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Nigeria must redenominate its voluminous Naira currency

Nigerian Naira The Nigerian Naira

Sun, 12 Sep 2021 Source: Rockson Adofo

For the attention of His Excellency the President of Nigeria, Alhaji Muhammadu Buhari, and his Economic and Finance Minister and the team of Economic advisors. Could you please give a critical analysis of the content of this publication? It is all about your national Naira currency.

The Naira currency as I knew it from 1980 to about the end of 1982, was robust and did worth more than the United States of America's dollar. It was about One Naira to US$1.50, if my memories will serve me right.

A loaf of bread that sold at 10 kobos (100 kobos=1 Naira) in the mentioned period, is now understood to be selling at about 370 Naira (₦370). How worthless and overly devalued the Nigerian currency has become. One American dollar (US$1) is now 411₦.

This publication is intended to address the volume of the nearly worthless naira notes in circulation in the country. My research indicates as follows, “The Nigerian naira (NGN, currency symbol ₦) can be broken into 100 kobos (k), which are smaller coin denominations. The coins in circulation today include 50k, 1 naira, and 2 Naira, while the banknotes run from 5 to 1000 Naira. The Central Bank of Nigeria (CBN), based in Abuja, issues the banknotes and coins.”

Surely, one will have to carry a bag full of Naira notes to purchase something that will be worth US$200 in Nigeria whereas his counterpart in America will carry a few notes able to fit into their wallet.

However, carrying too much money on you in bags poses a lot of risk to the carrier. Thieves, as they abound in Nigeria, will see that you are carrying money hence they can attack you to steal it.

But, if the money was too little able to fit into your wallet or inner pockets, it will not become too conspicuous to expose you to attacks by thieves. Not only that, it is inconvenient to carry such a volume of money on you.

Ghana under President John Agyekum Kufuor in the year 2000s saw the problems posed by the same quantity of worthless Ghanaian Cedi notes and coins in circulation in the Ghanaian economy.

Subsequently, he took a prudent economic measure to arrest the voluminous worthlessness of the Ghanaian Cedi currency. He decided on the redenomination of the Ghanaian Cedi currency to mask its worthlessness due to its volume.

Ten thousand Ghana Cedis (10,000 Cedis), were redenominated to become One Ghana Cedi (Ghs1). In those days, the Cedi was in denominations of One, Two, Five, Ten, Twenty, and Fifty (1, 2, 5, 10, 20, 50).

Now as I write, a bag of cement sells in Ghana for Ghs42 to Ghs50. Let’s take it that it sells at Ghs42. Multiply 42 by 10,000 and you get 420,000 Ghana old Cedis. How inconvenient it would be carrying 420,000 Cedis in its various denominations to go and buy one bag of cement let alone, intending to buy hundred bags of cement.

You will need two or more suitcases loaded with money to purchase 100 bags of cement in that pre-redenomination of the Ghana Cedis era. But now, you can just purchase one bag of cement or a hundred just carrying the money in your wallet or pockets.

President Buhari and Nigeria as a nation and people had better contact Ghana's former President John Agyekum Kufuor and his Economic wizards including now Vice President Dr. Mahamudu Bawumia, then Deputy Governor of Bank of Ghana, for all the good reasons they signed for the re-denomination of the Ghana Cedi currency.

Now, US$1 is equivalent to Ghs6. If we had not redenominated the Cedi, US$1 will be worth 60,000 Cedis. Former 10,000 Ghana Cedis and now One Ghana New Cedi (Ghs1) is said to have the same value hence a sensitizing advertisement preceding, during, and after the redenomination of the Cedi had it thus, “The Value is the Same.”

Nigerians should rescue their Naira through redenomination as Ghana did.

Ghana is the Black Star of continental Africa. It sets the pace for others to follow or emulate. Therefore, Nigeria should follow Ghana’s steps to put a deserving face to the Naira currency?

Whoever comes across this publication should please forward it to the attention of any Nigerian they know, most especially, to President Buhari and his government.

Columnist: Rockson Adofo