'What we suffered' - How the naira redesign policy threatened Nigeria’s economy

On October 26, 2022, the former Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, jolted many Nigerians with a new policy announcement that would turn Nigeria on its head.

Emefiele, in a press conference, told Nigerians that the CBN was embarking on a currency redesign program, which he said aims to rein in excess cash outside the banking system.

Emefiele provides a reason for the naira redesign

The CBN emphasized that the introduction of the new naira designs serves the purpose of combating counterfeiting.

Additionally, the redesign aims to bolster the economy, diminish expenses related to cash management, foster financial inclusion, and amplify the CBN's oversight of the money supply.

Emefiele said: “Due to persistent challenges that are inundating currency management in Nigeria and undermining our sovereign integrity, the CBN conducted extensive in-house analysis and consultation which suggested the need for a policy to redesign some Nigerian banknotes.”

Emefiele said that the apex bank would redesign the N200, N500, and N1,000 notes and gave January 31, 2023, as the deadline to cease the circulation of old naira notes.

Nigerians’ rush for a few naira notes

The CBN likely did not anticipate the level of turmoil that was to emerge when formulating the plan to redesign the naira and mandate the depositing of old naira notes.

The decision by the CBN to withdraw old naira notes in favour of the newly redesigned currency, coupled with the implementation of a cashless policy, resulted in significant challenges for Nigerians, primarily due to the scarcity of the currency.

That was the beginning of chaos and near disaster threatening Nigeria’s economic well-being.

Many Nigerians began the frantic rush to return their old naira notes in exchange for the new ones.

And so began the infamous naira scarcity from January through April 2023 that brought the country to its knees.

Soon after, Nigerians, who found it hard to access cash, began queuing up in banks, ATM points, and, sometimes, sleeping at cash points just to lay their hands on a few naira notes.

Political motives involved

Politicians saw the move as targeting them and their political ambition. Emefiele accused Nigerian politicians of exploiting the situation.

He said: “The CBN has also noticed that some politicians are buying the new notes and storing them for political purposes.”