IMPLICATIONS OF NAIRA REDESIGN ON THE FINANCIAL, ECONOMIC AND SECURITY SYSTEMS IN NIGERIA

Abstract

Currency redesign remains a part of monetary policy strategies of the Central Bank of Nigeria geared towards reaffirming the institution’s sovereignty and to curb specific financial infractions such as currency hoarding and counterfeiting, among others. This paper therefore examines the effects of the naira redesign on financial, economic and security systems in Nigeria. It employs primary data analyses drawn from structured questionnaires issued to various stakeholders such as professionals, banking public, artisans and SMEs, among others. The study found that naira redesign is effective in the containment of inflation, in asserting the sovereignty of the government’s monetary policy in curbing bribery and corruption, in controlling the activities of bandits and kidnappers and in controlling money supply. The paper therefore recommends among other things that the old and new notes (that is, ₦1000, ₦500 and ₦200) should remain legal tenders until the old stock is finally phased out. It also recommends that DMBs should expand the capacities of their e-platforms, make POS devices free to encourage better participation and avoid any future clash of naira redesign or reform activity with another national event.