Abstract
This study examined the impact and benefit of the Naira redesign by Central Bank of Nigeria. Various issues have risen about the reason for the redesign policy implementation, making the subject matter a controversial issue. A quantitative research method was employed to gather and analyze data on the subject. The research made use of questionnaire in collecting data from the selected 145 respondents. The findings of the study indicated that although the naira redesign policy has its positive impact and benefit on the economy. The implementation of the policy was tagged ineffective by the selected respondents. Also, the study revealed that majority of the Nigerian public have an indifferent perception of the naira redesign by the Central Bank of Nigeria.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The Central Bank of Nigeria (CBN) recently undertook a redesign of the country’s national currency, the Naira. The primary goal of this redesign was to combat counterfeiting and enhance the security features of the currency. The CBN’s Naira redesign has garnered widespread interest, as it is a significant change for the country’s monetary system (Odior, 2022).
The impact of the CBN’s Naira redesign has been widely debated, with some arguing that it will lead to improved financial security and reduced counterfeiting, while others are concerned about the potential costs and challenges associated with the transition (Chijioke, 2022). The benefits of the redesign, on the other hand, are believed to include improved public confidence in the currency, a reduction in the number of fake notes in circulation, and enhanced security features that will make it more difficult for criminals to produce counterfeit notes (Odior, 2022).
In addition to these benefits, the CBN’s Naira redesign is also expected to provide a boost to the Nigerian economy. By reducing the number of fake notes in circulation, the redesign is expected to increase the trust and confidence that consumers have in the currency, leading to increased economic activity and a more stable financial system (Uchenna, 2020).
Despite the potential benefits, there have been concerns about the cost of the redesign and the challenges associated with transitioning to the new notes. Some have argued that the cost of the redesign will be passed on to consumers in the form of higher prices, while others are concerned about the potential confusion and inconvenience that may arise during the transition period (Dada, 2022).
Overall, the CBN’s Naira redesign represents a significant change for Nigeria’s monetary system, and its impact and benefits will likely be the subject of ongoing research and discussion. Currency redesigns can bring a number of benefits to countries (Uchenna, 2020). Firstly, the improved security features can make it more difficult for counterfeiters to produce fake notes, leading to a reduction in the amount of counterfeit currency in circulation.
This can increase public confidence in the currency and contribute to a more stable financial system. Additionally, by updating the design, central banks can make the currency more accessible to people with disabilities, which can help to increase financial inclusion (Adamu, 2021). A currency redesign can also reflect the cultural, historical, and political identity of a country, promoting national unity and pride. In conclusion, currency redesigns can bring a range of benefits, from increased security and public confidence to greater accessibility and the reflection of national identity (Odoko, 2020).
Currency redesigns are a common occurrence for many countries around the world, as central banks seek to improve the security features of their currency and prevent counterfeiting. The redesign of a currency can also reflect changes in a country’s political, social, or economic landscape, and can be used to make the currency more accessible to people with disabilities (Tobi, 2021). The impact and benefits of a currency redesign can vary depending on the specific goals and objectives of the central bank, but some common benefits include increased public confidence in the currency, reduced counterfeiting, and improved accessibility (Adamu, 2021).
Additionally, a currency redesign can reflect a country’s national identity and promote national unity and pride. While there can also be challenges associated with a currency redesign, such as the cost of transitioning to the new notes and potential confusion, the overall impact and benefits of a currency redesign can be significant for a country’s monetary system and economy (Tobi, 2021). The process of introducing a new currency design can be stressful for a central bank, as it involves coordinating a complex and time-sensitive operation. The central bank must ensure that the new notes are produced and distributed to banks and other financial institutions in a timely manner, while also withdrawing the old notes from circulation (Holden, 2019). This can be a challenging process, as it requires coordination with multiple stakeholders and can result in temporary shortages of cash in certain areas.
Additionally, there may be confusion among the public as they adjust to the new design, and businesses may incur additional costs as they update their cash handling systems to accommodate the new notes (Holden, 2019). Despite these challenges, the central bank must ensure a smooth transition to the new currency, as any disruptions to the monetary system can have negative consequences for the economy. Ultimately, the success of a currency redesign depends on careful planning and effective execution. the redesign of a currency is a significant event for a country, as it can bring a range of benefits to the monetary system and the economy (Cummings, 2018).
The Central Bank of Nigeria’s recent redesign of the Naira is a case in point, with the potential for improved security, reduced counterfeiting, increased accessibility, and a reflection of national identity. However, this process can also be challenging, requiring careful coordination and execution to minimize disruptions and ensure a smooth transition (Cummings, 2018).
