The Effect of Naira Redesign in Reducing Kidnapping in Nigeria
Objective of the study
- To investigate the current state of kidnapping in Nigeria and its impact on the country’s economy and society.
- To examine the proposed naira redesign and its potential to reduce incidents of kidnapping by making it more difficult for kidnappers to demand ransom payments.
- To identify the specific features of the redesigned naira currency that would make it more secure and less susceptible to counterfeiting.
- To evaluate the effectiveness of the naira redesign in reducing kidnapping incidents and the perception of security among the public.
Redesigning new note
Currency redesign is an activity of a sovereign nation to either change or modify the existing currency in a country. This can be done for several reasons like; improving the security features of the new currency, reducing the money supply, reducing inflation, investigating incomes from nefarious sources and many other economic indicators that affect the financial status of a nation. The Central Bank of Nigeria (CBN) announced that the bank would release re-designed naira notes by December 15, 2022, while existing notes would cease to be regarded as legal tender by January 31, 2023. Through this policy, the apex bank aims to control the money supply, and inflation, as well as, curb counterfeit currency. Also, the apex bank noted that available data indicated that N2.73 trillion out of the N3.23 trillion currencies in circulation was outside the banking system and supposedly, held by members of the public. Historically, the re-design of the Naira started in the last 30 years. In 1973, the naira was changed from metric to decimal which precipitated the change from pounds to naira and kobo. In 1977, the highest denomination at the time, the 20 naira note was introduced. In 1979, the government minted the N1, N5, and N10 notes. In 1984, a similar reason in line with the recently announced CBN policy to issue new banknotes as regards ameliorating the rate of trafficking and counterfeiting precipitated the change of all banknote colours. During President Olusegun Obasanjo’s regime, the N100 was introduced to the economy for circulation in 1999, the N200 in the year 2000, the N500 in the year 2001, and the N1000 in the year 2005. On 30th September 2009 following the successful money supply and performance of the N20 (polymer) banknote, the CBN redesigned and converted the N50, N10 and N5 banknotes into a polymer substrate. Despite the various monetary policy measures and reasons for the re-design of the naira by the CBN, there were both positive and negative effects of the re-design. From a positive view, the re-design would enable the apex bank effectively control the liquidity in circulation, thus reducing inflationary pressure in the economy. Also, the policy may likely improve the security situation in the country as ransom payments may be aborted. In my opinion, the cost of redesigning the Naira is disproportionate to the expected benefits highlighted by the apex bank. Presently, Nigeria is experiencing a high fiscal deficit, high inflation, high unemployment, underemployment, high youth unemployment, and a slowing GDP. From the monetary policy perspective, global best practice demands that countries restructure their currencies every five to eight years. Thus, the re-design of the Naira by the apex bank is justifiable; it’s a crucial step towards ameliorating the large volumes of money in circulation outside the banking system, but the problem is more than just the redesign of the low confidence levels of Nigerians in the Naira. Furthermore, on November 23, 2022, President Muhammadu Buhari unveiled the new naira note redesign for N200, N500, and N1000. On the unveiling, the currency has a resemblance to the previous currency, the only difference is the colour change, and the expectation of the redesign is not appealing to the public. Due to these similarities in colours can cause a loss of funds during financial transactions in low power supply areas. More so, counterfeits will be highly circulated in the economy because the redesigned naira can be massively duplicated in colour, which makes it hard to easily detect counterfeits, and one of the ways for curb this counterfeits is for CBN to add more security features to the redesigned naira. NAIRA REDESIGN AND CASHLESS POLICY IN NIGERIA BY JAMES NDUKWE The new naira notes redesign has the same colour as N20, N50 and N10 notes. Voices against the redesign have been raised in fact that the public is dissatisfied with the new redesign in terms of macroeconomic uncertainties. However, on December 6, 2022, the Banking Supervision Department of CBN brought out a new policy that will work in line with the new naira redesign and cashless policy that will be taking effect from January 9, 2023, with the following details:
1. Maximum cash withdrawal by individuals and organizations shall be between N100,000 to N200,000 per week.
2. A customer can only withdraw a maximum of N20,000 from Automated Teller Machine (ATM) daily and N100,000 weekly.
3. Maximum cash withdrawal from POS will be N20,000 per day. Three vital things to note from this CBN policies are:
- 1. Retrieve all idle currency from the economy by currency redesign.
- 2. Promote cashlessness, traceability and accountability by setting cash withdrawal limits and charges. The idea is to keep the currency within the banking system as possible.
- 3. Reduce recurring expenditure of printing naira.
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine The effect of naira redesign in reducing kidnapping in nigeria. Residents in Kaduna state form the population of the study.
DATA PRESENTATION AND ANALYSIS
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
SUMMARY, CONCLUSION AND RECOMMENDATION
It is important to ascertain that the objective of this study was to ascertain The effect of naira redesign in reducing kidnapping in nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the the effect of naira redesign in reducing kidnapping in nigeria
This study was on the effect of naira redesign in reducing kidnapping in nigeria. Five objectives were raised which included: To investigate the current state of kidnapping in Nigeria and its impact on the country’s economy and society, to examine the proposed naira redesign and its potential to reduce incidents of kidnapping by making it more difficult for kidnappers to demand ransom payments, to identify the specific features of the redesigned naira currency that would make it more secure and less susceptible to counterfeiting and to evaluate the effectiveness of the naira redesign in reducing kidnapping incidents and the perception of security among the public. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from residents in Kaduna state. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Redesigning a country’s currency can be an effective tool in deterring criminals from engaging in counterfeiting and other illicit activities. A redesigned currency can also improve the public’s perception of security and confidence in the country’s financial system. However, the impact of a currency redesign on reducing kidnapping incidents is less clear.
Kidnapping is a complex and multifaceted issue that cannot be solved solely through a currency redesign. To effectively reduce kidnapping incidents, a comprehensive approach that addresses the root causes of the problem, such as poverty, inequality, and social unrest, is needed. Such an approach may include improved law enforcement efforts, community engagement, and economic development programs.
While a currency redesign may have some positive effects on reducing kidnapping incidents and improving the perception of security among the public, it is unlikely to be a silver bullet solution. More comprehensive and sustained efforts are needed to effectively address the issue of kidnapping and improve overall security in a country.
Enhance law enforcement efforts: Increase the number of well-trained law enforcement personnel and equip them with the necessary resources and technology to effectively combat kidnapping and other crimes.
Strengthen community engagement: Foster collaboration between law enforcement and community members to encourage the reporting of suspicious activities and increase community awareness about the dangers of kidnapping.
Implement economic development programs: Address the underlying causes of kidnapping, such as poverty and inequality, by implementing programs that promote economic growth and job creation, particularly in high-risk areas.
Improve intelligence gathering and sharing: Establish effective intelligence gathering and sharing mechanisms among law enforcement agencies to better detect and prevent kidnapping incidents.
Increase public awareness: Launch campaigns to educate the public about the dangers of kidnapping and how to stay safe in high-risk areas.
Enact stricter laws and penalties: Increase the penalties for kidnapping and other related crimes to serve as a deterrent to potential criminals.
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