Financial experts and analysts have expressed mixed reactions over the proposed Naira notes redesign by the Central Bank of Nigeria (CBN).
Recall that the CBN, on October 26, made known its decision to redesign the N200, N500 and N1000 notes by December 15, 2022.
The apex bank added that the existing notes will no longer be regarded as legal tender by January 31, 2023.
Justifying the development, CBN Governor, Dr Godwin Emefiele, lamented that 85 per cent of the currency in circulation is being hoarded by Nigerians.
Emefiele added that the redesigning of Naira notes would help to curb counterfeit, as well as hamper ramson payment to terrorists and kidnappers.
CBN’s announcement has generated polarised reactions even within the government itself.
Minister of Finance, Budget and Planning, Zainab Ahmed became a known critic of the planned policy following her comment at the Nigeria Senate that she was not consulted.
READ ALSO: Buhari Declares Support For CBN’s Move Ro Redesign, Replace Naira Notes
Although President Buhari Muhammadu seems to have saved the situation when he stated that he backed the CBN on its move to redesign naira notes.
However, speakingon Monday, some financial experts described the Naira notes redesign idea as wasteful, without economic value, while others justified the move.
A Financial Inclusion/Wealth Management expert, Mr Idakolo Gbolade, said the decision will not positively lift the ailing Nigerian economy.
He explained that the pronoucement has further devalued the Naira against Dollar.
“The reasons given for redesigning the Naira notes regarding efforts to trace ransom payments or curbing counterfeiting may be germaine but it’s attendant cost could further increase inflationary pressures on the economy. This decision will not positively lift the economy.
“Presently the pronouncement has further devalued the Naira with its exchange rate going for N815/$ in the black market.
“The sudden change could be politically correct but economically damaging due to the short period of implementation which could cause upheavals in the financial system.
“This sudden rise is the exchange rate of Naira to US Dollars is largely due to massive request to exchange the Naira notes to dollars which has further increased the scarcity of dollars and put more pressure on the Naira thereby reducing our foreign reserves.
“The continous devaluation of the Naira will further hurt the economy and increase the cost of production and cost of living”, he stated.
READ ALSO: Naira Redesign Policy: Kidnappers Will Demand Dollars For Ransom – Gumi
On his part, the Chief Executive Officer (CEO), Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf disclosed that the exercise has no monetary policy significance.
Muda added that the country can survive without such intervention rather CBN should devote its attention to solving the issue with liquidity in the foreign exchange market, Naira depreciation and soaring inflation.
In his words, “Currency as a percentage of money supply is less than seven percent. The exercise therefore has no monetary policy significance.
“Besides it will come with huge logistics costs, and avoidable dislocations to small businesses, most of whom are in the informal sector.
“This is one intervention we can do without. There are more urgent issues demanding the attention of the CBN. We have issues with liquidity in the foreign exchange market, the depreciating currency the recent Moody’s downgrade of nigeria, soaring inflation and many more.
“The CBN should save the citizens and the economy the trauma of this currency redesign. It is a distraction we can do without.”
Meanwhile, Professor of Management and Accounting, Lead City University, Ibadan, Godwin Oyedokun, said the move could help distort flow of illicit funds.
“Well, I have reviewed it, I actually do not have problem with it. I don’t have to support it because of the opinion of others, ones it is correct and according to the law, I will support it.
“I believe it is the right thing to be done. Like Buhari said, it is only those that have issue that will not support it. Some people said it will affect exchange rate, I don’t believe in this.
READ ALSO: Redesigning Naira May Worsen Forex Crisis, Ex-CBN Deputy Gov. Identifies Risk
“It can be used to distort the flow of illicit funds. If you don’t have business in holding dollars, you shouldn’t hold it. A lot of money will be in circulation now but it is temporary. I expect by January, February, another policy should come in, because one should not have any reason in holding cash. The cost of printing Naira is more; everybody will be ok without physical exchange of cash”, he said.
It was learnt that commercial banks have put forward measures to facilitate an easy cash collection process from depositors before the January deadline.
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