Kingsley Moghalu, a former candidate for president of the African Democratic Congress, has said that changing the look of the naira notes might not stop inflation in Nigeria.
Moghalu said that making changes to the naira notes could make Nigeria’s currency crisis worse.
In a series of tweets, the former presidential candidate, on the other hand, backed the Central Bank of Nigeria’s (CBN) plan to change the look of the naira.
Moghalu said it is worrying that 80% of the Nigerian money in circulation is not in banks.
He said that the top bank must be determined to get these notes back into the banking system.
He wrote in a tweet, “I fully support @cenbank’s plan to change the Naira. If 80% of the banknotes in circulation are not in banks, that’s a big problem. The CBN wants to make sure that all of those notes go back into the banking system. People who have the notes must turn them in to get new ones. If they don’t, they won’t be able to use them after January 31, 2023.
“This is also a way to take money out of circulation, which is an unusual way to reduce the money supply in a country with high inflation. On the other hand, people with bad intentions who have a lot of cash outside of the banking system will go to the parallel forex market to buy hard currency. This will drive down the value of the Naira even more because too many Naira will be used to buy too few dollars.
“I don’t think it will solve inflation because there are other big reasons for it, like the currency crisis, which this new move could make worse, and the effect of the security crisis on food prices. But it is a step that needs to be taken.
“I just think there isn’t much time for it to be put into place. This will make it hard for commercial banks and the financial system as a whole to do their jobs. It would have been better to have 90 days, but I can see why they didn’t want to mess with the elections.