Central Bank of Nigeria (CBN), has been commended by a group known as the Yoruba Youth Council for the redesignation of the Naira.
In a statement by its President, Comrade Eric Oluwole, the Council, which is the umbrella body for all Yoruba youth organisations, said that the redesign will accelerate Nigeria’s migration into a cashless economy as happening in many countries across the globe.
He reeled out the advantages of the policy to include effective monetary policy: fighting corruption: and helping in the stabilisation of the galloping exchange rate.
Besides, Oluwole said that the cashless policy and redesigning will help to drastically reduce inflation, and engender free and fair elections “among other benefits that are far reaching that will help secure the future of our children and our youths.”
The Yoruba Youth Council President urged the CBN to orientate Nigerians about this development. He said that the people need to know the advantages of the policy in order not to cause confusion.
As I know vividly, the cashless policy being fully implemented by CBN is not new, as required steps in that direction, were taken in 2012 with Lagos State as a pilot scheme and Abuja and some other six states in 2013
The cashless policy is about to drive development and modernization of our payment system in line with Nigeria vision 2020 goal of being amongst the top 20 economies by the year 2020. An efficient and modern payment system is positively correlated with economic development, and is a key enabler for economic growth.To reduce the cost of banking services (including cost of credit) and drive financial inclusion by providing more efficient transaction options and greater reach.To improve the effectiveness of monetary policy in managing inflation and driving economic growth.
There is a high cost of cash along the value chain – from the CBN & the banks, to corporations and traders; everyone bears the high costs associated with volume cash handling.High risk of using cash: Cash encourages robberies and other cash-related crimes. It also can lead to financial loss in the case of fire and flooding incidents.The High subsidy: CBN analysis showed that only 10percent of daily banking transactions are above 150k, but the 10percent account for majority of the high value transactions. This suggests that the entire banking population subsidizes the costs that the tiny minority 10percent incur in terms of high cash usage.Informal Economy: High cash usage results in a lot of money outside the formal economy, thus limiting the effectiveness of monetary policy in managing inflation and encouraging economic growth.Inefficiency & Corruption: High cash usage enables corruption, leakages and money laundering, amongst other cash-related fraudulent activities.Content of the Cash policy
The Council’s position is in line with the reasons given for the cashless and redesigning by the CBN Governor, Mr Godwin Emefiele, who, on October 26, announced that new notes would replace the current 200, 500, and 1,000 Naira denominations with effect from Thursday, December 15, 2022; while the existing notes would cease to be legal tender by January 31, 2023.
Emefiele had said that the redesign was to check currency fraud; deal a fatal blow to the growing worrisome kidnapping and ransom industry: reduce inflation and control the amount of money in circulation.
During the policy launching recently in Abuja, President Muhammadu Buhari had told Nigerians why he approved the redesign, assuring that: ‘the new Naira banknotes have been fortified with security features that make them difficult to counterfeit.’’
Also, he said that the new banknotes would help the CBN design and implement better monetary policy objectives apart from enriching the collective memory of Nigeria’s heritage.
He noted that it is about 20 years since the last major redesign of the country’s local currency contrary to the international best practice which requires central banks and national authorities to issue new or redesigned currency notes within every five to eight years.
‘‘A cycle of banknote redesign is generally aimed at achieving specific objectives, including but not limited to: improving security of banknotes, mitigating counterfeiting, preserving the collective national heritage, controlling currency in circulation, and reducing the overall cost of currency management.
‘‘In line with this power, the Central Bank Governor approached me earlier in this year to seek my permission to embark on a currency redesign project. I considered all the facts and reasons presented before me by the Central Bank.
‘‘There was an urgent need to take control of currency in circulation and to address the hoarding of Naira banknotes outside the banking system, the shortage of clean and fit banknotes in circulation, and the increase in counterfeiting of high-denomination Naira banknotes. It is on this basis that I gave my approval for the redesign of the ₦200, ₦500 and ₦1000 banknotes.
‘‘While this may not be apparent to many Nigerians, only four out of the 54 African countries print their currencies in their countries, and Nigeria is one. Hence, a majority of African countries print their currencies abroad and import them the way we import other goods.
‘‘That is why it is with immense pride that I announce to you that these redesigned currencies are locally produced right here in Nigeria by our Security Printing and Minting PLC.’’
In his remarks at the ceremony, the CBN Governor added that the redesign and cashless policy would control inflation, make policies more effective, ensure financial inclusion and fight corruption.
Emefiele said that the currency in circulation had been in usage for 19 years, with spiraling challenges on the economy, especially on security and others.
The Yoruba youths therefore support the cashless policy towards the development of our dear country Nigeria
