President Bola Tinubu Advocates for the Use of Old and New Naira Notes as Emefiele Prepares to Depart.

President Bola Tinubu Advocates for the Use of Old and New Naira Notes as Emefiele Prepares to Depart.

Tinubu to do house cleaning in CBN Photo credit: Bloomberg Source: Getty Images

President Bola Tinubu, in a persuasive move, takes a stand on the utilization of both old and new naira notes amidst the imminent departure of Godwin Emefiele, the Governor of the Central Bank of Nigeria (CBN), who has served diligently for nine years.

In an unprecedented announcement, President Bola Ahmed Tinubu assures the nation that both the old and new naira notes will retain their status as legal tender. This declaration follows the CBN's earlier announcement on October 26, 2022, revealing the redesign and introduction of higher denominations (N200, N500, and N1,000) into the economy from December 15, 2022.

Addressing the nation on Monday, May 29, 2023, in his inaugural speech as president, Tinubu affirms his administration's commitment to reevaluating the naira redesign policy. Furthermore, he directs the CBN and other financial institutions to recognize both the old and new banknotes as legal tender, ensuring a smooth transition.

President Tinubu emphasizes, "The CBN's currency swap was implemented with undue severity, disproportionately impacting the unbanked population of Nigeria. This policy will be thoroughly reviewed. In the meantime, my administration will accept both currencies as legal tender." Additionally, he urges the CBN to embark on a comprehensive assessment aimed at achieving a unified exchange rate.

Renowned expert, Muda Yusuf, the CEO of the Centre for the Promotion of Private Enterprise, applauds the president's decision to establish a unified exchange rate regime. He clarifies, "It is important to note that this is not a devaluation proposition. Rather, it represents a pricing mechanism that accurately reflects the demand and supply dynamics within the foreign exchange market, allowing for timely rate adjustments as necessary."

In a related development, the Central Bank of Nigeria (CBN) has recently revoked the licenses of 179 microfinance banks, four primary mortgage banks, and three finance companies across the country. The announcement was published in the official gazette of the Federal Government on Tuesday, May 23, 2023, as reported on the CBN's website. These institutions faced license revocation due to various reasons, as specified in the gazette.

President Bola Tinubu's affirmative stance on the use of both old and new naira notes, coupled with his commitment to reviewing relevant policies, marks a decisive step towards ensuring a stable and inclusive financial system. This strategic approach, along with the revocation of licenses for non-compliant financial institutions, demonstrates the government's dedication to fostering a robust and accountable economic environment.