When the Central Bank of Nigeria (CBN) effects the change to the naira by January 31 next year, it will be the 16th time the national currency has been redesigned or changed since 1959.
The proposed change will cover both the notes and the coins.
It is claimed that global best practice permits central banks to redesign, produce and circulate new local legal tender every five to eight years.
The last time the naira had a makeover was 20 years ago.
However, none of the changes has attracted as much interest and debate as the awaited 2023 redesign of the naira.
On 26th October, the CBN Governor, Godwin Emefiele, announced that some denominations of the naira will wear new looks.
These are the N200, N500 and N1,000 notes. Emefiele said the apex bank was worried over the management of current series of banknotes and currency in circulation, particularly those outside the banking system in Nigeria.
A major source of concern to the CBN is the escalation in scale and sophistication unscrupulous people have abused the naira, from hoarding to counterfeiting the notes.
Emefiele said members of the public were hoarding banknotes “with statistics showing that over 85 per cent of currency in circulation are outside the vaults of our commercial banks.
To be more specific, as at the end of September 2022, available data at the CBN indicated that N2.73 trillion out of the N3.23 trillion currency in circulation was outside the vault of commercial banks across the country and supposedly held by members of the public.”
According to THE NATION What many Nigerians do not know is that the shabby looks of the various naira notes have resulted in the negative perception of the CBN, which in turn has increased risks to financial stability.
The credibility of the naira and the ability of the CBN to effectively manage the currency were further put at risk by “increasing ease and risk of counterfeiting evidenced by several security reports.” According to Emefiele, “recent development in photographic technology and advancements in printing devices have made counterfeiting relatively easier. In recent years, the CBN has recorded significantly higher rates of counterfeiting, especially at the higher denominations of N500 and N1,000 banknotes.”
Aside from the attacks on the naira, the CBN said it was compelled to redesign the naira because of the prevailing level of security situation in the country, especially cases of terrorism and kidnapping with perpetrators holding on to what Emefiele described as “large volume of money outside the banking system used as source of funds for ransom.”
By giving the naira a makeover within the timeframe stipulated by the CBN and given the existing laws around depositing of cash in banks, unscrupulous individuals keeping naira notes will be forced to deposit these notes in the banks or forfeit their ill-gotten wealth.
THE NATION
