CBN REDESIGN OF NAIRA- WHAT YOU NEED TO KNOW

Last week the central bank of Nigeria announce that it will circulating a new N200, N500, and N1000 notes from December 15 2022. According to a statement by the CBN Governor Godwin Emefiele " currency management is a key function of the central bank of Nigeria as enshrined in section 2(b) of the the CBN Act 2007. Indeed the integrity of local legal tender, the efficiency of it's supply as well as its efficacy in the conduct of monetary policy are some of the Hallmark of great central bank.

THE CBN VIEW

The monetary agency has claimed that the redesign of naira will control inflation, discourage naira hoarding and make it difficult for terrorist and kidnappers to collect/spend ransom. It is also allege in some quarters that the CBN is putting the policy in place in order to curb vote buying by politicians during the 2023 election.

CONCERN OF NIGERIANS

Since the announcement of the policy by CBN, Nigerians have critise the policy, saying it was unnecessary. The argument against the policy is that the CBN should have consider the present economic situation of the country before deciding to embark on the policy and also that the timing of the policy was wrong because of the concern with the 2023 election.

The cost associated with the policy is another issue to be considered. In the USA the average cost of printing new currency is between 7.5 cent to 17 cent depending on the Denomination. According to the report by vanguard newspaper the apex bank spent the sum of N58. 6 billion to print 2.52 billion naira note valued at N1. 1 trillion in 2020. It cost the CBN an average of N23. 44 to print each Note, many have argued that with the rising inflation and economic downturn that federal government can't afford to spend that much in printing new notes

The redesign of the naira will lead to increase in exchange rates, many believe that individuals who have illegal funds in their houses will wish to convert naira to dollar or other foreign currency which will lead to rise in exchange rates.

WHAT YOU SHOULD KNOW

customers of local banks are expected to begin depositing their naira notes to their account, the existing currency will enable customers withdraw new notes.

All old notes after January 2023 will become counterfeit and useless, you should stop keeping money in your house and also be vigilant about receiving old money at odd hours.

It's important to note that the CBN is exercising its constitutional rights in carrying out this policy and government should set policies that will impact positively on the life of its citizens..

We trust that the CBN have made their research and understand the gains and implication of the policy...