In what appears to be good news for Nigerians, the Central Bank of Nigeria (CBN) is set to redesign the N200, N500 and N1000 notes by December 15, 2022, to positively impact their value. The apex bank must not only redesign the selected banknotes, but also take a bold step towards restructuring the currency through redenomination. It is to recall coins and make the Nigerian currency the go-to currency for Africa with healthy official exchange rates of around 4.41 naira to the dollar. First, Governor Emefiele must put the coins back into circulation because each currency has a pair of bills and coins. Second, the governor must also rename to bring back the kobo as every currency has major and minor denominations, such as naira and kobo in the case of Nigeria. My questions on the above two points are: where are the Nigerian coins? What caused the parts to run out? I treasure the sweet memories of gold and silver coins (in nand kobo) my parents gave me as pocket money while I was in Ansar-Ud-Deen Primary School (now ADS 1 and 2) , Modeke, Igboho, Oyo State in the 1980s by Igboho-More Community Grammar School at Irepo Grammar School, Igboho. I still spent coins on my travels in the UK, Germany, France, Switzerland, UAE, and not too long in Cyprus and Turkey. This indicates the presence of coins across the world except for a few countries like Nigeria.
What does currency redenomination entail? Redenomination consists of eliminating or removing two zeros from the currency or moving two decimal places to the left, which will consequently revive the coins in circulation, in the Nigerian case as happened in Ghana in 2007 with four zeros removed and in Turkey in 2005 as six lost zeros while the name of the Nigerian currency will remain the naira and the kobo. During the transition period, the existing naira will be called “old naira” and the new one will be called “new naira”. After the transition period, the word “new” can be removed, and we keep all kobo in coins, all naira in banknotes, and the minor naira can also be in coins. In the process, higher denominations such as N2000, N5000 and N10,000 notes are to be introduced and through redenomination will be converted to N20, N50 and the new highest N100 notes respectively. Along the same lines, existing banknotes of N1000, N500, N200 and N100 will be renamed to N10, N5, N2 and N1 new Naira respectively, while the direct minting of N50-N5 polymer banknotes will automatically become 50-5 kobo coins. , including new ½, 1 and 2 kobo coins.
All nations, developed and developing, settle transactions with notes and coins in their respective circulations with varying dominance ratios, say 90:10% or 95:5% respectively, while Nigeria operates on a currency with 100:0%. ratio in a mono-cultural circulation. It is a pity that 15 year old Nigerians do not know what a coin or metallic currency looks like. The last monetary currency was reintroduced 15 years ago on February 28, 2007, when new coins were issued in denominations of 50 kobo, 1 and 2 naira, with the bimetallic 1 and 2 naira i.e. say that each coin is made of more than one metal or alloy, usually arranged with an outer ring around the contrasting center but in no time, unfortunately, out of circulation. To achieve the currency restructuring and coin recall, the federal government and the CBN, together with the National Assembly, should temporarily remain silent on the currency overhaul and extend the set deadline from December 15 to a new date. in 2023 to give enough space for education. Nigerians in particular, people with low literacy, the elderly and rural dwellers on currency restructuring.
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Another reason for extending the date is to allow the federal government to make additional fiscal provisions to capture currency redenomination. The redenomination will gobble up more money than the redesign. In 2007, the then CBN Governor, Professor Charles Soludo, told a bankers’ committee meeting in Lagos that: ”…. We intend to restructure the entire currency by removing two zeros or moving two decimal places to the left of the currency, and issuing more coins. This would involve a full currency exchange and the phasing out of all existing denominations from August 1, 2008. Indeed, at the current exchange rate, this policy would mean that the Naira/US dollar exchange rate would be around 1 .25 naira for 1 US dollar. $1 then. All assets, prices and contracts in Naira will be redone by removing two zeros or two decimal places to the left from this date. It was either that the presidency of the late Umar Yar’Adua in 2007 failed in the redenomination attempt, or that Soludo was not convincing enough, or the instilled phobia that millionaires and billionaires would be relegated to millennials respectively. and millionaires, that was the problem, or a mixture of the three factors, since the new value of the currency would remain the same as the old ones.
The former CBN Governor, who was one of the brainboxes of President Olusegun Obasanjo’s successful administration and now the Governor of Anambra State, has a lot to say to Nigerians on his redenomination proposal in 2007 and open to the nation the stumbling blocks he encountered, which will guide the governor. Emefiele on the cum redenomination overhaul. The interrogation on the currencies and the disappearance of the kobo pushed me to publish some articles on the quest for the return of the metallic currencies in circulation in the national daily newspapers. After eight years of inaction, we are still crying out for responses from the appropriate authorities: the Federal Government, the Ministry of Finance and the Central Bank of Nigeria (CBN). So, learning about the CBN currency redesign movement re-energizes me to echo the crusade before it’s too late. It is apparent from the above that the redenomination of the Nigerian currency overshadows the redesign. To bring the country’s currency in line with global currencies and to redeem coins from perpetual extinction, I would like to advise President Muhammadu Buhari to embark on monetary restructuring and find ways to put the precious funds back into circulation. metals to comply with global monetary standards. This will add color to his economic reforms and be a parting gift to Nigerians in 2023.
- Dr. Alao is a lecturer in the Department of Economics at the University of Abuja.