Cuteamigo1:
i love your last paragraph. the only thing we know how to do is to pray against our problems. imagine if young vibrant Nigerians have a platform to carryout a convention occasionally to discuss problems like this, am sure alot of solutions would have been generated but again the dinosaurs in power wouldn't have known how to implement it. i drop my pen here.

olamy223:
if this are the solution, then whey are you people causing buhari?

chikachike86:

Please explain further how export will exceed import if our borders is "fenced"

israelmao:


Would cashless policy erase current denominations or completely erase handling of cash?Would it also stop you from buying commodities at their price tags?Cashless policy can only reduce money laundering ,reduce cost of printing naira notes and ease cash movement or transfer.

Samleen:
*If government can stop the printing 500 NGN notes and 1,000 NGN notes and officially discontinue its use!

*Reintroduction of Nigeria coins, 50Kobo, 1 NGN and 2 NGN.



Welcome, lets get started by examinining the top 10 performing currencies in the world to gain necessary insights before drawing our conclusions.

*.Kuwait Dinar KWD:  (  1 KWD = 1201.9611 NGN  )
Bank notes: 1/4, 1/2, 1, 5, 10, 20 Dinars
Coins: 5, 10, 20, 50, 100, 200 Fils


*.Bahraini Dinar BHD: (  1 BHD = 956.3254 NGN   )
Bank note: BD 1/2, BD 1, BD 5, BD 10, BD 20
Coins: 5, 10, 25, 50, 100 Fils, BD 1/2


*.Omani Rial OMR: (  1 OMR = 936.2906 NGN  )
Bank note: 1/2, 1, 5, 10, 20, 50 Rials
Coin: 50, 10, 20, 50, 100 baisa and rarely used 200 biasa


*.Jordanian Dinar JDD:  (  1 JDD = 507,65070 NGN  )
Bank notes: 1, 5, 10, 20, 50, Dinars
Coins: 1/2, 1, quirsh, 21/2, 5, 10 Piastras


*.British Pound GBP:  (   1 GBP = 504.8154 NGN   )
Bank notes: €5, €10, €20, €50
Coins: 1P, 2P, 5P, 10P, 50P, €1, €2


*.Caymanian Dollar KYD:  (  1 KYD = 432.7622 NGN   )
Bank notes: 1, 5, 10, 25, 50, 100 Dollars
Coin: 1, 5, 10, 25 Cents


*.Euro EUR:  (  1 EUR = 448.2926 NGN  )
Bank notes: €5, €10, €20, €50, €100, €200 and  €500


*.Swiss Franc CHF:  (  1 CHF = 388.1395 NGN  )
Bank note: 10, 20, 50, 100, 200, 1000 francs
Coins: 5, 10 and 20 Rp/cts, 1/2, 1, 2 and 5 Fracs


*.United State Dollar USD: (  1 USD = 360.5000 NGN   )
Bank note: $1, $2, $5, $10, $20, $50, $100
Coins: 1C, 5C, 10C, $1/4, $1/2, $1.




Go back to the list once again and check what's the highest denominations of each currency (and population of users of each currency), You will discover that the top performing currency do not have high face value like we have 500 NGN and 1,000 NGN in Nigeria.

Also, you will notice that the top performing currencies have coins form of currency with denomination of very low face value.

The highest of the denominaton is 1000 Franc followed by 500 EUR. 1000 Franc is not in frequent use and the highest Franc denomination next to it is 200 Frank ( not like 500 NGN as we have here in nigeria ). Also the use of 500 EUR will discontinue this year 2018.

Get a hold on history of exchange rate in Nigerian, you will find out that every introduction of new high denomination currency note has averse advese effect on it.


Why High Denominational Currency Note Is Bad:
1. Increase in prints of currency notes with high face value e.g 1000 NGN makes other lower currency of less important and less usefull. This can gradually lead to upgrade of price of goods and services in market.

2. It makes stealing and loothing of cash easier as larger amount of money value can be packed into a very small space.

Why do CBN currently print more high denominational currency alone? Methink its in a bid to enhance hoarding of cash against the comming 2019 general election.

3. 500 NGN and 1000 NGN are no money for the common man, go to the market and examine what denomination are most in use.

4. It's in a way opposing the cashless policy by the federal government of Nigeria.


What The Wise Nations Did:
1. United State of Ameria used to have $500, $1000, $2000 currency notes until December 14, 1945, when the high denominational bills were last printed and officially discontinued on July 14, 1969 by the Federal Reserve System.

2. Europian Central Bank announced on 4 May, 2016 that it would phase out the 500 Euro notes by the end of 2018.



Other Factors That May Affect The Exchange Rate Of A Currency Include:
1. Ratio of goods/services importation to exportation

2. Availability of currency and number of complying users.

The Illegal illegal printing of currency by the CBN according to as reported by some news media outlets has a long way to desctroy value on our cash.

