Introduction
There are different variables that can negatively affect a nation, some of which include but are not limited to Inflation, undiversified economy, low productivity, political instability etc. However, the Nigerian economy isn't absolutely free from the negative impact of these variables.
Nonetheless, we are also faced with other issues of concern which include fuel subsidy removal and redesign of the naira note. Although subsidy removal has created its own gap in the economy, I wouldn't be emphasizing on this as I intend to hammer more on the sequel of nara redesignation.
First, what is Naira redesignation? This calls for a change in the appearance of the naira note in the country. Relative to the above phenomenon in the country I would also love to define the word currency redesignation. This is a monetary economics philosophy with the emphasis of changing the physical or face value of a country's currency while maintaining its original worth in terms of exchange rate and purchasing power. Further, this is also made possible by reducing some of the zeroes in such currency.
However, the Nigerian economy is on the route of changing the design of its local currency which has no significant impact on the economy and masses in general from a personal point of view. Nonetheless, the major notes for redesign are: ₦100, ₦200, ₦500 and ₦1,000. Consequently, the demand should have been on the redenomination of our local currency rather than a redesign which has no significant impact on the masses.
The Naira redesign is a concept born by the immediate past administration led by President Muhammad Buhari. This call according to every economist in the country is of little importance but since it was predetermined by the executive, the CBN governor and other monetary bodies have no other word than a yes.
The newly designed Naira notes flooded into the Nigerian economy in January 2022, restricting the use of the old notes in major cities of the country based on most individuals' demand. However, after the 2023 general election, the old notes were also infiltrated into the country without a full withdrawal of the new note as the supreme court if the country ruled in favor of the old notes mandating it to be in use until December 31st 2023 and this has become an Achilles heel to the entire country as we keep absorbing its malignant shock which is also one of the reasons the past central bank governor Godwin Emefiele is in Economic And Financial Crime Commission (EFCC) custody. Nonetheless, let's observe the impact of the Naira redesign so far.
Aftermath of The Naira redesign in Nigeria.
The naira note redesign issue in no doubt had caused more harm than good in the country. The following are some of these issues as crystally elucidated.
Led to Inflation.
Inflation as we know is simply plenty of money going after a few goods. However, given the Inflation rate as of December 2022 at 21.34% this has been on the increase since January till date as the country's inflation rate if calculated using the current CPI is stipulated at 26.72%
Consequently, it is arguable although asserted by the CBN that the total money in circulation within the country is pegged at ₦2.60 trillion but this isn't true given to the fact that it wasn't all the old notes that was returned while the new note was simultaneously plunged back to the economy which finally led to this level of Inflation in the country.
It Led to Corruption.
It's really funny how the nation spent ₦58.6 billion according to google just to print ₦2.5 billion of the new note. However, the printing of the new note was nothing but an indictment of fraud into the monetary sector of the economy. Consequently, it is yet this issue that implicated the then CBN governor, Godwin Emefiele in the EFCC den which he's also been queried at the moment.
Death of Nigerians.
Given to the withdrawal of the old notes earlier this year, Nigerians were compelled to starve even while having your money in your account, you also aren't accessible to it given to the fact that most bank managers hijacked the system, maximizing for selfish interested as they have a limited number of money for the masses while providing politicians with millions of the new note. Nonetheless, given to the starvation and hunger within these periods, many Nigerians lost their lives in the course.
Possible Outbreak of Cancer.
Although the new note is still in circulation, it is not without fault as it was designed with inferior paper and chemicals that easily wash when pocketed. However, the chemicals used in the production of these new notes had a high tendency of degenerating to cancer when mixed with the bloodstream of people who usually pockets it.
Solution to the above issue.
The return or withdrawal of the old note is also scheduled to kick off from 31st of December 2023. It will be more devastating if there will be a repetition of what transpired from January 2023. Nonetheless, to avert further inflation, corruption and hunger in the country as a result of naira redesign and withdrawal, it is advisable to permit the already ₦2.60 trillion in circulation while holding back the rest of the withdrawn money from the economy.
On the other hand, more of the old notes could be printed and injected into the economy if there is the need for more supply of the domestic currency since the new note is cancerous.
Conclusion
The naira redesign and withdrawal issue was not a fair economic scenario issue in my country although we are yet to see the new government's action over the supreme court ruling on this issue as we look forward to December 31st.
Nonetheless, currency redenomination which has a better economic impact in an economy would have been chosen than the redesigning of the naira note which brought catastrophe to our domestic economy. Thank you for going through the state of the Nigerian nation regarding the effect of the naira redesign.