Business
Beyond the criticisms that have trailed the decision of the apex bank and the federal government to redesign the banknotes, many Nigerians have apparently displayed the huge trust deficit between them and the government, especially on poor governance issues and policies of government.
By Kennedy Nnamani
DESPITE the criticisms that have trailed the announcement that the new banknotes will soon be introduced, many Nigerians are anxiously waiting to receive, touch and transact with the new bills.
The Governor of the Central Bank of Nigeria, CBN, Godwin Emefiele, had on Wednesday, October 26, 2022, announced that the federal government has approved the redesign and issuance of new N200, N500 and N1000 notes. This decision did not go down well with many Nigerians, who are often skeptical of any new policies of government due mainly to the prevailing trust deficit between the government and the people.
The CBN governor, however, stated the motives behind the new policy of redesigning of the banknotes which include mopping up over 80 percent of the currency in circulation that are outside the vaults of commercial banks, curbing increasing counterfeiting and ransom payment to kidnappers and terrorists and tackling inflation.
Speaking recently on the plans to redesign the banknotes, President Muhammadu Buhari, commended the initiative of the CBN, noting that ‘‘the new Naira banknotes have been fortified with security features that make them difficult to counterfeit.’’
He also stated that the new notes would help the CBN in designing and implementing better monetary policies.
‘‘While this may not be apparent to many Nigerians, only 4 out of the 54 African countries print their currencies in their countries and Nigeria is one. Hence, a majority of African countries print their currencies abroad and import them the way we import other goods.
‘‘That is why it is with immense pride that I announce to you that these redesigned currencies are locally produced right here in Nigeria by our Security Printing and Minting PLC,’’ he said.
However, mixed reactions have since trailed the redesigning of the banknotes.
For instance, Prof. Ken Ife, Macro-Economic policy analyst, stated during a programme, “Sunrise Daily” on Channels Television, that it was a great move actually by the CBN. “If the truth be told, the redesign was long overdue,” he said. He also buttressed the need for the redesigning by saying that “what is unknown is the size of the counterfeit in the economy”.
“If you look at the frontiers of Nigeria in the North with all the Francophone countries in the northern frontiers, about 100 million of them are actively trading with Nigeria in the Northern frontier and they don’t use dollars, they don’t use FCFA, they are using Nigerian Naira. So you don’t actually know how much of our Naira is out there.
“So when you are tackling inflation, you really don’t know how much money is there fueling inflation,” he said.
Speaking on the features on the new notes, Prof. Ife noted that looking at the new notes on paper, there are more colours.
He added, however, that what cannot be visible are the very important electronic features said to have been encrypted in the notes that gave the CBN governor the confidence to say “you cannot counterfeit this currency”.
In the same vein, Ikenna Nwosu, CEO, MPregate Ltd, Investment Advisory, supported the idea of redesigning the banknotes in order to tackle inflation, noting that Naira is the currency of West Africa.
While speaking on Sunrise daily on Channels television, Nwosu said: “Nigerian currency, frankly, is the currency of West Africa. “Forget that there are more countries using the CFA, but as the largest trading economy in West Africa, the management of the Naira is very critical in the West African economic stability.”
According to him, the main driver for this is the increasing necessity for improving the security features. This happens in other countries as well; developed and developing.
“That is usually the main driver because the increasing sophistication of technology results in ease of counterfeiting,” Nwosu said.
He believed that the move would positively impact inflation, but the extent of the impact will still need to be monitored.
Nwosu, however, decried the possible cost of printing the new notes and the cost to the banking sector based on the free deposit transactions and 6-day work ordered by the CBN.
According to him, the banks will incur more costs and will not gain any benefits from the process.
In his contribution, Kelvin Emmanuel, CEO, Dairyhills Ltd, who spoke on Business Morning Show on Channels Television, applauded the CBN for the project and some of the reasons behind it. However, he challenged the timing.
“If he (CBN Governor) is saying that he wants to fight terrorist financing, and he wants to fight excessive use of cash during campaigns in violation of sections 87, 89, 1991 and 93 of the electoral act of 2022, that is plausible, but the timing of the decision, especially considering that the issues we have on the ground are bigger issues that take precedence over the redesigning notes, is very suspects,” he said.
However, some Nigerians have equally expressed their sentiments on the policy, describing it as “recolouring” instead of “redesigning”.
Nankling Danladi, a student of the University of Jos, told Realnews Magazine, that the CBN did not meet her expectations about the new notes. According to her, based on the samples of the new notes being circulated on the social media, she was expecting a redesign and not a recolour.
“I was expecting a redesign, maybe in the size, the images or something more, something new, but what I saw was a recolour,” she said.
Describing her feeling about welcoming and using new notes, Danladi stated that she was indifferent. “I am indifferent about anticipating the new notes, no special feeling,” she said.
She, however, applauded the move by the CBN noting that although it may not solve the problem of kidnapping, it will go a long way in reducing it and fighting counterfeit of the banknotes as well as regulating the money in circulation.
To Nelson Philip, a banker, the idea is a good one and “I can’t wait to see the new notes”. But the features did not meet his expectations.
“I welcomed the idea, but I wish they changed the design, the size and other features,” he said.
Speaking on the idea of fighting counterfeiting of the currency, he stated that based on the samples that have been seen on social media, the notes look like what can be counterfeited easily.
According to him, there are no perfect counterfeits, but rather, what can look like the original and can pass some certain places unnoticed.
And for Omoyele Sowore, the presidential candidate of African Action Congress, AAC, the banknotes were only recolored and he was not surprised.
“The Naira was never redesigned, going by what they presented today,” he said. “They recolored the Naira, they changed the colours of the different denominations.
“From the point of view of redesign, there will be something spectacularly different from how the naira looks; differently from what it used to be.
“I already said the redesign process was a scam ab initio, that’s from the beginning and I’m not surprised this is how it ended,” he said.
Sowore added that what the CBN needed to have done was to revalue the Naira.
“If there is any monetary policy the Naira needed was to revalue the Naira and not to redesign it.
“I have read all the economics books in the world and never in any book or any policy have I found changing the outlook or the face of any currency that brings the currency to any value.
And for Amaka Ani, a trader, there is not much difference between the old and the new bills. To her redesigning of the currency is not really the problem, but the value of the currency.
According to her, the price of things is on the increase, but if the redesign can guarantee a positive value to the Naira, then it is a good move.
“I don’t really know much about the redesign, but what I saw on the internet was just the old Naira notes that were recoloured.
“But if the new notes can reduce the cost of goods, then I am okay with it and I can’t wait to spend it,” she added.
Dahiru Usman, who also spoke to Realnews, said that he was patiently waiting to hold the new notes to see if there are other additional features that were not noticed in the samples in circulation on the social media.
While the debate on the merits and demerits of the redesigning of the banknotes continues, it is pertinent to note that the new banknotes are already in the vaults of the commercial banks and that the take-off dates of the distribution of the redesigned banknotes and when old banknotes cease to be legal tenders remain sacrosanct according to the CBN.
KN
Tags: CBN Godwin Emefiele Kennedy Nnamani Muhammadu Buhari
