In order to prevent hoarding and counterfeiting, economists have encouraged the Central Bank of Nigeria (CBN) to take strict control of the quantity of the redesigned naira notes it would allow into circulation.
Prior to the Dec. 15 launch of the revised notes (N200, N500, and 1000), the experts provided guidance in separate interviews with newsmen.
The rationale for redesigning and releasing new naira notes was due to hoarding and counterfeiting, according to the apex bank.
Professor of Economics Hassan Oaikhenan from the University of Benin, Edo, Department of Economics and Statistics encouraged the central bank to take tight control of the money in circulation.
“For the policy to achieve the desired objectives, it is advisable that the Central Bank implements the policy with all the shrewdness and meticulousness it can muster.
“The apex bank must ensure that it maintains a very firm control of the quantity of the redesigned currency that it puts in circulation.
“There is need to limit, as severely as possible, the supply of the physical currency, especially the higher denominations.
“The lower denominations may be made more freely available while the higher denominations, especially the N200, N500 and N1, 000 notes should be made to be as scarce as possible,” he said.
Additionally, Oaikhenan counselled the apex bank to resist the urge to be sloppy in putting these bigger amounts into circulation.
He said, “Otherwise, the entire policy option and action, which has the potential to boost the success of much desired cashless policy will become self-defeating.”
The director of the Centre for Economic Policy Analysis and Research (CEPAR) at the University of Lagos in Akoka, Prof. Ndubisi Nwokoma, also asked the central bank to guarantee that the release of the new notes is managed.
“The redesign of the naira is necessary in some respects, in terms of bringing back hoarded cash into the banking system.
“But, it has some shortcomings which the CBN should take cognisance of. It has worsened the exchange rate with the increased demand pressure in the market.
“The CBN should ensure that the release of the redesigned notes should be controlled to ease the pressure on the foreign exchange market.
“Secondly, CBN should watch out for possible counterfeiting given the simplicity in the new notes.
“The limited release in conjunction with the proposed cash withdrawal limits come January 2023 will help to minimise the incidence of vote buying in the forthcoming general elections,” Nwokoma said.
Ikechukwu Unegbu, a former president of the Chartered Institute of Bankers of Nigeria, claimed that the redesign of the naira would promote financial inclusion while ensuring monetary stability.
“Particularly now more people have to embrace the various payment platforms for their financial transaction with the CBN withdrawal law.
“This will enhance our quest for a cashless policy and ensure our economy moves in line with global trends,” he said.
He noted that the naira seemed to have become quite stable with the pronouncement of the redesigning of the naira by the apex bank.
“We don’t often get those needless depreciation of the value of the naira, as speculators are finding it challenging.
“Over time, we expect the naira to appreciate against other national currencies with the CBN firmly in charge of its supervision,” he said.
