Abuja, Nigeria
cnn business
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Nigerians have criticized a “re-devaluation” of the country’s local currency proposed by their central bank to curb counterfeiting and hoarding of large sums of money outside the country. Banking System.
President Muhammadu Buhari on Wednesday unveiled newly designed 200-, 500- and 1,000-naira banknotes. Saying “The new naira banknotes have been strengthened with security features that make them difficult to counterfeit.”
The new notes are very similar to the notes in circulation. The design of the highest denomination 1,000-naira note, which includes the national coat-of-arms and the headquarters of the Central Bank of Nigeria, is largely unchanged. The only significant difference is the colouration – it is largely blue with brown underprints.
The Central Bank of Nigeria (CBN) says that by January 2023, the new design notes will replace the notes in circulation.
But many locals are not impressed, reportedly describing the redesigned banknotes as mere color corrections, given their resemblance to the old notes.
“Snapchat filters, a waste of time and resources, so a whole CBN can’t hire experts to redesign naira notes. It’s not a redesign, a redesign,” a Nigerian Tweeted,
“What a waste of time and resources… What’s the difference?” another questioned,
CNN has sought comment from CBN.
Leading economist Bismarck Raven told CNN that changing the appearance of a currency does nothing to its value and does little to prevent counterfeiting.
The government says that new security features have been added to the new notes, but Raven says that the changes made in the notes are not enough to rein in fake notes.
The value of the Nigerian naira has been in decline in recent years, falling to a record low on the black market where it was trading at around US$800 as of Friday.
“It doesn’t change anything,” Raven says of Naira’s redesign. “It doesn’t increase the value,” he also says: “There was no redesign. The color of the currency changed, that’s all. The change isn’t significant enough to stop counterfeiting.”
According to CBN’s annual, Nigeria’s 1000- and 500-naira denominations are the most counterfeited. report good Last year.
News of the naira redesign – first announced last month – generated mixed feelings among Nigerians, some of whom questioned the cost of printing the new notes at a time when the country’s main source of income is suffering from dwindling oil revenues. battling.
Central Bank Governor Godwin Emefile hopes that the introduction of the new notes will help control inflation, which has occurred recently. reached a 17-year highAnd also fight corruption.
These goals, says Raven, cannot be achieved.
“It is just a change in colour. I cannot see the connection between the color of the currency and the desired goals. If the goal is to reduce inflation, it will not achieve it. [Changing the look of the currency] It has no macroeconomic impact,” he tells CNN.
At the unveiling of the new notes on Wednesday, President Buhari said that it has happened About 20 years ago the country underwent a major redesign of its banknotes.
The Nigerian leader said that replacing the current currency with newly designed notes would help tackle the hoarding of money outside the banking system.
“On this basis, I have given my approval for the new design of 200, 500 and 1,000 notes,” he said.,
CBN says the old notes will be completely phased out by the end of January next year, as locals are struggling to deposit their old notes in commercial banks.