The Yoruba Youth Council on Saturday expressed support for the redesign of the Naira by the Central Bank of Nigeria, CBN.
In a statement by its President, Comrade Eric Oluwole, the Council, which is the umbrella body for all Yoruba youth organisations, said that the redesign will accelerate Nigeria’s migration into a cashless economy as happening in many countries across the globe.
He reeled out the advantages of the policy to include effective monetary policy, fighting corruption, and helping in the stabilisation of the galloping exchange rate.
Besides, Oluwole said that the cashless policy and redesigning will help to drastically reduce inflation, and engender free and fair elections “among other benefits that are far reaching that will help secure the future of our children and our youths.”
The Yoruba Youth Council President urged the CBN to orientate Nigerians about this development. He said that the people need to know the advantages of the policy in order not to cause confusion.
He said: “As I know vividly, the cashless policy being fully implemented by CBN is not new, as required steps in that direction were taken in 2012 with Lagos State as a pilot scheme and Abuja and some other six states in 2013.
“The cashless policy is about to drive development and modernization of our payment system in line with Nigeria’s Vision 2020 goal of being among the top 20 economies by the year 2020. An efficient and modern payment system positively correlates with economic development, and is a key enabler for economic growth.”
According to Oluwole, the cashless policy would reduce the cost of banking services (including cost of credit) and drive financial inclusion by providing more efficient transaction options and greater reach.
It will also improve the effectiveness of monetary policy in managing inflation and driving economic growth.
He said that the cashless policy would neutralise the dangers that high cash usage poses to the economy such as high costs associated with volume cash handling along the value chain; robberies and related crimes; loss in case of fire, flooding or other disastrous incidents; high subsidy; ineffective monetary policy in managing inflation; stifled economic growth; corruption; leakages; money laundering and fraud among others.
He noted that “There is a high cost of cash along the value chain – from the CBN and the banks, to corporations and traders; everyone bears the high costs associated with volume cash handling.”
On the high risk of using cash, he said carrying cash around encourages robberies and other cash-related crimes. He added that this also usually leads to financial loss in case of fire and flooding incidents.
Noting the issue of high subsidy, Oluwole said that CBN analysis showed that only 10 percent of daily banking transactions are above N150,000, which accounts for majority of the high value transactions; suggesting that the entire banking population subsidizes the costs that the tiny 10 percent incur in terms of high cash usage.
On the danger that carrying around raw cash poses to the informal economy, the Yoruba Youth Council’s President said that “high cash usage results in a lot of money being outside the formal economy, thus limiting the effectiveness of monetary policy in managing inflation and encouraging economic growth.”
As regards inefficiency and corruption, he said that high cash usage enables corruption, leakages and money laundering, among other cash-related fraudulent activities.
The Yoruba Youth Council’s position is in line with the reasons given for implementing the cashless policy and redesigning by the CBN Governor, Mr Godwin Emefiele, who, on October 26, announced that new notes would replace the current 200, 500, and 1,000 Naira denominations with effect from Thursday, December 15, 2022; while the existing notes would cease to be legal tender by January 31, 2023.
Emefiele had said that the redesign was to check currency fraud; deal a fatal blow to the growing worrisome kidnapping and ransom industry: reduce inflation and control the amount of money in circulation.
During the policy launching recently in Abuja, President Muhammadu Buhari had told Nigerians why he approved the redesign, assuring that: ‘the new Naira banknotes have been fortified with security features that make them difficult to counterfeit.’’
Also, he said that the new banknotes would help the CBN design and implement better monetary policy objectives apart from enriching the collective memory of Nigeria’s heritage.
He noted that it is about 20 years since the last major redesign of the country’s local currency contrary to the international best practice which requires central banks and national authorities to issue new or redesigned currency notes within every five to eight years.
‘‘A cycle of banknote redesign is generally aimed at achieving specific objectives, including but not limited to: improving security of banknotes, mitigating counterfeiting, preserving the collective national heritage, controlling currency in circulation, and reducing the overall cost of currency management.
‘‘In line with this power, the Central Bank Governor approached me earlier in this year to seek my permission to embark on a currency redesign project. I considered all the facts and reasons presented before me by the Central Bank.
‘‘There was an urgent need to take control of currency in circulation and to address the hoarding of Naira banknotes outside the banking system, the shortage of clean and fit banknotes in circulation, and the increase in counterfeiting of high-denomination Naira banknotes. It is on this basis that I gave my approval for the redesign of the ₦200, ₦500 and ₦1000 banknotes.
‘‘While this may not be apparent to many Nigerians, only four out of the 54 African countries print their currencies in their countries, and Nigeria is one. Hence, a majority of African countries print their currencies abroad and import them the way we import other goods.
‘‘That is why it is with immense pride that I announce to you that these redesigned currencies are locally produced right here in Nigeria by our Security Printing and Minting PLC.’’
In his remarks at the ceremony, the CBN Governor added that the redesign and cashless policy would control inflation, make policies more effective, ensure financial inclusion and fight corruption.
Emefiele said that the currency in circulation had been in usage for 19 years, with spiraling challenges on the economy, especially on security and others.
The Yoruba youths therefore support the cashless policy towards the development of our dear country Nigeria
