Impact of Naira Redesign in Curbing Banditry in Nigeria
The main objective of the study is to examine the impact of naira redesign in curbing banditry in Nigeria. The specific objectives are:
- To evaluate the effectiveness of the Naira Redesign in reducing the incidence of banditry in Nigeria.
- To determine the level of public confidence in the security of the currency after the redesign.
- To assess the perception of the public on naira redesign impact on banditry
This chapter presents the literature review of the study. This is done under various subheadings that are classified under the conceptual review, theoretical review and the summary of literature reviewed.
History of Currency Introduction and Redesign in Nigeria
During the pre-colonial era, different cultures used a variety of items as means of exchange. These included cowries, manilas, beads, bottles and salt amongst others. The first major currency issue in Nigeria was undertaken following the colonial ordinance of 1880 which introduced the Shillings and Pence as the legal tender currency in British West Africa (Banuso, 2012). The units of coins managed by the Bank of England were one shilling, one penny, 1/2 penny and 1/10 penny and were distributed by a private bank, the Bank for British West Africa till 1912 (Onakoya, 2013).
From 1912 to 1959, the West African Currency Board (WACB) issued the first set of banknotes (insert hyperlink) and coins in Nigeria, Ghana, Sierra Leone and the Gambia. The highest banknote denomination was one pound, while the one shilling coin was the highest coin denomination (Collier, 2016).
On 1st July, 1959 the Central Bank of Nigeria (CBN) issued Nigerian currency banknotes, while the WACB-issued banknotes and coins were withdrawn. It was not until 1st July, 1962 that the currency was changed to reflect the country’s republican status. The banknotes which bore the inscription, ’FEDERATION OF NIGERIA‘, now had, ‘FEDERAL REPUBLIC OF NIGERIA’, inscribed at the top (Collier, 2016). The notes were again changed in 1968 following the misuse of the currency banknotes during the civil war.
Sequel to the decision by the government to change from the metric to decimal, the name of the Nigerian currency was changed in January, 1973. The major unit of currency which used to be £1 ceased to exist and the one naira which was equivalent to ten shillings became the major unit, while the minor unit was called the kobo; hundred of which made one naira (Shodeinde, 2018).
On 11th February 1977, a new banknote with the value of twenty naira (₦20) was issued. It was the highest denomination introduced at the time as a result of the growth of the economy; the preference for cash transactions and the need for convenience (Shodeinde, 2018).
The banknote was the first in Nigeria to bear the portrait of a prominent Nigerian citizen, the late Head of State, General Murtala Ramat Muhammed (1938-1976) who was the torch bearer of the Nigerian Revolution in July, 1975. The note was issued on the 1st anniversary of his assassination as a fitting tribute to a most illustrious son of Nigeria. He was declared a national hero on 1st October 1978 (Obikili, 2013).
On 2nd July, 1979, new currency banknotes of three denominations, namely ₦1, ₦5 and ₦10 were introduced. These notes were of the same size i.e. 151 X 78 mm as the ₦20 note issued on 11th February, 1977. In order to facilitate identification, distinctive colours were used for the various denominations (Nwali, 2016). The notes bore the portraits of three eminent Nigerians, who were declared national heroes on 1st October 1978. The engravings at the back of the notes reflected various cultural aspects of the country.
In April 1984, the colour of all the banknotes in circulation were changed with the exception of the 50 Kobo banknote to arrest the currency trafficking prevalent at the time. In 1991, the 50K and ₦1 were both coined (Nwali, 2016). In response to the expansion in economic activities and to facilitate an efficient payments system, the ₦100, ₦200, ₦500 and ₦1000 banknotes were introduced in December 1999, November 2000, April 2001 and October 2005 respectively.
On 28th February 2007, as part of the economic reforms, ₦20 was issued for the first time in a polymer substrate, while the ₦50, ₦10 and ₦5 banknotes; as well as ₦1 and 50K coins were reissued in new designs, and the ₦2 coin was introduced (Modebe, 2011).
On 30th September 2009 the redesigned ₦50, ₦10 and ₦5 banknotes were converted to polymer substrate following the successful performance of the ₦20 (polymer) banknote. Thus, all lower denomination banknotes were now printed in the polymer substrate (Abubakar, 2014). Finally, the CBN, as part of its contribution towards the celebration of the nation’s 50th anniversary of Nigeria’s Independence and 100 years of its existence as a nation, issued the ₦50 Commemorative polymer banknote on 29th September 2010; and the N100 Commemorative banknote on 19th December 2014 respectively.
Effects of adopting the policy of currency redesign on the Nigerian economy overtime
From the available statistic, prior to the introduction of the N20 naira note in 1973, the country was experiencing a high inflation rate which stood at 5.40% in 1973. Immediately after the introduction of this currency the country witnessed a drastic decrease in the rate of inflation. As at 1978, the inflation rate stood at 15.09% while in 1991 the inflation rate fell further to 13.01%, indicating a positive impact of such policy on the Nigerian economy (CBN, 2020). However, the inflation rate rose to 17.8%in 1999 which call for the introduction of new currency denomination since money is the measure of value. In October 1984, the currency was re-modified by coloring. At the end of that year the inflation rate stood at 17.86%, higher than previous years. Nevertheless, the rate fell to 5.72% in 1986 (Tade, 2022).
