BREAKING NEWS : Nigerian currency to be redesigned, Billionaires and Millionaires to loss status
This is not like the previously redesigned Notes that almost crippled the economy but the proposed one is intended to enhance the economy and possibly reduce inflation.
According to the Central Bank of Nigeria, the new Strategy Agenda will re-evaluate the way Naira is being used by reducing the ratio of the naira to zero. What this means is that this present notes like N500 will be reduced to N5, why N50 will be reduced to 5Kobo.
The system is by dropping two zeros from the currency or moving two decimal places to the left. The name of the national currency will still be the Naira.
During the transition period, the existing Naira will be referred to as the “Old Naira”, and the new one to be called the “New Naira”.
After the transition period, the word “New” may be dropped. For example, the following equivalents will obtain as we re-denominate:
50 kobo Half kobo**
N 1 = 1 kobo coin
N 2 = 2 kobo coin
N 5 = 5 kobo coin
N 10 = 10 kobo coin
N 20 = 20 kobo coin
N 50 = 50 kobo coin or note
N 100 = N 1 note
N 200 N 2 note
N 500 = N 5 note
N 1000 = N 10 note
N 2000 = N 20 note
The ‘new Naira’ coins and notes will be different from the existing ones i.e. in design, appearance, security features, etc.
All Naira assets and liabilities (including bank deposits), prices, fees, rents, and contracts (including salaries and wages) will be re-denominated by dropping two zeroes or moving two decimal points to the left.
During the ‘transition period’ of 5 months, prices will be quoted in both the ‘new Naira’ and the ‘Old Naira’ and everyone will choose whether to pay in the new or old Naira.
These five months will be allowed so that everyone will get familiar with the conversion, and it will become self-evident to everyone why he/she would prefer to transact in the ‘new Naira’ rather than the ‘old Naira’.
For example, if a bag of garri sells for N2,000 (old Naira), the price in ‘new Naira’ will automatically be N20. The customer will choose to pay either N2000 in old Naira or N20 in the ‘new Naira’.
In the supermarkets and formal markets, prices will be displayed in both ‘old’ and ‘new’ Naira.
In the informal markets where prices are negotiated, the negotiation could be done in the ‘old Naira’ as usual and converted into the ‘new Naira’ if the customer wishes to pay with the ‘new Naira’. This will ensure that prices do not rise due to rounding-up.
The five months are also needed for everyone (formal and informal sectors) to become fully familiar with the conversion. It will become obvious to everyone that N50,000 of the ‘old Naira’ has the same purchasing power as N500 of the ‘new Naira’. The question then would be: why carry N50,000 of old Naira when N500 of the new Naira will buy you the same thing?
Consequently, if you have N50,000 in your bank account, it will automatically become N500 in the ‘new Naira’ i.e. if you want to withdraw in the ‘new Naira’ or you can still withdraw N50,000 in ‘old Naira’ during the transition period (January 2024).
Similarly, someone whose monthly salary is N50,000 can choose (during the transition period) whether to withdraw and spend the N50,000 in ‘old Naira’ or N500 in the ‘new Naira’. Both would buy him/her the same value of goods and services.
Examples of price equivalents in the new and old Naira could be:
House rent (e.g. a flat in some parts of Nigeria) N5000 per month will be N50 per month. Stock price of a company, assume it is, say:
N20 or N80 will go to 20 kobo or 80 kobo. Airline ticket for domestic flight of N12,500 = N125
Fuel Price N500 = N5 Exchange rate: N to US$ Assume it is say:
N125
Or N130
Or N100 to US$1.
N1.25 = US$1
Or N1.30 = US$1
Or N1 = US$1
This new directive is to start preparing ahead the minds of Nigerians, beginning from next year.
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