3. Inflation rate

4. Government debts and federal reserve.

5. Political policies and stability

6. And many more



My Recomendations:
Nigerian government should permanently discontinue and remove 500 NGN and 1,000 NGN currency notes from circulation. Reintroduction of 50 Kobo, 1 NGN and 2 NGN coins should also be done.

A serious government fighting corruption will yield to my advice as abundance of lower denomination currency will discourage looters from hoading and keeping cash in a safe instead of bank.

Caveat emptor:
This writeup is a personal opinion resulting from my many observations. It is not a scholarly work and should not be treated as one. Copy-and-paste bloggers should please reference the link and author of the article.

Okoyeebos:

Who is this potopoto slave tyPInG nonsense?

PietraK:


You are getting it wrong.

Cashless policy will make high denominations extinct. When you do not need to use cash to pay anymore. When almost all transactions including buying in the market is done electronically.

When Nigeria gets to that stage, there will be few high denomination of cash in circulation as most people will not have need of them. Why do I need cash if I can pay effortlessly electronically?

Making Naira equal to dollar can be achieved when our economy gets buoyant.... When we become a selling nation rather than a buying nation.

Thank you.

Okoyeebos:
Exactly 10 years ago, someone in the CBN wanted to do something similar but the economic blockheads ruling us frustrated it.

http://www.cbn.gov.ng/redenomination/newpolicy.asp

Ken4Christ:


1. Because of the way he his handling security issues especially that has to do with the herdsmen killings.

2. His corruption campaign is biased. Those in his cabinet are also very corrupt.

3 His economic policies are producing negative result evident in Naira going down against other currencies.

4. He has no plans to make our refineries work. This is what is eating up our foreign exchange.

olamy223:
(1) herdsmen killings started third quarter of 2017, people are already causing him before then, so that's not among the reason.
(2)we are Nigerians, ask a five year old what he will do if he mistakenly be a president At that age. corruption is in our DNA no matter who is in his cabinet
(3) yes, you are right.but all the solution you listed are buhari's economic policies. there's nothing you listed there that this govt is not doing,
(4) you might want to check this out again

seunlayi:


You can only find few worn out 100 naira notes in circulation now

Samleen:
*If government can stop the printing 500 NGN notes and 1,000 NGN notes and officially discontinue its use!

*Reintroduction of Nigeria coins, 50Kobo, 1 NGN and 2 NGN.

felucci:


You are getting it wrong. It seems you don't know much about Economics.
The printing of higher currency denominations did not cause devaluation of the Naira but it's a response by the CBN after the Naira lost value and it helped them to save money on printing the Naira. It would have been more costly to print N100 notes than the N1000 notes. If the govt stopped printing higher denominations, it won't improve the value of the Naira to make 1NGN equal 1 USD.

Also, re-introducing lower currency notes and coins won't make sense since the government would spend more money doing so on notes that are would rarely be used in a nation with a weak currency.

A fast way to make N1 equal 1 USD is to re-denominate it and that simply means by changing the value of say N1000 to equal N10 or something like that. New notes may have to be printed and they would have more value than the old notes. Soludo suggested something like that but many low IQ Nigerians didn't understand it.

After the re-denomination has been done, then it would make sense to reintroduce lower currencies just because they would have more use then and have more value.

EnkayDezign4:



we can't just devalue our currency with a non-performing economy and expect it to work. Naija needs an industrial revolution BADLY!

Even South Korea that has a very strong economy and manufactures and exports so many goods to the world, has never devalued it's currency.

*If government can stop the printing 500 NGN notes and 1,000 NGN notes and officially discontinue its use!

*Reintroduction of Nigeria coins, 50Kobo, 1 NGN and 2 NGN.



Welcome, lets get started by examinining the top 10 performing currencies in the world to gain necessary insights before drawing our conclusions.

*.Kuwait Dinar KWD:  (  1 KWD = 1201.9611 NGN  )
Bank notes: 1/4, 1/2, 1, 5, 10, 20 Dinars
Coins: 5, 10, 20, 50, 100, 200 Fils


*.Bahraini Dinar BHD: (  1 BHD = 956.3254 NGN   )
Bank note: BD 1/2, BD 1, BD 5, BD 10, BD 20
Coins: 5, 10, 25, 50, 100 Fils, BD 1/2


*.Omani Rial OMR: (  1 OMR = 936.2906 NGN  )
Bank note: 1/2, 1, 5, 10, 20, 50 Rials
Coin: 50, 10, 20, 50, 100 baisa and rarely used 200 biasa


*.Jordanian Dinar JDD:  (  1 JDD = 507,65070 NGN  )
Bank notes: 1, 5, 10, 20, 50, Dinars
Coins: 1/2, 1, quirsh, 21/2, 5, 10 Piastras


*.British Pound GBP:  (   1 GBP = 504.8154 NGN   )
Bank notes: €5, €10, €20, €50
Coins: 1P, 2P, 5P, 10P, 50P, €1, €2


