Experts Divided on Naira Redesign, Advise CBN, EFCC, Other Security Agencies

Since the governor of the Central Bank of Nigeria, CBN, Mr. Godwin Emefiele announced the redesign and reissuance of Naira notes, specifically N200, N500, and N1000 notes, starting December 15, there have been several controversies and a spike in the Naira to dollar exchange rate across the country.

A walk to Udi Street and other Uyo dollar exchange centers showed an increase in customers, especially political agents, exchanging Naira to other hard currencies, which drove up the exchange rate.

Sunday evening in Udi street, a dollar was exchanged at N875.00 and sold at almost N930.00.

Umaru, a currency exchanger, told our correspondent that dollars are now sold at the buyer’s bargaining power, hoping to reach over a thousand Naira per dollar by next week.

The CBN governor announced that from December 15, the old and new currencies would circulate side by side, and by January 31, the old will phase out and become illegal tender if not changed.

He said redesigning the naira was to affect its value and address geometric inflation, among other reasons.

The Minister of Finance, Mrs. Zainab Ahmed, has refuted the claims before the Senate, saying that the policy will have serious consequences on the value of the naira to other foreign currencies, especially in this time.

In a Facebook post, Uyo lawyer and public affairs analyst Edmund Ewa criticized the CBN.

He said that Emefiele’s claims that politicians are hoarding more than half of Nigeria’s cash circulation in Naira don’t add up, insisting that politicians hoard more dollars, pounds, gold, and even crypto currencies since Naira plummeted.

Emefiele claimed that over 3 trillion Naira notes are in circulation, but banks have only counted a trillion. So the unaccounted trillions are likely stored somewhere.

“Mr. Emefiele must think Nigeria is a populace of simpletons to insinuate that 2 trillions cannot comfortably circulate among a population of over 200 million people,” Ewa said. Division is N10,000 per person. Last I checked, the money laundering act 2011 limits cash possession to N5 million.

Another flaw in CBN’s logic is the cost of printing new money in an inflationary economy, especially at its peak. The CBN should first inform Nigeria of the cost and economic impact of printing new Naira notes.

“By virtue of section 8(4) & (5) of the CBN Act, Mr. Emefiele is presumed to have presented this report to the National Assembly before seeking and obtaining presidential approval to so proceed, default of which the National Assembly are now duty bound to probe the said policy in exercise of its powers in Section 88(1) & (2) of the 1999 Constitution of the Federation Republic of Nigeria (As Amended).”

The lawyer also questioned why the Federal Government would rush to fizzle out the currency without giving people enough time to switch to the new notes when the current administration has until May 29, 2023, to handover.

He claimed that the CBN boss’s redesign, which would cost 3.3 trillion naira, would dry up currency flow nationwide by February 2023 to monitor political opponents’ transactions.

In an interview, Professor Emmanuel Onwiduokit, a senior lecturer in the Economics Department at the University of Uyo, Uyo, praised the CBN for redesigning the Naira notes, saying it was long overdue.

Though he disagrees with some Federal Government policies, he welcomed redesigning the naira notes to combat counterfeiting.

Emmanuel said the last time the Naira was redesigned was 20 years ago, but it’s better to get it right late than never. The law requires periodic redesigning every five to eight years.

“Each currency has a life span and after that lifespan, it has to be withdrawn and replaced and that replacement is the new note which is being reprinted and you have to pay for it; the only difference is the cost of redesigning and there must be additional security features that will make it more complicated.

“As the Central Bank Governor rightly stated, most of the money printed is outside the banking system, under pillow cases, coffins, so the Central Bank’s monetary policy cannot be effective because you will be dealing with just a fraction.

But with this, people will be forced to take money to the bank, and we even have a law in Nigeria that limits the amount of cash you can carry. The EFCC and financial crime intelligence will know who has deposited outrageous sums and begin investigations.”

The don said the N3.3trillion cost to redesign the Naira was justified because the Central Bank normally pays for currency reprints, and the redesign would add security features to prevent counterfeiting.

Are we not paying for currency printing? The only difference is redesigning—if they print the N1000, they can pay N50 or 70. 94 cents is the US dollar.”

He also blamed corrupt politicians for the rise in dollar purchases and urged the CBN to work with the EFCC and other security agencies to monitor and investigate them.

Dubious politicians want to carry less naira, which is why the dollar is falling. Since they will change it to foreign currency, I advise the CBN to partner with EFCC and other security agencies to monitor and reduce this. Monitor the bureau de change and black market, and arrest and investigate anyone changing suspicious amounts of money.

“I can’t see why someone should be keeping one billion Naira in a house, government can even recover a lot of tax from it because someone who made money legitimately and didn’t pay tax, government will establish first what did you do to make such amount, if it’s genuine, you pay tax, but if it’s not genuine, you forfeit the money.”

Emmanuel said each segment responsible for policy implementation must be alive.

He said people, especially in rural areas, needed to be educated about the new naira notes’ security features.