The Central Bank of Nigeria (CBN) is planning on replacing its naira currency to reduce excess cash, inflation and crime. Although the currency could be in circulation as early as mid-December, Nigerians will have until the end of January to exchange the old bills, after which they will cease to be legal tender.
This is the first time Nigeria will have changed the design of its currency in two decades.
The bank will redesign and print new bills for the 200, 500 and 1,000 naira denominations, CBN governor Godwin Emefiele told journalists during a news conference in Abuja.
The action is part of authorities’ efforts to halt the slide of the country’s official tender, which has lost more than 35 percent of its value in the past year. The CBN said the measure will help tackle the issue of counterfeit notes and recall large amounts of money outside the bank’s control.
It will also stifle access to money used as ransom by terrorists and kidnappers. These kidnap-for-ransom gangs often demand huge sums, usually delivered to them in cash.
Emefiele pointed out that the currency in circulation had more than doubled since 2015, a “worrisome trend that cannot continue to be allowed.”
Authorities say now more than 85% of the total money in circulation is outside the vaults of banks.
But while some analysts praise the move — saying it could address excessive flow and stashing of cash ahead of the elections next February — others, like economic expert Emeka Okengu, say it is ill-timed.
Okengu argued that, “You don’t stop counterfeiting by changing the currency, you do so by finding those involved and getting them arrested. This is not the time. Eighty percent of Nigeria is under water both economically and financially.” He pointed out that the change was too close to the general elections and that, “If they waited for twenty years, nothing stops them from waiting another six months.”
Security expert Senator Iroegbu also questioned the decision.
“The reason they gave on the surface sounds genuine,” Iroegbu told VOA, “But when you look at it holistically you begin to ask questions. How practical is this and why now? Most times they always cite insecurity. What is the benefit of such exercise on security? This policy will only affect the poor masses.”