14/06/2023
CURRENCY REDESIGN POLICY.
Currency redesign policy enables the Central Bank take control of currency in Circulation in order to combat counterfeiting, and manage inflation.
The now suspended Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, on October 26, 2022, notified the public of the planned redesign of three of the Naira denominations (200, 500 and 1,000 Naira notes) and its circulation effective December 15, 2022. The old version of the same denominations would cease to be recognized as legal tender from February 1, 2023.
REASONS GIVEN FOR THE REDESIGN
1. To mop up excess cash in circulation.
2. To combat counterfeiting.
3. To stop hoarding of the Naira notes.
4. To prevent vote buying
5. Manage inflation
6. Combat ransom payment.
COST OF THIS POLICY1.
1. Cash crunch in the economy.
2. Rise in cost of food
3. High inflation rate
4. High cost of transportation.
5. Eroded confidence in the banking system.
6. Higher interest rate
7. Incessant failed bank transaction and backlog of declined transaction reversal.
8. Excessive charges on transactions by POS Merchants.
Questions begging for answers are
1. Did the Naira redesign achieve its objectives?
2. Why recirculation of the old naira notes.
3. Why are the redesigned notes still less in Circulation.
4. Was this Naira redesign policy well thought out, planned and executed?
5. What will happen by December 31, 2023? The proposed deadline for Circulation of the old Naira notes.
6. How should phasing out the old notes by December 31, 2023 be planned out?