Effectiveness of the Central Bank of Nigeria’s (CBN) Communication Strategy on Public Perception of the Naira Redesign Policy
Abstract
This study aimed to evaluate the effectiveness of the Central Bank of Nigeria’s (CBN) communication strategy on the public perception of the Naira redesign policy. A quantitative survey design was adopted, and a structured questionnaire was designed to survey a sample of 120 respondents. The data collected were presented and analyzed using SPSS26, and hypotheses were tested using the t-test. The main findings of the study revealed varying perceptions regarding the clarity and comprehensibility of the CBN’s communication materials related to the Naira redesign policy. While a small proportion of respondents considered the materials very clear and comprehensible, a significant portion expressed that the materials were not clear and comprehensible. Additionally, the study found that there was a considerable proportion of the general public with limited awareness and understanding of the Naira redesign policy. Furthermore, the findings indicated diverse public perceptions regarding the benefits and challenges associated with the policy, with a significant negative perception observed. The study also identified anticipated challenges, such as printing and distribution challenges and resistance from the public. The study highlighted the need for improved clarity and effectiveness of the communication materials related to the Naira redesign policy to ensure better understanding among the public. It also emphasized the importance of increasing awareness and understanding of the policy among the general public through targeted awareness campaigns and educational initiatives. Moreover, the study revealed the limited influence of the CBN’s communication strategy on public trust and confidence in the policy, suggesting the need to revisit and refine the communication strategy to address public concerns and enhance confidence. Based on the findings, several recommendations can be made. It is recommended that policymakers and the CBN invest in improving the clarity of communication materials and develop targeted awareness campaigns to enhance public understanding of the Naira redesign policy. Additionally, there is a need to address public concerns and misconceptions through effective communication strategies. Policymakers should consider the diverse perceptions and anticipated challenges associated with the policy when implementing it.
CHAPTER ONE
GENERAL INTRODUCTION
INTRODUCTION
The Central Bank of Nigeria (CBN) plays a crucial role in the Nigerian economy, particularly in the formulation and implementation of monetary policies. One of the recent initiatives undertaken by the CBN is the Naira redesign policy aimed at enhancing the security features and aesthetics of the national currency. However, the success of such a policy not only relies on its implementation but also on how effectively it is communicated to the public. This study aims to investigate the effectiveness of the CBN’s communication strategy on the public perception of the Naira redesign policy.
Throughout its history, Nigeria has witnessed the introduction and circulation of various currency units, often in response to prevailing political and economic circumstances (Ejikonye, 2022). In November 2022, the Central Bank of Nigeria (CBN) decided to redesign the country’s currency notes, specifically the Naira. This move generated substantial media coverage and captured public interest. This study aims to delve into the framing of news articles in selected Nigerian newspapers to understand how media coverage influenced the public’s perception of the currency redesign and the motives behind it as perceived by the CBN.
Nigeria’s currency has undergone several changes in the past, with new units being introduced in line with the political and economic climate of the time (Ejikonye, 2022). For instance, the introduction of the first set of British Coins in the country through the 1880 ordinance featured the 1-shilling Coin as the highest denomination. Subsequently, the 2-shilling Coin became the highest denomination in 1913, followed by the introduction of the 10-shilling Coin and £5 note in 1919 (Chukwu, 2010). These currency units were likely designed to cater to the political and economic needs of those periods.
Problem Statement and Rationale
Effective communication is essential for any policy to achieve its intended goals. In the case of the Naira redesign policy, the CBN needs to ensure that the public understands the rationale behind the policy, its benefits, and any potential inconveniences. The public’s perception of the policy can significantly influence its acceptance and success. If the CBN’s communication strategy is ineffective, it may lead to confusion, resistance, and even a lack of trust in the policy.
Recent literature suggests that communication strategies employed by central banks have a considerable impact on public perception. For example, a study by Johnson (2021) on the communication strategies of central banks found that effective communication can enhance public trust, increase policy credibility, and improve economic outcomes. Therefore, understanding the effectiveness of the CBN’s communication strategy concerning the Naira redesign policy is crucial for policymakers, as it can inform future policy decisions and communication efforts.
Objectives of The Study
The main objective of this study is to assess the effectiveness of the CBN’s communication strategy on the public perception of the Naira redesign policy. Specifically, the study aims to:
- Evaluate the clarity and comprehensibility of the CBN’s communication materials related to the Naira redesign policy.
- Assess the level of awareness and understanding of the Naira redesign policy among the general public.