However, when the Structural Adjustment Programmed (SAP) was introduced same year and after the inflation rate doing this period. In 1988 and 1989 the inflation rate stood at 54.51% and 50.47% respectively. This called for another introduction of new currency denomination and as a result the N50 note was introduced in 1991 (Emeike, 2019). Unlike previous experience of the country, this policy did not yield a desirable result or the impact of this policy on the economy was not as expected. For after the introduction of the new currency, the inflation rate sky rocketed to 72.84% in 1995.
During the period 1992 to 1995, of around (57.08%-72.84%) the country experienced high inflation rate which has never occurred in the history of the country Three years after, the N100, N200 and N500 naira was introduced in November 1999, November 2000 and April 2001 respectively (Ofi, 2018). Immediately after the introduction of these currencies, the inflation rate which was single digit in 2000 (6.94) became double digit throughout the period 2001 to 2005.
This further attracted the adoption of policy restructuring in October 12, 2005 and this gave birth to the N1000 note or led to the introduction of the N1000 note. The resulting effect of this on inflation rate is that it turned into a single digit in 2006 and 2007 (8.24 and 5.36 respectively) (Ofi, 2018) but became double digit ever since, even between the period 2008, 2010 till date as shown in the below diagram which shows how inflationary induced the policy.
This chapter introduced the description of the adopted research methodology which was applied during the study. It unravels the research design, population of the study, sample population, research instruments, instrument validity, and instrument reliability.
This study will employ an explanatory research design to collect data on the analysis of the impact of naira redesign in curbing banditry in Nigeria. The explanatory research design is developed with the main purpose of investigating phenomenon which had not been studied before or has not been properly explained in previous studies (Borwankar, 2016). It is targeted towards providing details about where to discover small amount of information. The research design is adopted because it explains why phenomena occur and predict future occurrences around procurement management practice, and it will specify the nature and direction of the relationships between the variables in the study.
The target population of the study will consist of Nigerians inhabiting Lagos State. Burns and Grove (2019) claimed that targeted population as a collection of personalities which are eligible to participate in the enquiry. Population may also refer to an entire group of persons or elements that have at least one thing in common. Best and Tuckman (2014) agreed that, a population is any target group of individuals that has common characteristics that are of interest to the researcher.
DATA PRESENTATION AND ANALYSIS
This chapter is targeted at analyzing the data collected adopting a simple percentage and frequency presentation. The presentation is done in a tabular form for clarity and easy understanding. To get the research data, 100 questionnaires were distributed.
CONCLUSION AND RECOMMENDATIONS
The study aimed to assess the perception of the public on the impact of the Naira redesign on banditry in Nigeria. Through the administration of four research questionnaires using a four-point Likert scale, the study attempted to gauge the level of agreement or disagreement among the participants with regards to the effectiveness of the Naira redesign in reducing the incidence of banditry.
The results of the study revealed a mixed perception among the participants with regards to the impact of the Naira redesign on banditry. While some participants believed that the redesign had been effective in reducing the motivation of bandits to engage in their activities and made it more difficult for them to operate, others were not as convinced. The results also showed that some participants were confident in the security of the redesigned Naira notes, while others were not.
It is important to note that the perception of the public on the impact of the Naira redesign on banditry may be influenced by a variety of factors, including personal experiences, media coverage, and overall public perception. As such, it is recommended that further studies be conducted to obtain a more comprehensive understanding of the impact of the Naira redesign on banditry in Nigeria.
In conclusion, the study highlights the importance of regularly assessing the perception of the public on various initiatives and policies, as this information can be used to make informed decisions and improve outcomes. Additionally, it is crucial to continue the implementation of measures aimed at reducing the incidence of banditry in Nigeria, such as the redesign of the Naira notes, as well as other security measures aimed at protecting the public.
Based on the results of the study aimed at assessing the perception of the public on the impact of the Naira redesign on banditry in Nigeria, the following recommendations can be made:
Conduct further research: Given the mixed perception of the public on the impact of the Naira redesign on banditry, it is recommended that further research be conducted to obtain a more comprehensive understanding of the issue. This may involve conducting surveys with larger sample sizes and exploring other factors that may have influenced the perception of the participants.
Improve public education: To ensure that the public has accurate information and understands the security features of the redesigned Naira notes, it is recommended that efforts be made to improve public education and awareness on the issue. This may involve the use of various communication channels, such as the media, to educate the public on the security features of the Naira and how they can protect themselves against counterfeiting and banditry.
Enhance security measures: While the redesign of the Naira notes may have been an important step in reducing the incidence of banditry, it is recommended that other security measures be put in place to enhance the overall security of the currency. This may include the use of advanced technologies to detect counterfeit notes, as well as other measures aimed at reducing the motivation of bandits to engage in their activities.
Regularly assess public perception: The perception of the public on various initiatives and policies is important in understanding the impact and effectiveness of these initiatives. It is therefore recommended that regular assessments of public perception be conducted to obtain accurate information on the impact of the Naira redesign on banditry in Nigeria.
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