Naira Redesigned and Its Implications in Monetary Policy in Nigeria
Chapter One
Objective of the study
- To examine the historical context and motivations behind the redesign of the Nigerian Naira.
- To assess the technological advancements incorporated in the redesigned Naira and their effectiveness in mitigating counterfeiting risks and improving the durability and usability of the currency.
- To explore the implications of the Naira redesign for monetary policy in Nigeria.
CHAPTER TWO
REVIEWED OF RELATED LITERATURE
Cashless Policy in Nigeria
The history of Nigeria’s cashless policy dates back to the early 2000s when the Central Bank of Nigeria (CBN) recognised the need to modernise the country’s payment system and to become one of the top 20 economies by 2020, the Central Bank of Nigeria (CBN), under the leadership of Sanusi Lamido Sanusi in 2011, boldly stated that Nigeria would change to a cashless economy by January 2012. According to the ( Central Bank of Nigeria, CBN, 2012 ), the main reason for the policy was to reduce the amount of Naira Cash in circulation in the economy and encourage using electronic payment systems. The policy was not intended to eliminate cash transactions.
The cashless policy was officially introduced in 2012, starting with a pilot phase in Lagos State. The pilot phase was designed to test the feasibility and effectiveness of the policy before expanding it nationwide. During this phase, the CBN imposed cash handling charges on daily cash withdrawals and deposits that exceeded certain thresholds to discourage the use of cash. The pilot phase of the cashless policy was successful, and in 2013, the CBN announced the nationwide rollout of the policy. The objective of the cashless policy was to create a more efficient payment system, reduce the cost of cash management, and minimise the risks associated with cash transactions, such as theft and counterfeiting ( Obi, 2023 ).
Under the cashless policy, the CBN implemented several measures to encourage the adoption of electronic payment methods. These measures included the deployment of Point of Sale (POS) terminals across various businesses, promoting mobile and internet banking services, and developing of a robust payment infrastructure. To facilitate the adoption of electronic payments, the CBN also collaborated with commercial banks and other stakeholders to educate the public on the benefits and usage of electronic payment channels.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine Naira redesigned and it’s implications in Monetary policy in Nigeria. CBN, Lagos state form the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain Naira redesigned and it’s implications in Monetary policy in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing Naira redesigned and it’s implications in Monetary policy in Nigeria
Summary
This study was on Naira redesigned and it’s implications in Monetary policy in Nigeria. Three objectives were raised which included: To examine the historical context and motivations behind the redesign of the Nigerian Naira, to assess the technological advancements incorporated in the redesigned Naira and their effectiveness in mitigating counterfeiting risks and improving the durability and usability of the currency and to explore the implications of the Naira redesign for monetary policy in Nigeria. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from CBN, Lagos state. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
The redesign of the Nigerian Naira represents a multifaceted process influenced by historical, economic, technological, and socio-cultural factors. This study has examined the background of the Naira redesign and analyzed its implications for monetary policy in Nigeria. Through a comprehensive exploration of historical context, motivations, technological advancements, and socio-economic considerations, several key insights have emerged:
- Currency redesign initiatives, such as those undertaken for the Nigerian Naira, are essential for maintaining the integrity of the currency and combating counterfeiting threats. The incorporation of advanced security features and technological advancements plays a crucial role in enhancing the authenticity and durability of the currency, thereby fostering public trust and confidence in the financial system.
- The redesign of the Naira carries significant implications for monetary policy in Nigeria. Enhanced security features not only safeguard the integrity of the currency but also contribute to maintaining price stability, supporting economic development, and fostering a conducive environment for investment and growth.
- Currency redesign processes provide opportunities to reaffirm Nigeria’s national identity and cultural heritage through the visual representation of symbols, historical figures, and landmarks on currency notes. However, the selection of design elements requires careful consideration to ensure inclusivity, representation, and alignment with socio-cultural sensitivities.
Recommendations:
Based on the findings of this study, the following recommendations are proposed:
- The Central Bank of Nigeria (CBN) should continue to invest in research and development to enhance the security features of the Naira, leveraging technological advancements to stay ahead of counterfeiters and maintain the integrity of the currency.
- The CBN should strengthen collaboration with law enforcement agencies, financial institutions, and international partners to combat counterfeiting and illicit financial activities effectively. Additionally, transparent information sharing regarding currency redesign initiatives and security features can help raise public awareness and promote confidence in the currency.
- The CBN should engage stakeholders, including artists, historians, cultural experts, and the general public, in the currency design process to ensure representation, inclusivity, and cultural sensitivity. By soliciting input and feedback from diverse perspectives, the CBN can enhance the symbolic significance of the Naira and foster a sense of national pride and unity.
- The CBN should establish mechanisms for monitoring and evaluating the effectiveness of currency redesign initiatives in achieving their objectives, including assessing the prevalence of counterfeiting, measuring public perception and confidence in the currency, and tracking economic indicators related to price stability and economic development.
References
- Abubakar, Y. (2016). A History of Modern Currency in Former Sokoto Province. 19032015 Ph.D. History Thesis, Department of History, UDUS.
- Abubakar, Y. & Wuam, T. (2021). Nigeria’s Apex Bank: The Central Bank of Nigeria (CBN) [eds.] and its Major Role in the Nigerian Economy since 1958, Benue, Aboki Publishers.
- Adegboyega, A. (2022). CBN Amends Cash Withdrawal Policy: Raises Weekly Limits. Premium Times, December, 21
- Adejo, A. M. (2008). The Nigerian Civil War: Fourty Years After, What Lessons? Ibadan. Print Marks.
- Bello, A.Y. (2007). How Nigeria’s Currency evolved: Weekly Trust Newspaper, March 10-1
- CBN, (2010). President Jonathan Launches N50 Anniversary Note. Press Release, September, 29. [7]
- CBN (2016). The Rate of Counterfeiting Is Less Than One Per Cent. Press Release, 2016.
- CBN (2021a). Regulatory Guidelines on the e-Naira. A Publication of the Central Bank of Nigeria.
- CBN (2022). Issuance of New Naira Banknotes. Press Remarks by Godwin Emefiele, October 26.
- CBN (2023). On Progress of Implementation of New Redesigned Currency by the Central Bank of Nigeria. Press Statement by Godwin Emefiele, January, 29