- Examine the public’s perception of the benefits and potential challenges associated with the Naira redesign policy.
- Investigate the influence of the CBN’s communication strategy on public trust and confidence in the policy.
Research Questions
- How clear and comprehensible are the Central Bank of Nigeria’s (CBN) communication materials regarding the Naira redesign policy, as perceived by the general public?
- What is the level of awareness and understanding of the Naira redesign policy among the general public, and how does it vary across different demographic groups?
- How do the public perceive the benefits and potential challenges associated with the Naira redesign policy, and are there any significant differences in perception based on demographic factors?
- To what extent does the CBN’s communication strategy influence the public’s trust and confidence in the Naira redesign policy, and how does this perception vary across different segments of the population?
Research Hypotheses
The following hypotheses were tested in this study:
- Null hypothesis: There is no significant difference in the clarity and comprehensibility ratings of the CBN’s communication materials related to the Naira redesign policy among different demographic groups. Alternative hypothesis: There is a significant difference in the clarity and comprehensibility ratings of the CBN’s communication materials related to the Naira redesign policy among different demographic groups.
- Null hypothesis: There is no significant relationship between the level of awareness and understanding of the Naira redesign policy and demographic factors. Alternative hypothesis: There is a significant relationship between the level of awareness and understanding of the Naira redesign policy and demographic factors.
- Null hypothesis: There is no significant difference in the perception of benefits and potential challenges associated with the Naira redesign policy among different demographic groups. Alternative hypothesis: There is a significant difference in the perception of benefits and potential challenges associated with the Naira redesign policy among different demographic groups.
- Null hypothesis: The CBN’s communication strategy does not significantly influence the public’s trust and confidence in the Naira redesign policy. Alternative hypothesis: The CBN’s communication strategy significantly influences the public’s trust and confidence in the Naira redesign policy.
Importance of The Study
Understanding the effectiveness of the CBN’s communication strategy on the public perception of the Naira redesign policy has significant implications for monetary policy formulation and implementation. A successful policy requires not only sound technical considerations but also effective communication to ensure its acceptance and support from the public.
The findings of this study will provide valuable insights for policymakers, central banks, and communication professionals on how to improve communication strategies related to monetary policies. It will also contribute to the existing literature on central bank communication, particularly in the context of developing economies like Nigeria.
Limitations of The Study
While this study aims to provide insights into the effectiveness of the CBN’s communication strategy on the public perception of the Naira redesign policy, certain limitations need to be acknowledged. These limitations include:
Availability of data: The study relies on available data, including official publications, surveys, and existing literature. The accuracy and completeness of these sources may vary, which could potentially impact the study’s findings.
Generalizability: The study focuses on the Nigerian context and may not be directly applicable to other countries or central banks. The effectiveness of communication strategies can be influenced by various factors specific to each country or region.
Time constraints: The study has a specific time frame, and the analysis is based on the available literature up until 2022. More recent developments and changes in the CBN’s communication strategy may not be fully captured in this study.
Methodological limitations: The study adopts a quantitative approach, relying on surveys and content analysis. While these methods provide valuable insights, they also have inherent limitations, such as potential biases in survey responses or subjectivity in content analysis.
Despite these limitations, this study seeks to contribute to the existing body of knowledge on central bank communication and its impact on public perception. The findings will provide valuable guidance for policymakers and communication professionals in improving the effectiveness of communication strategies related to monetary policies in Nigeria.
REFERENCES
- Pillah, A. 2023, ‘Impact of Currency Redesign on Cashless Transactions: A Case Study of Nigeria’, International Journal of Finance and Economics, vol. 35, no. 3, pp. 189-205.
- Rostow, W. W. 1970, ‘Currency Design and Economic Development’, Journal of Development Studies, vol. 6, no. 2, pp. 189-202.
- The Guardian 2022, ‘Nigeria’s 1 Naira, 5 Naira and 10 Naira Notes’, Retrieved from https://guardian.ng/business-services/nigerias-1-naira-5-naira-and-10-naira-notes/.
- Tribune 2022, ‘CBN to Introduce New Currency Design, Redenominate Naira’, Retrieved from https://tribuneonlineng.com/cbn-to-introduce-new-currency-design-redenominate-naira/.
- Yusuf, A. M., & Olayiwola, K. F. 2021, ‘Electronic banking adoption and financial inclusion in Nigeria: A survey of bank customers’, European Journal of Economics, Finance and Administrative Sciences, vol. 3, no. 1, pp. 102-116.
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