SIR: Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele announced days ago that plans had been concluded and approval obtained from President Muhammadu Buhari to redesign the higher denomination Nigerian currencies of N200, N500 and N1000. The lower denominations of N10, N20, N50 and N100, he said, would remain intact. The new currency notes will start rolling out from December 15 and Nigerians have between that time and January 31, 2023 to change their current notes as they would cease to become legal tender from February, 2023.
Recall that former CBN governor, Charles Soludo (now governor of Anambra State) had come up with the drastic plan to re-denominate (revalue) the Naira. But no sooner did he unveil the plan to the public than it was shut down by the ruling government for lack of presidential approval. Soludo might have been working in the belief that the CBN is an independent institution charged principally with directing the country’s monetary policies in the nation’s best interest.
Although Emefiele’s current move involves essentially, a redesign of our currency notes, it has implications for the people and the economy. The first implication is that we shall be back to the era of carrying cash about, at least during the transition period as everyone has to physically take his/her cash to the banks to deposit. At the moment, some 80 per cent of monies in circulation are believed to be outside the banks.
Again, the CBN confirms that it recorded high rates of counterfeiting especially for N500 and N1000 denominations. Experts say advances in technology and printing devices have made counterfeiting of currencies relatively easier. It is believed that with the redesigning of our currency notes, it would take counterfeiters quite some time to be able to master it.
Dirty, worn, torn naira notes of all denominations are now also increasingly in circulation. They seem to be more common in the north. They are also becoming more difficult to spend as even some fuel stations reject them. So, this currency change provides an opportunity to have neater, better naira notes nationwide.
Given that Nigerians are generally accustomed to doing things at the 11th hour, it is likely that there would be some rush for currency exchanges towards end of the deadline that may overwhelm the banks. I foresee the CBN succumbing to pressure to extend the deadline.
In all, the timing of this currency change is wrong — coming at a time of high profile events, namely, Christmas, end of year/New Year celebrations, peak of the political campaigns for the 2023 general elections. Nigerians would want to enjoy aforementioned moments fully without any distractions, without worrying about possibility of losing their monies because they are unable to change them before expiration of time allotted for such. The consequences of this is that it may lead to panic among the populace, rejection of ‘old’ notes even before they cease to be legal tenders and placing of premium on the new currencies. That is, people may be compelled by these circumstances to exchange their old notes for the new ones within the time frame, at a discount through some private channels
•Victoria Ngozi Ikeano,
Lafia, Nasarawa State.