In a recent interactive session with the House of Representatives Committee on Banking and Currency, the Governor of the Central Bank of Nigeria, Lamido Sanusi, noted that if the plan to redesign naira notes last year was executed, “it would have made it impossible for counterfeiters to cook.” He further noted that best practice currency management is that “Within a period of 5 – 8 years, you redesign the currency, after which counterfeiters tend to catch up with you.” The question which we may need to ask, however, is whether counterfeiting or redesign is the most serious problem with our currency, particularly when Sanusi, himself, admits that “in terms of what we see as counterfeit in the processing of naira notes, the percentage, is very low?” Indeed, the claim that it is also best practice to redesign currency every five to seven years may not be supported by the relative longevity of currencies such as the pound sterling and the US dollar. In reality, the issues of unwieldy portability, the acrimony associated with a shortage of change for small transactions, the inflationary push associated with product pricing, the rapid deterioration of both paper and polymer notes because of their high turnover rate and ultimately the reduction in the naira’s purchasing power as a result of double-digit annual inflation rates, are also all significant challenges to the current naira profile.
Posted on: Mon, 05 Aug 2013 23:02:38 +0000
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