Since the emergence of President Muhammadu Buhari as president of the country in 2015, the naira has remained in a state of free fall in the money market, compared with other currencies of the world. In fact, economists say, at no time has the naira performed so poorly in the last forty years as it is today. As at this week, the exchange rate of the naira against the United States Dollar (USD) was N857 to 1$, with indications that it may go higher since it has continued to be on a steady fall. The pronouncement by the Central Bank of Nigeria, CBN Governor, Mr. Godwin Emefiele recently on the CBN’s plan to redesign and replace the N100, N200 and N500 notes currently in circulation was received with mixed feelings by Nigerians. Although the CBN boss cited several daunting challenges confronting the naira with some of them bordering on the integrity of both the CBN and the country, interestingly. Those who argued against the move by the CBN to redesign the naira, hinged their position on the timing, saying it could backfire and hurt the already fragile economy more if not properly managed and executed, especially at this time when the cost of living is high and uncertainties are the order of the day in the country. Other technical reasons further adduced by the CBN, which Emefiele said the new measure would solve are; the sliding of the naira against other currencies, inflation, the lending rates which he said has emasculated the production sectors and the SMEs, etc.
According to the Apex Bank, 85 percent of naira in circulation outside the banking system as at the end of September, 2022, stood at N3.23 trillion compared to N1.46 trillion in December 2015, bringing a whopping N2.73 trillion trapped outside the formal banking system. All these said, we don’t think that Nigerians have problems with the redesigning of the naira, but the problem is, how possible it will be for government to make the naira appreciate in the face of the strangulating economic realities. That the naira is on daily basis sliding against the dollar does not connect to an average Nigerian, especially for a government that promised that the naira will be at par with the dollar when elected into office. Again, that the operators of Bureau De Change now have access to direct dollar sales may be due to round tripping that is going on in the banking sector somehow has revealed that the redesigning of the naira may not necessarily achieve the desired result if nothing is done; firstly, to checkmate the excesses of those in authority in the financial sector. The issue of denying kidnappers and money ritualists cash as also advanced by the Apex bank for the new policy however should be blamed squarely on the CBN and the law enforcement agents for their inability to effectively enforce the money laundering laws as it should be. The timeline given to roll out the new notes is few weeks from now. A similar idea of the kind took place in 1984 when the same President, Muhammadu Buhari was the military head of state.
Records have it that people suffered unnecessarily while waiting to collect or deposit their monies at the time. With the 2023 general elections approaching amid economic down turn, and now the redesigning of the naira notes, let it not be a way to further fritter the nations scarce resources and create problems for the incoming administration. While we are aware that the Central Bank of Nigeria under Emefiele has the statutory right as enshrined in the constitution to manage the national currency, ensure its integrity, efficiency, circulation and overall monetary policy, we caution that such responsibility should be carried out in line with best practices. The state of the Nigerian economy does not require experiment but well thought out strategies and plans capable of addressing the financial and economic woes of the country at this point in time when businesses are closing down and unemployment rates soaring. We want to remind the government that the interest of the masses should be paramount in formulating an economic and monetary policy that would work for everyone. We align with the expert views that policies that could worsen the already tensed economic situations should not be contemplated at all, especially now that elections are drawing near. We want to see the CBN, working hand in hand with other law enforcement agencies at ensuring that the staggering amount of the naira said to be in the hands of individuals find their way back into the banking system. Caution must also be taken to avoid unintended consequences on the economy that is already on its knees.