*.Caymanian Dollar KYD:  (  1 KYD = 432.7622 NGN   )
Bank notes: 1, 5, 10, 25, 50, 100 Dollars
Coin: 1, 5, 10, 25 Cents


*.Euro EUR:  (  1 EUR = 448.2926 NGN  )
Bank notes: €5, €10, €20, €50, €100, €200 and  €500


*.Swiss Franc CHF:  (  1 CHF = 388.1395 NGN  )
Bank note: 10, 20, 50, 100, 200, 1000 francs
Coins: 5, 10 and 20 Rp/cts, 1/2, 1, 2 and 5 Fracs


*.United State Dollar USD: (  1 USD = 360.5000 NGN   )
Bank note: $1, $2, $5, $10, $20, $50, $100
Coins: 1C, 5C, 10C, $1/4, $1/2, $1.




Go back to the list once again and check what's the highest denominations of each currency (and population of users of each currency), You will discover that the top performing currency do not have high face value like we have 500 NGN and 1,000 NGN in Nigeria.

Also, you will notice that the top performing currencies have coins form of currency with denomination of very low face value.

The highest of the denominaton is 1000 Franc followed by 500 EUR. 1000 Franc is not in frequent use and the highest Franc denomination next to it is 200 Frank ( not like 500 NGN as we have here in nigeria ). Also the use of 500 EUR will discontinue this year 2018.

Get a hold on history of exchange rate in Nigerian, you will find out that every introduction of new high denomination currency note has averse advese effect on it.


Why High Denominational Currency Note Is Bad:
1. Increase in prints of currency notes with high face value e.g 1000 NGN makes other lower currency of less important and less usefull. This can gradually lead to upgrade of price of goods and services in market.

2. It makes stealing and loothing of cash easier as larger amount of money value can be packed into a very small space.

Why do CBN currently print more high denominational currency alone? Methink its in a bid to enhance hoarding of cash against the comming 2019 general election.

3. 500 NGN and 1000 NGN are no money for the common man, go to the market and examine what denomination are most in use.

4. It's in a way opposing the cashless policy by the federal government of Nigeria.


What The Wise Nations Did:
1. United State of Ameria used to have $500, $1000, $2000 currency notes until December 14, 1945, when the high denominational bills were last printed and officially discontinued on July 14, 1969 by the Federal Reserve System.

2. Europian Central Bank announced on 4 May, 2016 that it would phase out the 500 Euro notes by the end of 2018.



Other Factors That May Affect The Exchange Rate Of A Currency Include:
1. Ratio of goods/services importation to exportation

2. Availability of currency and number of complying users.

The Illegal illegal printing of currency by the CBN according to as reported by some news media outlets has a long way to desctroy value on our cash.

3. Inflation rate

4. Government debts and federal reserve.

5. Political policies and stability

6. And many more



My Recomendations:
Nigerian government should permanently discontinue and remove 500 NGN and 1,000 NGN currency notes from circulation. Reintroduction of 50 Kobo, 1 NGN and 2 NGN coins should also be done.

A serious government fighting corruption will yield to my advice as abundance of lower denomination currency will discourage looters from hoading and keeping cash in a safe instead of bank.

Caveat emptor:
This writeup is a personal opinion resulting from my many observations. It is not a scholarly work and should not be treated as one. Copy-and-paste bloggers should please reference the link and author of the article.

This is a very simple truth and need to be put into consideration.

Money is a value created in our mind and ascribe to currency notes and coins.

These currencies in themselves have no value except for the values we created in our mind for them.



Edited:
To those economics and financial Gurus calling me names and miscontruing my writeup, you are weldone!

Maybe you people need to read my write up again and consider what you wrote in your comments.

Everybody is contributing their opinion here to find a way forward for the Nigeria economy, some people are here derailing the thread with their You-are-not-an-expert comments.




Edited: You can also check this:

Update: 1 NGN to 1 USD Secret: Interesting Policy Proposed by CBN
https://www.nairaland.com/4355615/update-1-ngn-1-usd

Ken4Christ:


I do not agree. It will only limit looting but it will have no effect on the exchange rate. The countries you made references to didn't have a terrible economy like Nigeria does.

The major reason why out currency is low in values is because Nigeria is not a producing country. We import virtually everything.

If we want our currency value to appreciate, what we should do is;

1. Ensure all our refineries are working. It will save us lots of foreign exchange.

2. We need an industrial revolution.

3. We need to invest more in Agriculture.

4. Every local government chairman should be productive rather than administrative.

5. Corruption should be punished.

6. Our tax system should be made more effective.

7. Out railway should be developed to reduce cost of transportation of food items.

8. Our borders should be closed. If possible, fence the country round.

Export should exceed import if our currency must appreciate. After all these is done, then we can take away the high currency notes.