Ex-CBN Chief hails Emefiele over Naira redesigning, says it’s a necessary step for economy

A former Deputy Governor of the Central Bank of Nigeria (CBN), Dr Kingsley Moghalu, has thrown his weight behind  the apex bank’s decision to redesign the Naira notes, describing it as a necessary step for the good of the economy.

By the policy, he said the CBN was trying to gain control of the money supply in the economy.

Moghalu stated this in a series of tweets he posted on his Twitter account on Friday.

“I fully support the Central Bank’s redesign of the Naira. If 80% of bank notes in circulation are outside the banks that is troubling.

“The CBN obviously wants to force all those notes back into the banking system. Those with the notes must surrender to get new ones or else it becomes illegal tender after January 31 2023,” he tweeted.

Persecondnews reports that barely 48 hours after the Governor of Central Bank of Nigeria, Godwin Emefiele announced that the apex bank would redesign the country’s currency and released them into circulation on December 15, 2022, the Minister of Finance, Budget and National Planning , Mrs Zainab Ahmad, said she was not consulted.

Disowning the policy, Ahmad said if implemented, it would portend great consequences for the nation and its economy.

She was answering a question posed  by Sen. Opeyemi Bamidele, during the 2023 budget defence session on Friday.

Moghalu also rationalized: “This is also a way to withdraw currency from circulation, an unorthodox way of tightening the money supply since the country is battling high inflation.

“The flip side is that people who are holding huge amounts of cash outside the banking system for nefarious reasons will go the parallel forex market to buy hard currency, putting further downward pressure on the value of the Naira as too much Naira will be chasing too few dollars.

“I doubt it will solve inflation because there also are other major reasons for inflation such as the forex crisis, which this new move could exacerbate, as well the impact of the security crisis on food price inflation. But overall it is a necessary step.

“I just think the time window for its implementation is rather short. This will put a lot of operational pressure on commercial banks and the financial system in general.

” A 90-day window would have been better, but one can understand the need to avoid interfering with the elections.”