Buhari Enacts Currency Notes Exchange as Swan Song
By Bashir Olanrewaju
Nigerian President Muhammadu Buhari, in the twilight of his eight-year rule as an elected leader is unleashing his signature measure as military ruler in the 1980s: a currency notes swap.
Central Bank of Nigeria Governor Godwin Emefiele announced on Wednesday that notes in the denominations of 100, 200, 500 and 1,000 will have a new design that will be the only accepted legal tender by the end of January 2023.
The measure is intended to mop up excess liquidity, curb growing counterfeiting and ensure the stability of the financial system, Emefiele said while briefing journalists on Wednesday. More than 80 percent of the currency now in circulation are outside the banks, suggesting large-scale hoarding of notes for nefarious activities, according to the central bank.
“In recent years, the CBN has recorded significantly higher rates of counterfeiting especially at the higher denominations,” Emefiele said. “Although global best practice is for central banks to redesign, produce and circulate new local legal tender every five to eight years, the naira has not been redesigned in the last 20 years.”
After Buhari toppled an elected government on Christmas Eve in 1983, one of the measures he embarked on within months was a currency notes swap. Though it was touted as a measure against inflation a d excess liquidity, it caused so much disruptions to economic activities that it created more problems than it solved. It became one of the reasons cited by another set of army officers for toppling him 20 months into his rule.
Buhari’s eight-year rule as an elected president was marked by two recessions in four years, a precipitous drop in government revenue and a quadrupling of public debt, with the result that Africa’s biggest economy is now spending more than its revenue to service its debt.,