I can vividly remember the day the new naira notes were launched in Nigeria. It was the day I think I laughed the most recently. This was due to the numerous comments, videos, memes, and so many other creatives.
Many people believe the CBN’s action to be political, although the institution and others perceive it as an economic decision. The makeover, however, only applies to denominations like the N200, N500, and N1000 notes, according to the CBN. On or before January 31, 2023, the banknotes (old ones) that are now in circulation must be turned in to the banks or they would be considered expired money.
There were also various debates on the different group chats I belonged to on my social media platform on the impact of this new currency change. I also have my own comment but I will keep it to myself for now.
You will get to know what it is when you read this article to the very end. In this article, I share details on how the new naira notes affect our economy as written by some experts in the financial industry. Let’s hear what CBN thinks first.
CBN’s reasons for redesigning the naira note
Due to increased eNaira minting, the CBN thinks that the currency redesign will further our efforts to establish a cashless society. This will strengthen the banking system’s control over foreign currency, improving the effectiveness of the monetary policy.
The new Naira policy will aid in establishing confidence, an effective payments system, and macroeconomic stability which are crucial pillars of economic stability.
Given the short time frame, it is not surprising that the redesigning decision will cause economic disruption, prompt a rush to banks by the public to get rid of old notes and result in long lines at automated teller machines when the new notes are put into circulation.
Rural residents who live distant from banking facilities are worried that doing away with their old notes and initially getting their hands on the new ones will be difficult.
Many historically unbanked people are anticipated to join the banking system as a result of the upcoming experience, according to some financial analysts. This will in turn improve the banking sector and the economy at large.
How does it affect us as individuals?
It’s important to remember that a nation’s economy depends heavily on its currency. It decides factors like general price levels, total national revenue, output and productivity, levels of employment for labour and capital, and exchange rates. and the payment balance.
This new policy is bad for money stackers which also has its good sides because it will result in more cash flow in the economy. People that have stacked money both the ones they need and don’t need for a long time will start to take them to the bank or use them to purchase more items and this has a way of boosting the economy.
This new CBN policy appears to be influenced by politics as the general election of 2023 approaches. On the other side, some financial and political observers have stated that this action would thwart some political parties’ intention to utilize money kept in various private vaults around the nation to buy votes.
According to businesspost, the equitable distribution of money, properly controlled by our Central Bank, would play a vital part in achieving this. There is a need to expand and stabilize the country’s economy.
A policy should improve people’s lives, not make them worse. Although Nigerians have developed a thick skin about their circumstances over the years, the CBN must take into account the average Nigerian’s request for this new innovation.
Also, If accepting one more pill of suffering for this brief period would ensure a better future, we might as well accept it with a smile.