After President Muhammadu Buhari launches the newly redesigned Naira Notes at the State House, Abuja today and I saw the prototype, . . . the question that begs for answer is " is Nigeria government really serious about the prosperity and development of this nation ❔ we are practically a laughing stock to the outside world
Following yesterday’s disclosure by the Central Bank of Nigeria that the president would launch the new banknotes today. The notes are in the N200, N500, and N1000 denominations. . . . what was actually redesigned here? CBN can do better, a nation of over 200 million people, intellectuals abound.
Reason for redesign: He also reiterated the need for the redesign, noting that it was due to the higher rates of counterfeiting of N500 and N1,000 banknotes. . . . counterfeiting alone, where does exchange rate management stand, inflation, pricing control against demand and supply.
Governments directly and indirectly influence the way resources are used in the economy. A basic equation of national income accounting that measures the output of an economy- or gross domestic product (GDP)- according to expenditures helps show how this happens:
GDP C+1+G+ NX.
On the left side is GDP-the value of all final goods and services produced in the economy. On the right side are the sources of aggregate spending or demand-private consumption (C), private investment (), purchases of goods and services by the government (G), and exports minus imports (net exports, NX). This equation makes it evident that governments affect economic activity (GDP), controlling G directly and influencing C, I, and NX indirectly, through changes in taxes, transfers, and spending.
Fiscal policy that increases aggregate demand directly through an increase in government spending is typically called expansionary or "loose." By contrast, fiscal policy is often considered contractionary or "tight" if it reduces demand via lower spending.
On the other hand, Nigeria is battling a record-high inflation rate, partly attributed to the increased amount of money in circulation. According to data from the CBN, Nigeria’s broad money supply rose past the N50 trillion margin in October, which is the highest level on record.
Similarly, currency in circulation is stated at N3.29 trillion, increasing by over N855 billion between January and October 2022. This is an indication of currency hoarding which has kept monetary policies somewhat ineffective against the rising cost of goods and services.
What steps is CBN taking to curb hoarding of currency ❔ what legislation is in place ❔ what's the penalty involved, I thought we have finally gotten it right with the new slogan "redesign naira" CBN is surely not proactive but rather reactive in it role as policy maker in the money market and monitoring & control to the financial institutions.
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