The impact and benefits of the CBN’s Naira redesign will be of great interest to policymakers, economists, and the public, as they seek to understand the effects of this important monetary policy decision. The study of the impact and benefits of the CBN’s Naira redesign will provide valuable insights into the challenges and opportunities of currency redesigns, and will inform future policy decisions in this area.
1.2 Statement of the problem
The Central Bank of Nigeria’s recent redesign of the Naira has sparked significant interest and debate among policymakers, economists, and the public. While the redesign of a currency can bring a range of benefits to a country’s monetary system and economy, it can also pose significant challenges and risks. The purpose of this study is to examine the impact and benefits of the CBN’s Naira redesign, and to identify the challenges and opportunities associated with this policy decision. The impact and benefits of the Naira redesign are likely to be multi-faceted and wide-ranging, affecting various aspects of the monetary system and the economy
The redesign of a currency is not only about improving its security features and reducing counterfeiting. It can also have broader implications for a country’s financial system and economy. Another aspect of the redesign that should be taken into consideration is the cost. The process of introducing a new currency design can be expensive, as it involves the production and distribution of the new notes, as well as the withdrawal of the old notes from circulation. This can have significant fiscal implications, particularly for developing countries where resources may be limited.
Furthermore, the public’s perception of the new currency design is also important. While the central bank may aim to promote national unity and pride through the redesign, it is essential to ensure that the new design is well received by the public and does not evoke negative emotions or controversy.
In light of these complex issues, it is important to conduct a comprehensive study of the impact and benefits of the CBN’s Naira redesign. This study will provide valuable insights into the effects of currency redesigns and will inform future policy decisions in this area. The study will not only provide information on the impact and benefits of the Naira redesign, but it will also contribute to a better understanding of the broader implications of currency redesigns and the factors that should be taken into consideration when making this policy decision.
1.3 Research Objectives
The main objective of the research is to assess the impact and benefit of CBN new naira redesign in Nigeria, the study’s specific objectives are:
- To examine the effects of the Naira redesign on the level of counterfeiting in circulation.
- To evaluate the fiscal implications of the Naira redesign, including the costs of production and distribution, and the withdrawal of the old notes from circulation.
- To assess the public’s perception of the Naira redesign and its impact.
1.4 Research Questions
The research will be guided with the following research questions:
- What are the effects of the Naira redesign on the level of counterfeiting in circulation?
- What are the fiscal implications of the Naira redesign, including the costs of production and distribution, and the withdrawal of the old notes from circulation?
- What is the public’s perception of the Naira redesign and its impact on the economy?
1.5 Significance of the Study
The completing of the study will be significance in the opportunity to provide valuable insights and understanding into the effects of the Central Bank of Nigeria’s (CBN) Naira redesign. The study has the potential to contribute to the existing body of knowledge by analyzing the impact of the redesign on the Nigerian economy, its citizens, and the wider financial system. Additionally, the study could also provide recommendations for further improvements and inform future policy decisions.
By exploring the benefits and potential challenges of the Naira redesign, the study will provide important information for policymakers, businesses, and consumers. The findings of the study will be used to inform and guide future monetary policies, promote financial literacy, and support economic development in Nigeria.
In summary, the completion of this study can offer a comprehensive understanding of the impact of the CBN’s Naira redesign, making it a significant contribution to the field of economics and financial systems.
1.6 Scope of the Study
The research in assessing the impacts and benefits of the Naira redesign will focus on reports issued by the Central Bank of Nigeria before and after the implementation of the redesigning procedure. It will also focus on primary result through questionnaire report on the impact and benefits of naira redesign.
1.7 Operational Definition of Key Terms
Redesign: The term “redesign” refers to the process of making significant changes or improvements to something that already exists. In the context of currency, redesign refers to the process of making changes to a nation’s currency design, including its appearance, security features, and denomination structure.
Scarcity: Scarcity refers to the limited availability of a resource, product, or service relative to the demand for it.
Money in Circulation: “Money in circulation” refers to the total amount of money that is available in an economy, including physical currency and coins, as well as electronic forms of money such as checking and savings deposits held in banks.
Inflation: Inflation is a measure of the rate at which the general level of prices for goods and services is rising and, consequently, purchasing power is falling. In other words, inflation is a rise in the overall price level of goods and services in an economy over a period of time.
Perception: Perception refers to the way in which people interpret and understand sensory information from their environment. It encompasses the processes of attention, interpretation, and organization of sensory information to create meaning.
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