Nigerian central bank steps up plans to introduce newly designed Naira banknotes

On October 29, Nigeria’s central bank was forced to defend its controversial currency overhaul plans, just days after Nigeria’s Finance Minister Zainab Ahmad publicly questioned them. The central bank insists the move is overdue and urged Nigerians to “support the currency redesign project, which is in the general interest of all citizens of the country”.

Written approval by President Muhammadu Buhari

The Central Bank of Nigeria (CBN) has insisted that its recently announced plan to issue newly designed naira banknotes is legitimate and is 12 years overdue. In an apparent rebuke to Nigeria’s Finance Minister Zainab Ahmad, who publicly questioned the plan, the central bank said it had “obtained written approval from President Muhammadu Buhari to redesign it”.

Addressing lawmakers a day after the surprise CBN announcement, Ahmad reportedly said she had not been consulted and therefore could not comment “on the merits or not”. As News recently reported, CBN’s plan to introduce newly designed naira banknotes is believed to have caused the local currency’s parallel market exchange rate to drop, where it hit a new all-time low against the dollar. from N781: $1.

Opponents of the controversial CBN plan insist that going ahead with the change could see the naira to dollar exchange rate fall to 1,000 naira to the dollar by the end of January 31, 2023. However, in a defiant statement issued in October 29, 2022, CBN urged Nigerians to support currency redraw policy.

“The CBN urges Nigerians to support the currency redesign project, which is in the general interest of all citizens of the country. Hoarding significant amounts of banknotes outside commercial bank vaults should be discouraged by anyone with good intentions for the country,” the central bank said.

Currency redraws a global pattern

CBN added that it “took a long time considering he had to wait 20 years to carry out a redesign”. The statement also echoes the bank’s previous claims that the circulation of the redesigned naira is standard practice globally that must be carried out every five to eight years.

The planned injection of new 100, 200, 500 and 1,000 naira notes into circulation is scheduled to start on December 15th. Nigerians are expected to return the old banknotes by the end of January 2023. While critics of the currency redesign plan have urged the CBN to either extend the deadline or abandon the plan altogether, the latest local reports quote President Buhari expressing support.

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