Commercial banks will commence the circulation of the much awaited newly redesigned Naira notes from the Central Bank of Nigeria (CBN) to customers across the country today.
This is coming after the CBN Governor, Godwin Emefiele revealed that the new notes had been sent to banks, while insisting that the timelines – in terms of December 15 for commencement and the January 31 deadline were sacrosanct.
The apex bank had in October 2022, redesigned all major Naira notes and notified the public that it would start circulating them before the end of the year.
The affected denominations are, N200, N500, and N1000.
The last time the CBN redesigned the naira was in 2014 when it changed the design of the 100 Naira note to commemorate Nigeria’s centenary anniversary.
Although global best practice was for central banks to redesign, produce and circulate new local legal tender every 5–8 years, but the Naira has not been redesigned in the last 17 years.
“On the basis of these trends, problems and facts, and in line with Sections 19, Subsections a and b of the CBN Act 2007, the Management of the CBN sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N100, N200, N500, and N1,000 levels,” Emefiele had said.
He maintained that the new and existing currencies will remain legal tender and circulate together until January 31, 2023 when the existing notes shall cease to be legal tender.
Although there have been criticism in several quarters as analysts have been divided on their opinions regarding the announcement, the apex bank had stuck to its guns.
Only yesterday the Nigerian senate called on the apex bank to review its timelines for the policy, stressing it would through many operators at the grassroots economy into poverty.
For instance, Nigeria’s professor of capital markets, Prof Uche Uwaleke, told Daily Sun that the decision to replace some Naira denominations with new ones will be positive for the economy in the medium to long term.
“Although the measure does not amount to demonetisation of big currency notes often carried out by Central banks to curb black money and corruption, it will go a long way in ensuring that a lot of naira notes circulating outside the banks are crowded in. If it leads to large deposits in banks, it means the banks will have more money to lend which may reduce interest rates. “I also think it may have the effect of reducing speculative attacks on the naira in the parallel market”, Uwaleke said.
Also, Former Managing Director/Regional Executive Ecobank Nigeria, Patrick Akinwuntan, expressed confidence that this would improve financial security and transparency.
However, the Director General, Centre for Promotion of Private Enterprises (CPPE), Dr Muda Yusuf described the planned currency redesign as a rude shock as there are more important issues bugging the economy.
He noted that recently, Nigeria was downgraded by Moody’s from B2-B3 on account of a messy and weak financial system locally and internationally.