NAIRA REDESIGNING: IMPLICATION ON NIGERIA ECONOMY
CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
The redesign of Nigerian Naira banknotes may benefit the economy in a number of ways. First of all, it might improve the currency’s general aesthetic appeal, raising its value and perceived worth both domestically and outside. Second, the redesign procedure might enhance the notes’ security characteristics, lowering the possibility of counterfeiting and perhaps boosting public confidence in the money. Thirdly, the redesigned design might foster a greater sense of national pride and identification among the populace, encouraging the usage of the naira as a means of exchange and promoting economic stability.
It is crucial to remember that the effect of revamping the currency will rely on a number of variables, including how well the change is implemented and the status of the economy as a whole. The redesign of the Naira notes should ultimately be a component of a larger economic improvement strategy, and its success will be determined by its capacity to promote economic stability and progress.
The naira will undergo its 16th redesign or alteration since 1959 when the Central Bank of Nigeria (CBN) implements the adjustment by January 31 of the following year. Both the notes and the coins will be affected by the suggested adjustment. It is asserted that every five to eight years, central banks are allowed to redesign, create, and circulate new local legal currency in accordance with international best practice. The naira last had a redesign 20 years ago.
None of the modifications, however, have generated as much discussion and interest as the anticipated redesign of the naira in 2023. Some naira denominations will sport new looks, CBN Governor Godwin Emefiele stated on October 26. The N200, N500, and N1,000 notes are these. Emefiele stated that the apex bank was concerned about the handling of the current series of banknotes and cash in circulation, especially those not connected to Nigeria’s banking system (thenationonlineng.net)
The CBN is extremely concerned about the scale and complexity with which unscrupulous individuals have misused the naira, from hoarding to counterfeiting the notes. With statistics revealing that more than 85% of the cash in circulation is outside the vaults of our commercial banks, Emefiele said that people were hoarding banknotes. To be more precise, as of the end of September 2022, data that was available at the CBN showed that N2.73 trillion of the N3.23 trillion in money in circulation was reportedly held by the general population outside the vaults of commercial banks across the nation” (thenationonlineng.net)
Many Nigerians are unaware that the CBN’s reputation has suffered as a result of the varied naira notes’ worn-out appearances, which has heightened dangers to the country’s financial stability. Because of the “growing ease and risk of counterfeiting revealed by various security reports,” the credibility of the naira and the CBN’s capacity to successfully control the currency were further threatened. Emefiele claims that “recent developments in printing technology and photographic technology have made counterfeiting relatively easier. The CBN has observed much increasing rates of counterfeiting recently, particularly for banknotes with higher denominations like the N500 and N1,000 notes. (thenationonlineng.net)
A redesign of the Naira note can harm the Nigerian economy in the following ways:
Expense: The government’s budget may be impacted by the high cost of revamping the currency and producing new notes.
Business Interruption: Businesses and customers may experience confusion and annoyance as a result of the process of exchanging old notes for new ones, which could result in a disruption of economic activity.
Issues with Acceptance: The public may take some time to embrace the new notes, which could cause short-term confusion and resistance to using the money.
The intricacies of the redesign process, the effectiveness of the execution, and the degree to which these possible negative repercussions are managed will all affect how the redesign of the Naira note will affect the Nigerian economy.
The economy could benefit from the redesign of naira notes in a number of ways:
Enhanced security measures: New security measures can decrease currency fraud and boost consumer confidence, which can support economic stability.
Increased tourism: A fresh, contemporary design might make the money more appealing to travelers, boosting foreign exchange earnings.
An rise in national pride and a sense of national identity might result from a makeover of the money, which would also boost people’s confidence in their country and its currency, which would boost the economy.
Nigeria may be modernizing and adjusting to new economic realities if the design of its currency is updated to include modern materials and technologies.
It is crucial to remember that while a redesign of the currency might have these potential advantages, it will rely on how it is carried out and the overall state of the nation’s economy. Based on this background the resarcher wants to investigate naira redesigning: its implication on Nigeria economy
Statement of the problem
The economy of Nigeria could benefit or suffer from redesigning the naira notes. On the plus side, it may aid in lowering money fraud, enhancing security, and boosting currency reputation. It can also raise national pride and the view of Nigeria as a contemporary nation with a healthy economy abroad. The redesigning and distribution of new notes can be expensive, and there may be a brief halt in commerce while people get used to the new money. Businesses may also have to adjust their cash handling procedures in order to use the new notes. Overall, the success of the implementation process and the capacity of the government and financial sector to address any issues that occur will determine how the redesign of the naira notes affects the Nigerian economy.
Objective of the study
The objectives of the study are;
- To find out the benefit of redesigning naira note on Nigeria economy
- To find out the cost of redesigning naira note on Nigeria economy
- To find out the effect of redesigning naira note on Nigeria economy
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