Last updated on February 3rd, 2023 at 11:57 pm
On Monday, October 26, 2022, the Governor of the Central Bank of Nigeria, Godwin Emefiele, announced a redesign of NGN200, NGN500, and NGN1,000
In his first announcement, the apex bank boss stated that the redesigned banknotes would start circulating by December 15, but analysts say redesigning naira notes would have economic consequences, including putting pressure on small businesses.
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But Emefiele made a U-turn on the launch date on Tuesday, November 22, 2022, during the Monetary Policy Committee monthly meeting held in Abuja.
According to him, the new date for the launch of the redesigned naira notes will now hold November 23, 2022, to be unveiled by President Muhammadu Buhari
“100 days is enough for any person from any part of Nigeria to deposit his money in the bank…we are no longer waiting till December 15th to unveil and begin to release the new notes.”Emefiele
If you’re wondering what shape the new notes will take, here is everything you need to know about naira redesign
10 Main Reasons CBN Is Redesigning the Naira
Hundreds of Nigerians believe that the country has numerous challenges on its table than redesigning the currencies a few weeks before the 2023 general elections.
But the apex bank listed some of the rationales behind its actions are:
1) To increase the amount of naira in a bank vault, that is for proper management of the Nigerian currency
2) Currency management is one of the powers of the CBN as enshrined in Section 2 (b) of the CBN Act 2007.
3) To maintain the integrity of the Naira which is Nigeria’s local legal tender
4) To monitor the efficiency of the supply of naira in the market
5) To reduce to zero the hoarding of banknotes among Nigerians, especially among politicians, bandits, and drug barons who stockpile banknotes in their homes
According to Godwin Emefiele, “80 per cent of currency in circulation are outside the vaults of commercial banks”.
6) To reduce the rate of dirty and tattered naira notes in circulation.
7) To reduce the rate of counterfeiting or fake banknotes in circulation. According to the CBN, there are security reports that reveal that there are fake naira notes in circulation.
Emefiele confirmed that there is more counterfeiting of higher denominations like NGN500 and NGN1,000 notes in circulation than other denominations.
And less than a month the apex bank made the revelation, specifically on Sunday, November 13, 2022, a controversial Nigerian singer Habeeb Okikiola, popular by his stage name Portable revealed that a Nigerien man sprayed him fake NGN1,000 notes at a show in Port Harcourt, Rivers State.
He said in a short video clip: “Port Harcourt has caused trouble, you have sprayed me fake money, all the money is fake, Niger man spraying fake money, PH is this how to show love?”
8) The redesign of the naira is long-overdue. The global best practice is for central banks to redesign, produce and circulate new local legal tender every five to eight years, “Naira has not been redesigned in the last 20 years,” says Emefiele.
9) From an embezzlement and corruption perspective, the Chairman of the Economic and Financial Crimes Commission, Abdulrasheed Bawa, hinted redesign the naira is aimed at returning hidden public funds.
10) Redesigning the naira is another strategic way the apex bank monitors the financial system and Nigeria’s economy.
8 Major events that followed the announcement of Naira Redesign
The announcement of the redesign of the Nigerian currency may have received criticisms from major financial analysts which some of them described as a misplaced priority, but the announcement by the apex bank triggered some interesting events.
1) October 28: There was a verbal face-off between the Minister of Finance, Zainab Ahmed and the CBN boss Emefiele when she claimed she ought to have been consulted.
The finance minister was angry that her financial prowess was not sought by the CBN before announcing the redesign, but Emefiele lectured her that the CBN doesn’t need a consultation with the finance ministry.
2) November 5: The redesign announcement triggered the deposit of huge sums by the members of the public, especially those who hoarded the currency.
For instance, money that was minted more than a decade ago was seen being deposited at banks.
3) Currency hoarders stormed the parallel market to exchange their stockpiles with any of the globally-accepted currencies like USD, GBP, and EUR, thereby causing artificial scarcity of USD in the black market.
4) During the time of panic, USD/NGN, GBP/NGN and EUR/NGN reached a new high. $1 was exchanged for NGN850 in Lagos, NGN900 in Abuja.
5) For the first time, GBP/NGN crossed NGN1,000 for the first time in the history of foreign exchange, thereby further pushing down the value of naira against the USD.
Though the black market is no longer recognized by the CBN, it remains the most accessible to Nigerians who need forex to meet foreign obligations like paying schools fees, BTA etc
6) The announcement also triggered a rumour that the United States was planning to redesign dollars issued before 2021. But there was no such announcement by the U.S. Department of Treasury.
7) The apex bank activated a countdown plugin to naira redesign on its site
8) Nigeria’s anti-graft agency, the Economic and Financial Crimes Commission or EFCC raided Bureau De Change locations in Abuja and arrested some operators in the Federal Capital Territory (FCT).
What does the new redesign banknote mean?
As the redesign notes will be in circulation beginning from Wednesday, November 23, 2022, all Deposit Money Banks are expected immediately begin the return of existing notes back to the CBN
Nigerians are expected to begin returning the existing currency to their banks by depositing it into their bank accounts.
This also means that customers who deposit the existing banknotes into their bank accounts will be able to get the new (redesigned) banknotes after the launch by Buhari on November 23, 2022
All financial institutions have been directed by the CBN to open their branches from Monday to Saturday till the exercise last.
To motivate deposits from the general public, there will not be charged for cash deposits. This mean, no depositor will bear any charges for cash returned/paid into their accounts.
The present N200, N500, and N1,000 will remain legal tender and should not be rejected till January 31, 2023.
Will the Naira redesign affect my business?
You must also stop accepting the old N200, N500, and N1,000 notes from January 31, 2023.
If you abide by the guidelines set by the CBN, you have nothing to fear.
When will the redesigned naira be in circulation?
The redesigned naira notes will be in circulation beginning from Wednesday, November 23, 2022, and NOT December 15, 2022.
Has CBN changed the date of launch for naira redesign?
The initial launch of the redesigned naira notes was December 15, 2022, but on Tuesday, November 22, 2022, CBN governor revealed a new date has been chosen.
According to him, President Buhari would unveil the redesigned NGN200, NGN500, and NGN1,000 on Wednesday, November 23, 2022 in Abuja.
When will old N200, N500, and N1000 stop circulating?
By Tuesday, January 31, 2023, the old N200, N500, and N1,000 will cease to be legal tender. Its circulation will stop while the redesigned ones will take their places.
How much did Nigerians hoard the redesign of naira notes?
According to the CBN’s revelation, N2.73 trillion out of the N3.23 trillion currency in circulation as of September 2022 was either in private hands or was outside the vaults of commercial banks.
Redesigned naira can’t affect your business if you deposit the existing N200, N500, and N1,000 notes in your care to your bank account before the end of January 2023.