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Cash Scarcity in Nigeria: President Buhari shifts ground against apex court’s position

Published

2 years ago

February 16, 2023

The last has not been heard in the situation surrounding cash scarcity in Nigeria as the country’s President Muhammadu Buhari in a nationwide broadcast on Thursday morning directed the Central Bank of Nigeria (CBN) to release old N200 notes into circulation to co-exist with new N200, N500 and N1,000 banknotes for 60 days.

The President maintained that old N500 and N1,000 banknotes are no longer legal tender in Nigeria and directed the CBN to allow the new notes available to all citizens.

“To further ease the supply pressure, particularly on our citizens, I have given approval to the CBN that the old N200 bank notes be released back into circulation and it should also be allowed to circulate as legal tender with the new N200, N500 and N1,000 bank notes for 60 days from February 10, 2023 to April 10, 2023 when the old N200 note ceases to be legal tender,” he said.

The President lamented that the currency in circulation grew from N1.4 trillion in 2015 when he assumed office to N3.23 trillion at the end of 2022. He, however, said N2.1 trillion of the cash in circulation have been retrieved since the launch of the naira redesign policy of the Federal Government on October 26, 2022.

Nigeria’s Central Bank, recently introduced new designs of the N200, N500, and N1,000 notes in an attempt to bring currency from outside the banking system into the banking system, thereby making monetary policy more effective in combating inflation.

President Buhari in his address said “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.”

Meanwhile, there is a pending case filed by some states of the Nigerian federation, seeking to stop the Federal Government and the apex bank to allow the continual use of the old currencies concurrently with the new one.

It has been said in some quarters that the redesigning of the country’s currency and the limited supply of the new note is a deliberate plot by the outgoing president Buhari, who has vowed to deliver a free and fair election to frustrate “vote buying” which has been characteristic of recent elections in Nigeria.

Related Topics:Cash scarcity Featured Nigeria

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IMF mission concludes 4th loan program assessment in Egypt

Published

1 day ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

3 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.