The CBN New Naira Notes Benefits, Frustrations. Politics and Gist

“The benefits of the currency redesign to the Nigerian economy are enormous. This policy will help to control inflation as the exercise will bring the hoarded currency into the banking system, thereby making monetary policy more effective, it will also help with better design and implementation of monetary policy as we would have much more accurate data on money supply and monetary aggregates.

This exercise would help in increasing financial inclusion, moving towards a more cashless economy, and ensuring greater formalization of the Nigerian economy.

The currency redesign would assist in the fight against corruption as the exercise would rein in the higher denomination used for corruption and the movement of such funds from the banking system could be tracked easily.

currency management is a key function of the Central Bank of Nigeria, as enshrined in Section 2 (b) of the CBN Act 2007. Indeed, the integrity of a local legal tender, the efficiency of its supply, as well as its efficacy in the conduct of monetary policy are some of the hallmarks of a great Central Bank.

“In recent times, however, currency management in Nigeria has faced several challenges that have continued to grow in scale and sophistication with unintended consequences for the integrity of both the CBN and the country. Some of these challenges primarily include:


“First, a significant hoarding of banknotes by members of the public, with statistics showing that N2.72 trillion out of the N3.26 trillion currency in circulation as of June 2022 was outside the vaults of commercial banks across the country, and supposedly held by members of the public. This statistic shows that 84.71 percent of the currency in circulation are outside commercial banks’ vaults, with only 15.29 percent in the Central Bank and Commercial banks’ vaults.

“Second, is the worsening shortage of clean and fit banknotes with an attendant negative perception of the CBN and increased risk to financial stability;

“Third, there is increasing ease by criminals and


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