Last Wednesday, the governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, announced plans to redesign N200, N500, and N1,000 notes by December 15th 2022. The proposed plan aims at mopping up excess cash and combating inflation and insecurity by forcing Nigerians to add currencies currently in circulation into the banking system.
Although many Nigerians condemned the proposed redesign for several reasons, ranging from wrongful timing of the plan to the failure of the CBN to prioritize Nigeria’s economic challenges, Brief identified agencies in the country that would benefit from the redesign of the bank notes.
Furthermore, these are the major events that have happened since the CBN made the announcement:
Finance Minister Disowns the Policy
Barely two days after the CBN Governor, Godwin Emefiele, announced the redesign of Nigeria bank notes, the Minister of Finance, Budget and National Planning, Zainab Ahmad, disclosed that the ministry was not aware of the policy. She further supported the claim of many Nigerians that the timing of the redesign poses serious consequences on the value of the Naira against other foreign currencies.
- However, Nigeria’s President Muhammadu Buhari, in an interview on Sunday, disclosed that the policy had his backing.
Naira crashed to N800/$1
Reports on Sunday showed that the Naira (Nigeria’s currency) further crashed to N800/$1 in the parallel markets as forex scarcity continues in the country. This is as several reports claimed that many Nigerians who had stashed cash over the years and do not want to fall under the radar of the country’s financial agencies opted to convert the Naira to dollars. This has spiked the demand for dollars as confirmed by bureau de change traders.
- Another reason for this crash is a set of Nigerians holding a position against the Naira in anticipation of further fall.
IMF Urged Nigeria to Exercise Caution
The resident representative of the International Monetary Fund (IMF), Ari Aisen, asked the CBN to apply caution in redesigning the bank notes to avoid any misstep that could undermine the nation’s confidence in the financial system. IMF further pledged to assist the CBN in any way possible.