Godwin Emefiele, the Central Bank of Nigeria Governor, recently announced that there will be the redesigning of 200, 500, and 1000 naira notes, to wild criticism and approval. Nigerians are surprised as well as divided on supporting or condemning the move by Nigeria’s top bank.
The Details of this Redesigning of 200, 500, and 1000 Naira Notes Policy
According to Emefiele, these newly redesigned currency notes will be introduced to Nigeria’s economy on 15 December, 2022. By January 31st, the old currency notes would no longer be in use. Thus, all Nigerians with the state currencies should go to the commercial banks to deposit them, notwithstanding the amount, for fast transfer to the CBN.
The CBN will begin to withdraw all the old currencies until it is completely erased from the economy. However, is it possible to do this before 31st of January?
Nigerians are beginning to write in support of against the policy. For those in support, they argue that the policy is good to combat politicians’ vote buying attempt, to reduce inflation, and fight against stockpiling of the naira. The CBN itself declared that it has access to only 30% of the naira in circulation, meaning a majority of it is out of the reach of the commercial banks and CBN.
For those who are against the policy, they write that it is uneccesary. It won’t stop inflation, it is additional cost to governance, and it is part of the large waste put up to fight inflation and exchange rate problem that has never worked out.
The CBN didn’t give any reason why it is enacting the policy. However, Emefiele stated that it is also part of the duty of the apex bank to redesign the naira every 5 to 8 years. So, the CBN is only fulfilling its duty.
The Implications of this Policy for Nigerians
1. The banks are about to get crowded and overworked as people who stored money elsewhere would find their way to the commercial banks to open accounts and deposit money.
2. There will be panic towards the deadline, and the money in circulation will reduce by 70%.
3. There will still be cases of vote buying in next year’s election as this policy cannot eradicate it really. Politicians have a way of finding their ways around some policies.
4. There might be a slight decrease or increase in exchange rate.
5. The number of worn out money in circulation will reduce drastically.
6. However, the January 31st deadline is unworkable. It might be shifted but it is advised you go to bank to change your naira notes.
This redesigning of 200, 500, and 1000 Naira note is actually not a bad policy. It will certainly have a good impact in one way or another. It can also be disastrous if it is not well managed.