Former CBN Deputy Governor, Others Declare Support For Naira Notes Redesign

A former CBN deputy governor has declared support for the redesign of Naira notes.

EKO HOT BLOG reports that several reactions have trailed the decision of the apex bank following the announcement to redesign the N200, N500 and N1000 naira notes by the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele last Wednesday.

Some Nigerians have expressed different opinions and thoughts about the new policy.

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Some have supported the decision of the apex bank saying it is best for the nation’s economy, while others have faulted the policy saying it is not a top priority for the CBN at this time, as other means can be adopted to revive the economy.

This online media platform gathered that a former CBN deputy governor, Prof. Kingsley Moghalu, has however declared his support for the apex bank’s decision on the new naira notes.

According to him, the CBN’s move to redesign the naira notes is a commendable step capable of reducing the country’s inflation.

He noted that the move had become necessary for national security, however a 90-day window for the policy’s implementation is too short.

Moghalu, in a statement, had disclosed that “I fully support the Central Bank of Nigeria in redesigning the Naira. If 80 per cent of the bank notes in circulation are outside the banks, that is troubling.

“The CBN obviously wants to force all those notes back into the banking system. Those with the notes must surrender them to get new ones or else it becomes illegal tender after January 31, 2023.

“This is also a way to withdraw currency from circulation; an unorthodox way of tightening the money supply since the country is battling high inflation.

“The flip side is that people who are holding huge amounts of cash outside the banking system for nefarious reasons will go to the parallel forex market to buy hard currency, putting further downward pressure on the value of the Naira as too much Naira will be chasing too few dollars.”

Moghalu doubted that the step alone would solve the nation’s inflation, “Because there also are other major reasons for inflation such as the forex crisis, which this new move can exacerbate, as well as the impact of the security crisis on food price inflation.

“This will put a lot of operational pressure on commercial banks and the financial system in general.

“A 90-day window will have been better, but one can understand the need to avoid interfering with the elections.” the former deputy CBN governor noted.

Also in support of the policy was the Labour Party (LP) governorship aspirant in Imo State, Capt David Mbamara (rtd), who said “This is a tacit admission by the Federal Government that Nigeria’s economy has collapsed. It is equally a technical way and a very desperate attempt by the Nigerian state to redeem the Naira.

“Corruption has eaten so deep into the fabric of Nigeria state that corrupt money is now under people’s homes and under their beds, and what you have now is too much Naira pursuing few dollars because the economy is no longer productive but rather consumption-oriented.

“So, our Naira is not backed by foreign earnings and the only foreign exchange earner for Nigeria, oil, has also collapsed,” the Nation newspaper reported.

On his own part, Chief Executive Officer (CEO) of BIC Consultancy Services, Dr Boniface Chizea said “The CBN has the sole authority to issue legal tender currency in Nigeria. The bank alone is able to determine the quantum of currency to release to align with other critical objectives, particularly macroeconomic stability.

“The CBN designs the face of the currency. This is one reason why the mint which prints currency is a department supervised by the Central Bank. I speak authoritatively here.

“The CBN does not report to the minister of finance even if one should have expected that she should have been taken on board. But remember that when you ventilate such policies, there will be so many reasons to convince one not to go ahead.

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“The rate of exchange will fall as we are now witnessing because the race to convert illegally held Naira has now commenced with this announcement. The challenge confronting the CBN now will be how to determine measures to check the slide,” Chizea submitted.

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