In a recent national broadcast, Nigerian President Muhammadu Buhari announced that the country has successfully retrieved N2.1 trillion from banknotes previously held outside the banking sector.
This retrieval comes as part of the naira redesign policy that was introduced by the Central Bank of Nigeria.
The President stated that since the program’s commencement, the amount retrieved represents about 80% of such funds. The Naira Redesign Policy, which was launched on October 26, 2022, aims to retrieve banknotes previously held outside the banking system in a bid to strengthen the country’s financial system and reduce corruption.
The President also 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, and that the proportion of currency outside banks grew from 78% in 2015 to 85% in 2022.
News About Nigeria understands as of October 2022, 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.
The successful retrieval of N2.1 trillion is expected to have several positive effects on the economy, including lowering inflation as a result of the accompanying decline in the money supply that will slow the pace of inflation, the collapse of illegal economic activities, which would help to stem corruption and acquisition of money through illegal ways, exchange rate stability, availability of easy loans, and lowering of interest rates.
The President’s announcement comes as a relief to many Nigerians who have been dealing with high inflation and economic instability. The successful retrieval of such a large sum of money is a positive step towards a stronger and more stable financial system.