Nigerians have challenged the central bank’s proposal to “redesign” the local currency of the nation in order to stop money laundering and large-scale hoarding outside of the banking system.
The new 200, 500, and 1,000 naira notes were unveiled by President Muhammadu Buhari on Wednesday. He said that “the new Naira banknotes have been fortified with security elements that make them harder to counterfeit.”
The new notes resemble the ones that are already in use quite a bit. The Central Bank of Nigeria’s headquarters and the nation’s coat of arms are still prominently displayed on the highest-value 1,000-naira note’s design. The color has changed from a primarily brown underprint to blue, which is the only discernible difference.
The Central Bank of Nigeria (CBN) says that the redesigned notes will replace notes currently in circulation by Jan. 2023.
But many locals are not impressed, describing the supposedly redesigned banknotes as a mere color revamp, given their similarities to the old notes.
“Snapchat filter, a waste of time and resources, so a whole CBN cannot employ experts to redesign the naira notes. This is a revamp not a redesign,” one Nigerian tweeted.
CNN has asked the CBN for comment.
Leading economist Bismarck Rewane tells CNN that changing the currency’s look adds nothing to its value and is insignificant in curbing counterfeiting.
The government says new security features were added to the new notes, but Rewane says the changes to the currency are not significant enough to curb counterfeiting.
Nigerian naira has been in a decline in recent years, falling to a record low on the black market where it traded at nearly 800 to the US dollar as of Friday.
“It doesn’t change anything,” Rewane says of the redesigning of the naira. “It doesn’t increase the value,” he also says, adding: “There was no redesign. The color of the currency changed that’s all. The change is not significant enough to stop counterfeiting.”
Nigeria’s 1000- and 500-naira denominations are the most counterfeited, according to the CBN’s annual report last year.
News of redesigning the naira — first announced last month — generated mixed feelings among Nigerians, some of whom questioned the cost of printing new banknotes at a time the country is grappling with dwindling oil revenues, its main source of income.
Central Bank Governor Godwin Emefiele expects the introduction of the new banknotes to help control inflation, which recently rose to its highest level in 17 years, and also fight corruption.
“It’s just a change in color. I cannot see the correlation between the color of the currency and the desired goals. If the goal is to reduce inflation, it will not achieve that. [Changing the look of the currency] has no macroeconomic impact whatsoever,” he tells CNN.
‘Overdue for a new look’
At the unveiling of the new notes on Wednesday President Buhari said it had been nearly 20 years since the country did a major redesign of its banknotes.
The Nigerian leader added that replacing the current currency with the redesigned notes will help to combat the hoarding of funds outside of the banking system.
“It is on this basis that I gave my approval for the redesign of the 200, 500, and 1,000 banknotes,” he said.
Old naira notes will be completely phased away by the end of January next year, the CBN says, as locals scramble to deposit their old notes at commercial banks.