5 worrisome reasons why the CBN wants to redesign the naira notes

The central bank of Nigeria, CBN, last week, shocked the nation with plans to redesign the country’s currency higher denominations amidst a failing economy.

The Central Bank of Nigeria on Wednesday, announced plans to redesign the N1000, N500, N200, and the N100 notes. The apex bank said that among other things, the move would help to reclaim control over the amount of currency in circulation, control inflation, and tackle money hoarding, as well as the rampant cases of money laundering.

The CBN further stated that the bank will begin to issue the new naira notes as from 15^th of December, 2022, and noted that as from the 31st of January, 2023 the old currency will cease to be a legal tender.

While addressing newsmen on Wednesday, the Apex Bank boss, Godwin Emefiele, noted that the bank took the decision to protect the integrity of the country and the Naira.

The governor noted that the Central Bank has faced enormous challenges such as “significant hoarding of banknotes,” and added that over 85% of banknotes in circulation are outside the vaults of the commercial banks; a situation which he described as unhealthy for the economy and could lead to untold inflation.

Ransom Money

Furthermore, the governor added that the move would further curtail the prevailing security problems in the country, noting that kidnappers will find it hard to spend or claim ransom money since the notes they have is now rendered invalid.

“Also, in view of the prevailing level of security situation in the country, the CBN is convinced that the incidents of terrorism and kidnapping would be minimized as access to the large volume of money outside the banking system used as source of funds for ransom payment will begin to dry up,” he said.

Finance Minister kicks

Meanwhile, the country’s Minister of Finance, Budget and National Planning, Zainab Ahmed debunked the move by the CBN to redesign the banknotes as untimely.

Also, she noted that the apex bank did not carry the ministry of finance along in her decision to redesign the naira notes.

The minster insisted that the move will further devalue the already weakened Naira. In her words, “To me, the policy may be a well conceived one, but the timing going by the realities on ground, is very wrong as the Naira may fall to as low as N1000 to the dollar before January 31, 2023 fixed for full implementation for the policy.”

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EFCC Appraises Move

As most Nigerians kick against the move, the Economic and Financial Crimes Commission, EFCC, appraised the CBN move to redesign the Naira notes.

The chairman of EFCC, Abdulrasheed Bawa, said that “the EFCC, the CBN and some other regulators in the financial sector have worked closely in the recent past to determine how best to stabilize the country’s money policy environment.

“It is heartwarming that the CBN has demonstrated courage taking this bold decision which I believe will bring sanity to the currency management situation in the Nigeria.”

However, several hours after the announcement, Nigeria Today gathered that the Naira has taken a free fall against the dollar. On Friday, the Naira fell to an all time low of N780.000 per $1 and had continued to fall.

Nairametrics reported that the depreciation of the Naira at the black market was attributed to a spike in demand prompted by the CBN’s redesign of the currency.

Meanwhile, issues surrounding the move have been a topic of debate around the country.

While some Nigerians say that the move will further devalue the Naira, others insists that kidnappers and bandits will begin to demand dollars instead of Naira notes which will defeat the purpose of the CBN plan. Others, however, questioned the financial cost of such plan especially at a time when the country is said to be borrowing money to pay bills.

Editor’s Opinion on CBN and Emefiele

The move by the Central Bank of Nigeria is not new. During the tenures of Lamido Sanusi and Chukwuma Soludo, the Naira notes went through several structural and material redesigns.

But unlike Lamido and Soludo, the present governor of the central bank is an unconscionable man who neither makes a show of having a concrete plant nor pretends to be good at his job.

Chukwuma Soludo redesigned the Naira in the mid-2000 for two reasons. The Naira was a paper money which easily tore during use so much so that a significant portion of the currency in circulation at the time always came back to the commercial banks torn and badly worn out.

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Secondly, changing the Naira notes from paper to polymer enhanced the durability, physical value and commercial value of the currency. In fact, the physical boost eventually boosted the fiscal value of the Naira. It was a welcome strategy and everyone praised the governor for that.

But the present CBN governor is a clueless man who despite being at the helm of the affairs of a failing economy, dabbled into politics this year and wasted a whooping 100 million Naira to purchase a presidential ticket to captain a ship he had helped to sink.

Till date, no one has really asked the hard question, how did the central bank governor afford to pay a whooping 100 million naira cash for a presidential ticket?

What is the motivation behind the central bank governor dabbling into politics while at the same time overseeing the country’s vault? It is plain wrong and unconscionable.

