A viral message suggests that the Central Bank of Nigeria (CBN), under the directive of President Bola Ahmed Tinubu, plans to re-denominate the Naira by removing two zeroes or shifting two decimal points, accompanied by a transition period during which both old and new Naira would coexist.
How true is this claim?
In 2008, the CBN proposed a currency redenomination as part of the Financial System Strategy 2020 (FSS2020), aimed at transforming Nigeria into an international financial center and the primary hub of Africa’s financial system by 2020.
The proposed redenomination involved simplifying the currency system by removing two zeroes from the Naira or moving two decimal places to the left.
However, Nigeria’s then President Umaru Musa Yar’Adua ordered the suspension of the redenomination of the Naira.
The Governor of Anambra state Charles Soludo, who was Chairman of the CBN, said: “The board recognises and reaffirms Mr President’s authority in matters relating to the denomination of our national currency, as enshrined in Section 19 of the CBN Act 2007.”
The recent viral message appears to suggest that Nigeria might be considering a similar redenomination in 2023, possibly due to current economic challenges and high inflation levels.
According to the message, $1 would exchange for N1. 25 after the redenomination and during a five-month ‘transition period’, prices will be quoted in both the ‘new Naira’ and the ‘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’,” the viral message said.
While the principles mentioned in the message align with the objectives of the 2008 redenomination, there has not been an official announcement or confirmation from the CBN or the Nigerian government regarding a new redenomination in 2023 as described in the message.
Reacting to the viral report, the CBN in a statement on Wednesday said: “The Central Bank of Nigeria would like to bring to your attention that the attached message currently circulating on social media is false and should be disregarded.”
The claim that the CBN, under the directive of President Bola Ahmed Tinubu, is planning to re-denominate the Naira is false and should be disregarded by the public, as there is no credible information to support this claim.