By Kate Halim
Last week, President Muhammadu Buhari unveiled the redesigned 200, 500 and 1000 naira notes – the highest denominations of Nigeria’s currency.
In his remarks, the president underscored the importance of re-designing the new naira notes, saying it will help the country to address the issue of illicit financial flows, tackle corruption, and improve the economy and value of the Nigerian currency.
Saturday Sun spoke to some Nigerians who shared their thoughts on the new naira notes.
Petra Akinti-Onyegbule, a politician and communications expert, stated that she has seen a lot of pessimism and criticism from people regarding the redesigned naira notes.
She noted that her initial reaction was that since she didn’t have money stashed anywhere; the new notes wouldn’t change anything for her but she would have loved the notes to be smaller in size.
“I was looking forward to the sizes being reduced like that of N50 notes because it is smaller and can fit into any wallet,” she said.
Akinti-Onyegbule said the new notes have some subtle changes beyond their colours. The security features in the new notes, she noted, are a welcome development. She believes that many people are focusing on the mundane and not on the substance of the issue. She added that the important thing people should focus on is why new notes are being redesigned 17 years after the last notes were designed.
“The Central Bank of Nigeria saddled with the responsibility of handling monetary policies said that they can’t trace and manage money in the economy, because 80 per cent of the money is outside the banking sector and to restrict issues of currency counterfeiting, lack of traceability, and they needed to print new notes to control how money moves in the economy. That is the most important reason for changing the design of the naira.”
She added that the Central Bank is also trying to reduce incidents of withdrawing cash over the counter to ensure that Nigerians have enough money in circulation. She stated that currencies are printed so that they can work for the economy and she understands that people need to criticise but they shouldn’t take it to the level of pessimism and mockery.
“We should hope that every little step we take in this country will take us to the destination where Nigeria is working well for us. It is a good step in the right direction and hopefully, it is going to achieve the goals for which they were designed, which include managing the risks of currency hoarding and tracking people who are using our money for illegal activities such as kidnappers and bandits. I hope it will achieve its purpose,” she said.
Chris Adetayo, a strategic communications expert told Saturday Sun that statutorily, the Central Bank of Nigeria has the right to change naira notes. He said that it is legal and since it has been a long time since the notes were changed, this is a welcome development.
He stated that what the Central Bank of Nigeria has been doing for years is reprinting and taking old notes out of circulation.
Adetayo said he believes that changing the looks and feel of naira notes at this time is valuable due to all manner of security purposes such as counterfeiting, anti-terrorism and so on.
However, he quickly added that he has an issue with the quickness with which it happened. “In some other countries, the Central Bank doesn’t put a timeline on when notes can no longer become a legal tender. The length of time for changing notes should be relatively long so that it doesn’t create panic in the country,” he said.
Speaking about the colours of the newly redesigned notes, Adetayo stated that he has no objections to how they look because he has only seen photographic shots of them but haven’t held them in his hands to know how they feel.
He added that: “Changing currencies can be cosmetic but as long as they serve their purpose, it’s okay. I guess a lot of people were expecting radical changes to the naira but that is not always necessary. A few changes here and there that distinguish a current note from a previous one are okay.”
A financial expert, Dr Nannemeka Obiareri noted that he didn’t expect any significant changes in the new naira designs. He said that his concern is mopping up the huge volume of naira in circulation, which the Central Bank put at 2.7 trillion naira.
Obiareri stated that what the Central Bank did was just change the colours of the new notes. “That is okay, because the essence of the exercise is to make sure that the old notes are no longer used as legal tender within a specified period of time.
“I believe that a country like Nigeria in the 21st century should try as much as possible to de-escalate the use of cash in all transactions. Out of the 3.2 trillion naira the Central Bank of Nigeria claimed that they printed, only about 550 billion circulate within the banking industry”, he said.
Obiareri revealed that an average trader in Nigeria will not stuff money under his or her bed and use it for months or years. He said that the longest time they can keep naira at home is for two weeks.
“It is either they are using it to buy dollars to travel to China for business or they are using it to buy more goods for sale. Most of the people who engage in the hoarding of currencies are political criminals, kidnappers, bandits or those who bought the naira through illegitimate means.”
He said that what the CBN is trying to do is to make sure that there is money in circulation in the country. But he quickly added that his worry is that if they replace the old notes and replace the same volume of cash in the economy, within one year, the same people who mopped up the old notes will mop them up again.
Obiareri said that if the Central Bank of Nigeria wants to make this country work, they shouldn’t release more than 50 or 100 billion naira new notes into the system. “If you look at the banking industry based on the records of Nigeria Deposit Insurance Corporation (NDIC), less than 0.4 per cent of Nigerians have N500, 000 deposits in their accounts while 99. 6 per cent of Nigerians don’t have up to N500, 000 in their accounts.”
Based on this record, he said that over 133 million Nigerians are multi-dimensionally poor and over 178 million don’t earn up to N60, 000 a month. “What it means is that most Nigerians don’t carry cash. Most of their transactions are done through bank apps and over-the-counter transactions.”
Obiareri advised that the Central Bank of Nigeria shouldn’t push out more than 100 billion naira new notes into circulation because this is the only way this exercise of redesigning new notes will work. He added that if they end up pushing out more money than necessary into circulation during this electioneering period, the politicians will mop it up.
“Printing new naira notes is good because it will help us checkmate inflation, reduce criminal activities and track terrorist funding. The easiest way to track corruption is through electronic channel transfer. That way, you can follow the money trail,” he said.
The financial expert further stated that the CBN should also go the extra mile to get the National Assembly to amend the financial law and make dollar-cash transactions a criminal offence. “If you are caught spraying dollars or transacting with dollars, paying your rent in dollars or bribing someone with dollars, you will be penalized. That way, we will checkmate corruption and control monetary policies in this country,” he added.
Iniobong Udoh, a digital skills expert, also shared her thoughts on the newly designed naira notes. She told Saturday Sun that she is trying to be optimistic and positive about the new naira notes because she has seen a lot of people criticise them.
She said that the design is a one-colour design which is cheaper to print and good for our economy since the CBN is trying to checkmate inflation. She added that the issue a lot of people have is that the new notes look ugly and unappealing.
Udoh said: “I listened to the President talk about the new notes and he said they have modified security features that will help against counterfeiting. I think a lot of people haven’t taken the time to read about the features of the new naira notes before criticising the Central Bank of Nigeria for just toning down the colours instead of actually redesigning the notes.”
Udoh stated that one can’t see most of these features because they are embedded in the notes but she understands the pessimism of Nigerians. “We have gone through a lot in this country so I understand the pessimism trailing the new notes. A lot of people don’t have faith in this present government. The only exciting thing about the new notes is that they didn’t cost much to print. The use of one colour on the notes is brilliant. The issue of printing one colour currency helps in reducing costs.”
Mr Godwin E Morka told Saturday Sun that redesigning the naira notes is a great initiative. He said that the banking system is being starved of funds leading to a scarcity of funds for banks to fund the economy and it has to be controlled. He noted that a situation where 60 per cent of the money in circulation is in private vaults is terrible for the economy.
Onyeche Elizabeth Agbiti-Douglas said she agrees with the intentions of the CBN but noted that it would have been nice to see some creatively designed notes because the new notes don’t look different from the old ones.
She said: “I understand the need to change the look of the currency for security purposes and as a way to regulate the amount of cash circulating in the economy. But the new naira notes don’t look very different from the old ones, aside from the colours used. It would have been nice to see some creatively designed ones. In any case, if these are now our legal tender, we have no choice but to use them.”