Furthermore, 2022 has been a hugely chaotic year for Nigeria, and this is due to the coming general election of 2023. Nigeria is a volatile political scene where every politician takes pride in flexing their political muscles during campaigns. And due to this, the central bank governor assumes it is best to limit the currency in circulation, but there are two questions to ask.

Is this the best thing to do and

Is this the right time to undertake this level of substantial change?

According to the Finance Minister, Zainab Ahmed, the move could be right, but the timing is definitely wrong and calls for further examination. Why has the central bank governor waited up till now to make this move?

Emefiele was not sleeping when PDP and APC flooded the country with campaign money, neither was the central bank asleep when APC and PDP shared hundreds of millions to party delegates in public.

Where did they think that money was going to? That money was pulled from the commercial banks and paid to the delegates in cash. There are evidences to prove this as the party delegates did not try to hide the abomination from the public.

What economic policies did Emefiele put in place to ensure that there is balance in the amount of currency in circulation and the money in the commercial banks vault? Isn’t that the first thing to do while combating inflation?

What if Emefiele had won the presidential ticket and become his party’s flag bearer? Would he have taken this ill hashed bold step?

What measures and strategies did the governor initiate to stop the politicians from acquiring and hoarding currencies for the past eight years?

Nigeria is a country where issues of national interests are pampered and swept under the carpet until it has come to bite everyone including the rich.

We are in a country where the rich and the politicians bury billions of Naira in septic tanks. We are in a country where public office holders use bullion vans to move money in broad day light and the central bank gives the middle finger. Hoarding money did not start today.

Furthermore, what is the country doing to stop currency hoarding? Are we going to redesign the Naira notes each time politicians decide to hoard the Naira? Why don’t we arrest the criminals hoarding the Naira instead and punish them to deter others from doing same?

An example comes to mind. Senator Chimaroke Nnamani was arrested years ago, during Obasanjo’s tenure; I think it was Nuhu Ribadu who arrested him as the chairman of EFCC at the time. He was arrested for burying billions of Naira underground in a septic tank in his house in Enugu.

Guess where the governor is today? He is a Senator and a big man in APC government; his sins have been pardoned, forgotten, and blotted out.

What a country! Instead of punishing thieves and bringing the weight of the law on them, we treat criminals with glove hands, pad them with national budget, and instead suffer the country to indignity to protect those who milk the country dry and drag it in the mud.

 So I ask again, are going to redesign the national currency in the next election when politicians decide to hoard banknotes again?

Since we are scared of punishing the politicians and treat them as sacred cows, we might as well as the right questions, who is this affecting and who is benefiting from this?

The central bank governor cannot just wake from his inertia because of national interest. That is not his leadership style.

CBN Prints More Money

Again, a couple of weeks ago, there were rumours that the central bank, under the order of someone I do not intend to mention, had printed more money than they should. Someone had ordered the central bank to print billions of Naira notes for some projects.

The central bank had printed more money than was in circulation and had no qualms flooding the already weak market with excited and volatile mints. Only for the same central bank to turn around a few weeks later to announce plans to redesign the Naira notes. The same Naira notes which had cost the country billions of Naira to print?

What is the reason behind this?

What happened?

Someone ought to ask, what is going on?

There is no smoke without fire. It is either someone made an incalculable mistake or the same person who ordered the central bank to print more Naira notes also coughed and the central bank is catching cold.

$1 To Hit N1000 and CBN Does Not Care

I know that a lot of pundits have praised the move by the central bank to redesign the Naira notes, and have even predicted that it could end well in the distant future. But at the moment, the country would have to bear the Naira to hit an all time low of N1000 to a dollar.

It is so pathetic. No one knows what is going to happen to the economy when this happens. Maybe it will be unnoticeable; maybe parents will not be able to pay school fees, maybe students won’t be able to afford text books, maybe the Naira will turn to toilet paper, but who cares. Emefiele is a rich man; he can afford 100 million Naira to buy a ticket. He can afford to gamble with the country’s vault, he has the backing of whoever ordered him to flood the market with Naira mints.

As Nigerians await the coming of the new Naira notes, we should brace ourselves and our pockets for one of the hardest falls in the recent past. No one can predict what is going to happen before February 2023, but we know that only the strong shall survive.

In terms of the look of the new Naira note, we are promised nothing at the moment, so we should expect nothing. But if you hate surprises like me, we can tinker with some expectations.

Yesterday, a friend of mine told me he dreamed that he saw Emefiele’s shiny portrait on the new N1000 note.

If you can guess whose head is also on the naira notes, chances are you won’t be wrong.

Now you know the real reason for the redesigning of the Naira notes.

Peace be unto you!