Naira To Be Re-Denominated

I hope govt will be able to tell market woman while she should sell her basket of garri she sold N250 yesterday N2.50k. I mean as result of our commodity price indiscipline, how can we ensure commodity price obey divide by 100 rule.

Were are all those economic students self 

will this improve the economy?
are accountants having problems with calculating the Naira as it is?
Is this to ease the weight of cash in our wallets?

as it is people hardly use the N1,N2 coins, Nigerians love huge currency and reducing the 'number' will be a psychological blow to some people 

Yup!


guardian

THANK YOU ALL FOR  THE COMMENTS.
I AM NEW GUY TO YOUR FORUM AND I IMPLORE YOU ALL
TO "JUST BELIEVE" WE SHALL GET TO THE PROMISE LAND.

THANKS

religion is the opium of the people, yeah

but i think it is high time we started taking practical, strategic and well thought out decisions.

its not about  faith or believe, its about reality.

its not  even neccesarily about getting to the promise land[wherever that is] it is about attaining economic relevance in the world.


anyways, oell, nice to meet ya.

There is no direct economic benefit to the move from the average Nigerian point of view, as a matter of fact for all intents and purposes the move became necessary because the African Union is thinking of having African Central Bank in Nigeria and thus Naira as the common currency. Thus their was need to make the exchange rate of Naira and those of other world recorgnised currencies reasonably comparable.

However if the move sails through and Naira becomes the common legal tender in the African region, it will do us more good in the foreign exchange market as their will be more demand for Naira and thus we will have a stronger currency.

But like some economists rightly pointed out that what improves a Nations's economy is local production and manpower development not the number of zeros in the currency. However I think the CBN under Soludo should be given a chance, when he talked about Bank Consolidation no one liked it cause it was a difficult decision but today we are all happy it happened.

While I can not prove scientifically that there is any benefit to this but I am out of hindsight tempted to think that its a good move. Cause I have seen the Naira go from bad to worse whenever a higher denomination was introduced, so when the reverse happens you can only expect a reverse effect.

Even in Britain (though not particularly sure) it looks like there is a Government regulation on High Street stores to put the value of products as £1.99, £2.99, £3.99
You begin to wonder why £1.99 and not £2. Because they want lower denominations of 1p, 10p, 20p, 50, to remain in circulation.
One can not explain the very essence of this, but their is sure a reason for it. Hence I am in total support of Professor C.C. Soludo.
 

Tell them jare!

[quote:]backnbetaThe best thing for those of abroad is for us to invest our hard earned money here o!
  Yet another failure!!!
if u want to invest your money abroad best of luck to you, i have been abroad for 15 years, i never see 1 million pounds in my account b4. the good thing when d money is at par with the dollar, is for u to invest in a developing economy, a growing economy rather than already saturated economies abroad. I went to an indian man house in west london, St John's Wood, one of the posh part of london, marble staircase. u name it, I asked this man how did u make your money, he told me, i made my money in nigeria in 1979, when N1.00 was $1.00.  He told me nigeria use to be sweet, if u invested $10,000.00 u could turn your money round over night, so i wish u best of luck with your investment abroad.

I have been going through responses to this issue with complete amazement.

In fact, it is very interesting that we can conduct this kind of discussion about such a very important decision of the CBN.  At least everyone is able to voice their opinion and hopefully we all learn more about the whole issue.

This is my opinion about the matter.

1.  It is a step in the right direction, though it is a risky adventure. Particularly, considering the cost and logistics involve in pulling this off, and I am still trying to convince myself if the 'anticipated' benefit can actually outweigh the cost and if some unforeseen issues won't scuttle the whole adventure.

2.  Contrary to what many people believe, there are actually some benefits to this step which include:

a.  Inflation control:  For example, items in Nigeria hardly jump from N1000 to N1014.  Under the new regime with the use of coin, such an item will cost N10 and can easily be N10.14k.  The point is prices of things change but the increment is actually tied to the currency denomination available.  Items can now change from 5k to 6k (that is N5 to N6 as of now which not possible, it will rather jump to N10).  This is a very positive development because with low inflation, you get a stable economy, with stable economy a lot of good can follows.

