Group Calls For Suspension of Redesigning of Naira Notes

A group, Concerned Northern Forum, has called for the suspension of redesigning of the N200, N500 and N1000 notes, saying the measure would be detrimental to the nation’s economy.

The Central Bank of Nigeria, CBN, had announced that it was redesigning the currency notes from December 15.

Reacting via a statement on Thursday in Kaduna, the group’s spokesman, Abdulsalam Kazeem, said redesigning the Naira denominations will inflict more harm to its value.

He explained that this was because the current exchange rate of the Naira to the dollar or pounds, had made the naira to lose its value.

He called for serious economic policies that would strengthen the naira against dollar and pounds.

The group’s spokesman said Nigeria’s economy was down and the naira had depreciated to the minimal value, hence redesigning the notes would only cost the nation huge sums of money at the expense of tax payers.

“This is coming at a period when we are borrowing to fund significant parts of our annual budget and another significant part of the borrowing goes to debt servicing.

“Yet the only solution the apex bank could offer is to redesign our currency,” he said.

Mr Kazeem wondered if redesigning the notes would make Nigeria’s currency to gain value at the exchange rate market or add value to the standard of living of the citizenry.

“These are some questions begging for immediate answers, if no satisfactory answers are provided, the apex bank should immediately stop the process of the new design.

“Or else, it will be resisted by us in collaboration with other concerned civil society organisations from within and outside our region,” he said.

He alleged that the decision to redesign the naira was to empower individuals, consultants or contractors, who were desperate to make something before the end of the current administration.

“This idea should be rejected by all and sundry, it is not in the interest of the nation and it will add no value to the current multiple economic challenges the nation is facing.

“Failure to meet our demands to suspend redesigning of the notes will lead us to massive protest across the Northern region and the Federal Capital Territory.

“Those behind the idea should also be checked and questioned, while the CBN governor should be sacked,” Mr Kazeem said.

Meanwhile, some financial experts have commended the CBN for the decision, saying that it would have positive effect on the economy.

The experts spoke in separate interviews with the News Agency of Nigeria in Abuja on Thursday.

According to Prof. Umhe Uwaleke, a financial economist and professor of capital market at the Nasarawa State University, Keffi, the decision will be positive for the economy in the medium to long term.

Mr Uwaleke said the measure would go a long way to ensure that the naira in circulation outside the banking system were brought into the banking system.

He said the measure would also provide enough liquidity for banks, and more money for the banks to lend.

“The measure does not amount to demonetisation of big currency notes often carried out by central banks to curb black money and corruption.

“But 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.

“Perhaps more importantly, with increased currency in circulation now in the vault of banks, I expect to see improvement in monetary policy transmission,” he said.

Mr Uwaleke said it might also have the effect of reducing speculative attacks on the naira in the parallel market in the medium term.

“I expect that the Financial Intelligence Unit will be on the look out for huge deposits as a way of monitoring illegitimate transactions.

“Despite the huge cost involved in changing currency notes, I think it’s time to sanitise the system, especially now that electioneering activities have kicked off,” he said.

He, however, said the deadline of Jan. 31, 2023 was too short, considering the number of naira denominations involved, urging the CBN to consider extending it.

An economist, Dr Tope Fasua, also said the measure would have significant effect on the economy, adding that it was essentially about “black money.”

He suggested that the CBN should take such measures more frequently.

“When central banks do this, they try to pull in monies people are hiding; illegal money, corruption money, kidnapping money. Nigeria has managed to become a hub for these kinds of illegalities.

“I will even suggest that the CBN does this more often, maybe every 10 years. You will see a scenario where the banks are awash with liquidity.

“There are many people sitting on billions in naira, and even in dollars. The CBN should also see how it can pull in the dollars,” he said.

Mr Fasua advised that the idea of individuals operating personal domiciliary bank accounts should be banned, adding that nobody needed it.

“People are speculating against their own currency in their own country. That is not allowed in any economy.

“They should pull in illegal, black naira and then see how they can pull in illegal dollars. The CBN can control these things through the Deposit Money Banks,” he said.

However, Okechukwu Unegbu, a financial expert, and past President of the Chattered Institute of Bankers of Nigeria, CIBN, said redesigning the naira was not the most important problem facing the economy.

Mr Unegbu, said the apex bank should have simply ensured that the scarce lower naira denominations, like N100 and N200 were readily available by printing more.

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