Economists have urged the Central Bank of Nigeria (CBN) to take firm control of the quantity of the redesigned naira notes it would release into circulation to avoid hoarding and counterfeiting.
The experts gave the advice in separate interviews with the News Agency of Nigeria (NAN), ahead of the roll-out of the redesigned notes (N200, N500, 1000) by Dec. 15.
The apex bank had identified counterfeiting and hoarding as the reasons for redesigning and issuing new naira notes.
Hassan Oaikhenan, a professor of economics from the Department of Economics and Statistics, University of Benin, Edo, urged the apex bank to take firm 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.
Oaikhenan also advised the apex bank to resist the temptation to be permissive in releasing these higher denominations 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.”
Similarly, Prof. Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research (CEPAR) University of Lagos, Akoka, urged the apex bank to ensure the release of the redesigned notes is controlled.
“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 cognizance 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 minimize the incidence of vote buying in the forthcoming general elections,” Nwokoma said.
Prof. Sheriffdeen Tella, a Senior Economist at the Olabisi Onabanjo University, Ago-Iwoye, Ogun, urged CBN to ensure proper monitoring of the redesigned notes to be released.
“The CBN needs to make use of its nationwide branches to get the new currencies to all states at the same time with clear indication against hoarding or preference for politicians in the distribution to the public.
“This invariably calls for monitoring by the CBN and the need to listen to and verify complaints from banks and non-bank public,” he said.
A former President of the Chartered Institute of Bankers of Nigeria, Mr Ikechukwu Unegbu, said, however, that the naira redesign would ensure currency stability and deepen financial inclusion.
“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.
