Decision To Redesign Naira Is Positive For The Economy – Experts
Some financial experts have commended the Central Bank of Nigeria (CBN) for its decision to redesign the naira, saying that it would have a positive effect on the economy.
News Agency of Nigeria
The experts spoke in separate interviews with the News Agency of Nigeria (NAN) in Abuja on Thursday.
They spoke against the backdrop of the announcement by the CBN that new designs of the N200, N500, and N1,000 denominations would be produced and circulated on Dec. 15.
According to Prof. Uche0 Uwaleke, a financial economist and professor of capital market at the Nasarawa State University, Keffi, the decision will be positive for the economy in the medium to long term.
Uwaleke said the measure would go a long way to ensure that the naira in circulation outside the banking system was brought into the banking system.
He said the measure would also provide enough liquidity for banks and more money for the banks to lend.
“The measure does not amount to demonetization of big currency notes often carried out by central banks to curb black money and corruption.
“But it will go a long way in ensuring that a lot of naira notes circulating outside the banks are crowded in.
“If it leads to large deposits in banks, it means the banks will have more money to lend which may reduce interest rates.
“Perhaps more importantly, with increased currency in circulation now in the vault of banks, I expect to see improvement in monetary policy transmission,” he said.
Uwaleke said it might also have the effect of reducing speculative attacks on the naira in the parallel market in the medium term.
“I expect that the Financial Intelligence Unit will be on the lookout for huge deposits as a way of monitoring illegitimate transactions.
“Despite the huge cost involved in changing currency notes, I think it’s time to sanitize the system, especially now that electioneering activities have kicked off,” he said.
He, however, said the deadline of Jan. 31, 2023, was too short, considering the number of naira denominations involved, urging the CBN to consider extending it.
An economist, Dr. Tope Fasua, also said the measure would have a significant effect on the economy, adding that it was essentially about “black money.”
He suggested that the CBN should take such measures more frequently.
“When central banks do this, they try to pull in monies people are hiding; illegal money, corruption money, kidnapping money. Nigeria has managed to become a hub for these kinds of illegalities.
“I will even suggest that the CBN does this more often, maybe every 10 years. You will see a scenario where the banks are awash with liquidity.
“There are many people sitting on billions in naira, and even in dollars. The CBN should also see how it can pull in the dollars,” he said.
Fasua advised that the idea of individuals operating personal domiciliary bank accounts should be banned, adding that nobody needed it.
“People are speculating against their own currency in their own country. That is not allowed in any economy.
“They should pull in illegal, black naira and then see how they can pull in illegal dollars. The CBN can control these things through the Deposit Money Banks,” he said.
However, Mr. Okechukwu Unegbu, a financial expert, and past President of the Chattered Institute of Bankers of Nigeria (CIBN) said redesigning the naira was not the most important problem facing the economy.
Unegbu said the apex bank should have simply ensured that the scarce lower naira denominations, like N100 and N200, were readily available by printing more.
Follow Our Activities On Facebook
#BigBrotherNaija “Level Up” Week 6
Though last Sunday Sunday was meant to be a “no-eviction” day, it came as a shocker when fake housemate, Modella…
Dating in 2022; Situationships Are Not For The Fainthearted
Situationships are defined as that space between a defined relationship and something other than a friendship. It is a romantic…
20 Questions With Dinta Media’s Visual Storyteller, Chimeremogo Nwoke
Dinta Media is not really just a media production brand but we like to see ourselves as a hub for…
How Are Nigeria’s Small Businesses Coping?
The current rising rate of inflation and other burdens against the Nigerian economy speaks to the realities of the times.
Thrifting Is All The Rave Now, Here’s Why
By Amy Adindu The affordable clothing movement has gained global attention and acceptance as we’re all trying to look like…
#BigBrotherNaija “Level Up” Week 2
Week 2 of the highly watched Nigerian TV show kicked off with an early plot twist. On Sunday, Big Brother…
#BlueTunes: Burna Boy, Omah Lay Top Album Picks For July
July was a promising month for music lovers; from Lizzo’s album titled Special and Imagine Dragons’ Mercury, (Acts 1 &…
#BlueTunes Album Picks For June
Gbagada Express – Boj Bolaji Odojukan, popularly known as BOJ, was raised both in England and Nigeria. He shot to…
“A Creative’s Dream” with Jeff Chinonso
On the 26th of June 2022, Jeff Chinonso hosted his first solo art exhibition. The Augmented Reality exhibition themed “A…
Nigerian API-based company Thepeer raises $2.1 million
Tech infrastructure startup Thepeer has raised a $2.1 million seed round according to a report from TechCabal. Thepeer, a Nigerian…
Dika Ofoma, Ugochukwu Onuoha take on grief in Debut Film “The Way Things Happen”
The twenty-minute film focuses on the loss of a loved one, and how grief changes a person.
Nigerian Startups might just be Crippled by a Recently Leaked bill
Over the years there has been talks of amendment on the 2007 Act of the National Information & Technology Agency (NITDA).
Why We Love Kelechi Amadi Obi
The definition of talent is Kelechi Amadi’s iconic story. Imagine a person who studies law in school, gets called to Bar, and leaves it all for something different and unrelated…Painting!