The launching of new 200, 500, and 1,000 naira notes is not an economic priority that the Central Bank of Nigeria (CBN) should consider. This is according to the Civil Society Legislative Advocacy Centre (CISLAC).
In a statement obtained by BizWatch Nigeria, the CBN Governor, Godwin Emefiele, identified the notes as -N200, N500, and N1,000, stating that they would all be launched on Thursday, December 15, 2022.
Highlighting why CBN is making the move to change the notes, Emefiele explained that “hoarding of banknotes by members of the public, with statistics showing that over 80 percent of currency in circulation are outside the vaults of commercial banks; Worsening shortage of clean and fit banknotes with the attendant negative perception of the CBN and increased risk to financial stability, and Increasing ease and risk of counterfeiting evidenced by several security reports.”
Reacting to the development, the Executive Director of CISLAC, Auwal Musa said there are more pressing needs that the CBN ought to attend to, to set the economy on the path of revival, adding that Nigerians’ concerned reactions to the announcement was proof that the decision is a misplaced priority on the part of the financial regulator.
According to Musa, CBN should be more concerned with protecting foreign exchange reserves from external outflows and making forex available to the ordinary citizens who genuinely and legitimately need it, adding that the huge blow to foreign direct investment was tantamount to the inability of the CBN to do its job effectively.
His words: “Firstly, the CBN’s decision to redesign and reissue new 200, 500 and 1000 notes is not an economic priority and barely a solution to addressing Nigeria’s poor monetary policy challenges and growing economic woes.
“Especially at a time when the country is grappling with huge fiscal deficits, a free fall of the naira, soaring inflation rates, multiple forex rates and rising borrowing costs. The reasons for this decision seem no different from those given for the forex demand management strategy which resulted in a non-satisfactory conclusion as the artificially low exchange rate failed to be as reflective of the market as possible to improve supply, but this time it only threatens damning economic consequences for Nigerians.
“The public perception that this decision holds no value proposition for the economy, reiterates the tendency of the CBN to be distracted from fulfilling priority statutory obligations.
“Various comments and responses from concerned Nigerians, show that a large number of Nigerians are worried about the misplacement of priorities of the Apex Bank to make such a decision that comes with possibly huge logistics costs and avoidable dislocations to small businesses, most of whom are in the informal sector.”
