the Central Bank of Nigeria (CBN), introduced four months ago was targetted at individuals hoarding illicit funds and not ordinary citizens

The move, the President assured, will stabilize and strengthen the economy.

President Buhari, in a release issued on Saturday by his spokesperson, Mallam Garba Shehu, was reacting to reports of long queues of people waiting for hours for their turn to deposit old notes and get new ones, triggering public anger and opposition’s criticism.

According to him, the currency swap had also become necessary to prevent counterfeits, corruption, and terrorist funding.

The President assured that government will ensure that citizens are unharmed in their businesses and no disruption is caused to the entire supply chain arising from the currency swap due to end shortly.

While taking note that the poorest section of society is facing hardship as they often keep hard cash at home for various expenses, President Buhari gave strong assurances that the government will not leave them to their own fate.

He reiterated that a number of initiatives by the Central Bank and all commercial banks are underway to speed up the distribution of the new notes and do all that is necessary to forestall cash squeeze and chaos.

The CBN Governor who noted that redesigns were supposed to be every five to eight years assured that the CBN and banks will speed up the distribution of the new notes.

“Our aim is mainly to make Monetary Policy Decisions more efficacious and as you can see; we have started to see inflation trending downwards and exchange rates relatively stable.

“Secondly, we aim to support the efforts of our security agencies in combating banditry and ransom-taking in Nigeria through this programme and we see that the military are making good progress in this important task,” he added.

The head of the apex financial regulator said available data had shown that currency-in-circulation in 2015 was only N1.4 trillion, while as of October 2022, currency-in-circulation had risen to N3.23 trillion, out of which only N500 billion was within the banking industry.

He said N2.7 trillion was held permanently in people’s homes.

“Ordinarily, when CBN releases currency into circulation, it is meant to be used and after effluxion of time, it returns to the CBN thereby keeping the volume of currency in circulation under the firm control of the CBN.

“So far and since the commencement of this programme, we have collected about N1.9 trillion; leaving us with about N900 billion (N500 billion + N1.9 trillion),” the CBN Governor said.

According to Emefiele, to achieve effective distribution of the new currency, the CBN has taken some steps.

To ensure compliance, Emefiele said staff members, mostly Assistant Directors, Deputy Directors and Directors in Abuja were sent to all CBN branches nationwide to join the mass mobilization campaign and monitoring programmes.

He said breaches of the programme had been reported to the EFCC and ICPC for further action.

“Aside from those holding illicit/stolen Naira in their homes for speculative purposes, we do aim to give all Nigerians that have Naira legitimately earned and trapped, the opportunity to deposit their legitimately trapped monies at the CBN for exchange,” he stated.

Emefiele said a seven-day grace period had been given by the President, beginning from February 10 to February 17, 2023, in compliance with Sections 20 (3) and 22 of CBN Act allowing Nigerians to deposit their old notes at the CBN after the February deadline.

Fielding questions from newsmen, the CBN Governor said the excuse of security threats pushed by the Kano State Governor, Abdullahi Ganduje, had no bearing on the swap, which had achieved compliance and recorded huge success across the country.

He noted that all new currencies had security features that make it easy for tracking to bank branches, and the process had begun to deal with defaulters and those who breached the programme.