CBN, financial experts disagree as apex bank plans redesign of Naira notes after 20 years

The CBN recently announced that at the request of the Federal government, it has redesigned all major naira notes and will start circulating the currencies by December 2022.

The affected denominations are N100 (2014), N200 (2001), N500 (2001), and N1000 (2005) and the last time the bank redesigned the Naira was in 2014 when it changed the design of the 100 naira note to commemorate Nigeria’s centenary.

The long wait, however, has been noted to go against the global best practice as Central banks have been mandated to redesign, produce and circulate new local legal tender every five to eight years.

While the CBN has mentioned hoarding of the Naira, shortage of clean currencies as well as counterfeits and kidnapping as its reason for the redesign, some financial experts, however, have raised concerns about the apex bank's decision.

Speaking on the issue, Okechukwu Unegbu, the past president of the Chartered Institute of Bankers of Nigeria (CIBN) and a financial expert has suggested printing more of the scarce denomination like the N100, N200.

Unegbu added that redesigning the naira was not the most important problem facing the economy.

Also speaking on the issue, Prof. Magnus Kpakol, the former Economic Adviser to ex-President Olusegun Obasanjo highlighted the cost which would accompany the project.

His words, “It will certainly come at a cost. Obviously, the bank must have considered this and concluded that the cost of the exercise is less than the cost of the current situation to the economy.

“Re-designing the currency is not bad and certainly the CBN must have reasons for the decision which could be monetary and even from the executive side”.

According to the CBN governor, Godwin Emefiele, the apex bank has finalized plans for the circulation of the new notes from December 15, 2022.

He also confirmed new and existing currencies will remain legal tender until January 31, 2023, when the existing currencies shall cease to be legal tender.