The Governor of the Central Bank of Nigeria, Godwin Emefiele, has said that the payment of ransom to kidnappers and criminal elements will be difficult once it introduces the new naira notes.
AMBusiness reported that the apex bank on Wednesday announced the plan to redesign the N200, N500, and N1,000 notes by December 15.
The policy change is promoted as a means to bring currency from outside the banking system into the banking system, making monetary policy more effective in combating inflation.
However, the following are some of the direct and indirect reasons given for the redesigning of these naira notes according to Nairametrics:
Emefiele cited the hoarding of significant banknotes as one of the reasons for the rebranding of the naira notes.
“Statistics show that 85% of the currency in circulation is outside the vaults of our commercial banks. Data indicates that N2.73 trillion out of the N3.23 trillion currency in circulation was outside the vaults of commercial banks across the country,” he said.
On the ease with which banknotes are being counterfeited, the CBN boss stated, “In recent years, the CBN has recorded significantly higher rates of counterfeiting, especially the high denominations of N500 and N1000 bank notes.”
Speaking further, Emefiele notes that the redesigning of the naira notes would make it tougher to pay ransom demands to terrorists and kidnappers.
In addition, Nigerians who deposit more than N150,000 in cash must pay a deposit fee. As a result, this is a viable means for the government to obtain quick cash.
The governor of the central bank urged Nigerians to deposit their Naira notes at their banks, noting that the deposit fee would be rescinded for transactions worth less than N150,000.
According to Emefiele, another reason for this move is that the currency’s redesign has been long overdue.
He stated, “our existing series of banknotes -the naira, has not been re-designed in the last 20 years. The bank reasonably determined to achieve the objective of its mandate as enshrined in Section 2B of the CBN act of 2007 to ensure a strong and effective legal tender.
“It is therefore no longer tenable to continue with business as usual especially given the continually evolving circumstances that could impede the optimal performance of our naira.
“Furthermore, we believe that the re-design of the currency will help deepen our drive to entrench a cashless economy, and a christ minting of our E-Naira will complement it.”
Politicians with significant cash hoards in preparation for the upcoming 2023 elections will be required to deposit their money on or before January 31st, 2023, or the money will no longer be legal tender.
Some may have questions to answer with Nigeria’s EFCC if they cannot explain the source of the money.
As a result, vote buying will be significantly more difficult in 2023, as politicians will most likely have to distribute cash before the end of January or rely on electronic transfers of money afterwards.
While they can still print new notes, Nairametrics believe the central bank will include features in the new notes that allow them to track the movement of money.