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HOME / THE REALITIES
New Naira Design And Miscellaneous Matters
Published Nov 05, 2022 IN THE REALITIES,
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BY AUGUSTINE OMILO

 

 OCTOBER, the 10th month of the year 2022 will go down in Nigeria’s political history as a period of monetary debates. It will be remembered for being marked as the beginning of the Federal government’s desperate move towards sanitizing the economic mess the nation has witnessed in the last seven years of Buhari’s democratic governance. The debate commenced immediately after Mr. Godwin Emefiele, the governor of the country’s central Bank (CBN) announced the intention of government to redesign the top three banknotes in use in Nigeria – N200, N500 and N1000.

According to Emefiele, the monetary policy is aimed at mopping up the excess cash in circulation, block the use of counterfeit banknotes, and discourage the payment of ransom to kidnappers who normally insist on cash transactions between them and victims’ relations or government officials. He also points to the fact that the move will drastically reduce the high rate of inflation plaguing the nation’s citizens. The president, General Muhammadu Buhari (rtd.) who spoke through his media aide, Garba Shehu has already given his consent to the Central bank of Nigeria’s Chief Executive Officer’s proposal.

There are three major lines of thought concerning the intention to redesign Nigeria’s legal tender, the naira. The first is that of the group that is in support of Emefiele in his argument in favour of a new cosmetic appearance of the country’s top three currency notes. The second group is made up of those with the belief that the manipulation of the currency circulation is hasty. In their view, the timing is wrong. These people’s reasoning pattern is based on the fact that there are many issues yet unresolved by the federal government. And they deserve more urgent attention. Examples of such are the 2023 elections, insecurity and the ravaging flood across the length and breadth of the country.

The third class of people with different opinion on the issue comprise of Nigerians who believe that good as the policy appears, it stands to make no positive impact on the economy. This, in their estimation is because previous efforts along the same line, especially that of 1984 only succeeded in inflicting pains on the people. Other reasons for this negative disposition towards the redesigning of the currency include the heavy cost implications, government’s lack of will power to check the likely corruption cases inherent in the execution of the task and the continued threat posed by the use of the American dollar ($) as a competing medium of exchange in the country.

Amidst all these postulations, men with discerning minds can simply deduce the fact that there is lack of trust on the part of Nigerians towards government officials’ ability to deliver positive dividends of democracy to the people. This attitude cannot but be justified by the notion that past efforts by government on similar good policies often ended only with people saddled with implementation responsibilities enriching themselves thereby.

In order to achieve the intended objectives for which the Central Bank of Nigeria (CBN) is foisting the currency redesign on Nigerians therefore, drastic measures must be taken to ensure that the US dollar ceases forthwith to function illegally as legal tender in the country. Nigeria being a sovereign nation with its own currency, the naira backed up by law as a legal tender, it becomes criminal for people to continue to spend other countries’ currencies alongside the naira without restrictions even as such foreign media of exchange have gradually become standards for the store of values and deferred payments.

The implication of government’s failure to stop the use of the dollar alongside the naira is that the so-called cash in circulation, instead of being mopped up will be changed to the American currency for hoarding. And this in turn will bring about dollar scarcity and further weakening of the naira. This again will aggravate the sufferings of the people as a result of the escalating hyperinflation in the country.

The central Bank of Nigeria must beef up its fraud checks to ensure that old currencies returned for destruction are not “shared” among its staff for “sale” at “auction prizes” to economic saboteurs for recirculation several times before the eventual termination date for the use of the discarded currencies.

Perhaps to convince the doubting “thomases” in the country, the government may need to avail the populace of the statistics of what previous currency changes, redesign and addition of higher denominations since 1973 to date have accomplished for the country economically.

Meanwhile, as the debate continues, it may be necessary to heed the counsel of those who hold the view that it is better to discard the use of naira denominations above one hundred naira note. If the current two hundred, five hundred and one thousand naira notes are phased out, using cash for payments requiring huge sums of money will become a near-impossible, if not completely impossible task.

By the way, was redesigning the naira and the cost of doing so captured in the 2022 budget? If the answer is emphatic “yes”, the policy can proceed with caution, taking into account the various shades opinion offered so far by patriotic Nigerians. Otherwise, the project should be suspended, given the fact that it requires heavy funds for execution and follow-up which may become big burdens for the successor to Buhari in a few months’ time.

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