3.  Making Naira a reserve currency:  Though I am still contending about whether the only way to make Naira a reserve currency is by re-denomination.  Many of us will agree that Nigeria ecomomy is growing and Naira is getting stronger.  If this trend continue, the strength of naira can actually erode the value of our hard earned foreign reserve.  For example, if Naira is N50 to $1, getting N200 from our foreign reserve will require $4.  If naira become N40 to $1, we will then need $5 dollar to get the same N200. So this step give more value to what we do locally and make the country itself,  goods and services a good value for money in the international market.

4.  Compact Economy:  With manageable amount of currency in circulation, it actually enhance compact economy management on the part of the regulators, the effect of which definitely filter down to the other arms of the system in line with policy and decision of the economy regulators.  It is not just about removing two zeros.

5.  Improved Currency Span: Once we start using coins, life span of our currency will definitely increase reducing how much we spend on the long run on printing and replacing old notes.

6.  The Percieved Value & Strength:  Holding N1 coins definitely gives it more perceived value.  More like hold a pounds coins.  This psychological effect is good because it tends to equate N1 coin to N100 and actually help in achieving better purchasing power for the N1.

I believe there are economist out there who can analyse the issue in more detailed but this is my opinion.  

I so much embrace the idea if it will make naija better.
I font want to really argue about this but let it not be a move sponsored by all the bad eggs to loot more money abroad and thereby beating the money laundary laws.
With the money small in number but big in value, its easier to loot.
Abeg help remind them to still amend the money laundary laws.
   i really pray it works out if not! i tell una reall yawah don gas for naija ohh.

It has absolutely nothing to do with "fighting" the US dollar. In this thread, the main argument against this move appears to come from people who are used to changing pounds and dollars into large amounts of Naira.

@MacKren

because the world is not that simple.

If a mosquito sucks your blood and you get malaria, you can't simply get well by withdrawing blood from the same mosquito and injecting it back in your body.

If you drop a piece of burning coal on a bush and cause a wildfire, you can't just reverse things by picking up the same piece of burning coal. That is insane.



In the past 6 years, what the IMF has been doing is trying as hard as possible to chase away foreign investors from Nigeria.

1) they know that foreign investors like cheap labour, they made the government increase wages by 1,000%.

2) they know that foreign investors love cheap fuel, they made the government increase fuel prices by 300%.

3) they know that foreign investors like a weak currency, they're making the government strengthen the currency by 10,000%.

Can you imagine this policy hasn't even touched the ground yet and the BBC is already hailing it. When did the BBC ever celebrate anything good about Nigeria.


Nigerians have been idiots for long enough! Wetin sef?!!

Its a good idea, but the timing is dangerous.  This is another "Awolowo", for proposing a good idea at the wrong time.  

Does anybody know how the redenomination can improve our electricity and water supply that 95% of people living in Nigeria badly need?

Can we trust all the other governmental bodies to effectively implement this change?  I am just wondering how the local artisan will react or the bus conductor accepting N1 from you instead of the old N100. Chaos awaits at the local food market come 1st August 2008.

Can we tell CBN to shift the date to  1st August, 2009 thus allowing everybody (including companies) time for implementation.  One year is damn too short, this is Nigeria.

@Denex

-------------
If a mosquito sucks your blood and you get malaria, you can't simply get well by withdrawing blood from the same mosquito and injecting it back in your body.

If you drop a piece of burning coal on a bush and cause a wildfire, you can't just reverse things by picking up the same piece of burning coal. That is insane.
-------------

Its not the the blood the Mosquito sucked from you that gives you Malaria, its the Malaria parasite that it injected in your blood in the process.

Burning Coal?  Coal don't burn by itself.  It needs oxygen and heat (coal  is fuel).

What do I mean - Using the above example does not capture correctly what you are trying to put across.  Re-denominating the Naira is what CBN is talking about not re-valuing it.

when the N1,N2 coins were introduce, i'm sure the CBN said the same thing, goods will be priced N71, 66.50k and so on at the moment people don't do this, since they introduced it they should follow it up with 'pricing' ( i do not know if they are responsible for this though)


they just introduce the coins and N1000 early this year or last year citing the US model as well. the governor said something like if a cashless society like the USA can have $1000 bill i don't see any reason why we shouldn't'

This policy is bad O! May 1st 2008, let's massively protest against it O! I have told you people my own.

We are an export based country. A weak currency supports export. That is why China has refused to let it's Yuan rise against the dollar.


E bad O! E bad well, well!