CISLAC to CBN: Redesigning naira notes is not an economic priority

The Civil Society Legislative Advocacy Centre (CISLAC) says the decision by the Central Bank of Nigeria (CBN) to redesign some new naira notes is not an economic priority and will not solve the nation’s monetary policy challenges.

Auwal Ibrahim, executive director of CISLAC, made this known in a statement on Thursday.

CBN had said it redesigned the country’s currency notes of N200, N500 and N1000 — with circulation expected to begin in mid-December.

Ibrahim said redesigning the naira notes would hardly solve Nigeria’s poor monetary policies challenges.

He said comments on the change of banknotes showed a large chunk of Nigerians were concerned about the “misplacement of priorities” by the apex bank. 

“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,” he said.

“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.

“This is 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.”

So far, Ibrahim said the macro-economic and monetary policies of the CBN has “brought untold hardship” to the productive and service sectors of the country’s economy.

He added that policies had “consequential negative effects” on the lives of Nigerians.

“The apex bank has floated multiple exchange rate regimes and has been accused of facilitating arbitrage between the parallel and official foreign exchange markets, providing huge financial patronage and extending forex-based favours to allies,” Ibrahim said.

“Nigeria is grappling with the external pressures from the incapacity of the Central Bank of Nigeria (CBN) to protect foreign exchange reserves from external outflows.”

However, he said the CBN needs to put more efforts into recovering the confidence of the public by addressing its inability to ensure blockage of illicit financial flows (IFFs) as well as checkmating the use of financial systems to fund terrorism.

Ibrahim added that the bank needs to intensify collaborations with relevant anti-corruption agencies to check dubious charges by some commercial banks “who keep shortchanging poor Nigerians whose reducing disposable income is further worsened by growing inflation costs”.

TheCable had reported on the implications of bank’s decision here.