Q1’2023 was challenging for businesses and consumers in Nigeria, no thanks to the naira redesign—another flawed policy by the Central Bank of Nigeria (CBN) and the federal government.
From people struggling at ATMs to get the new naira notes to long downtimes using bank apps, consumer demand and business output fell, contributing to the decline in GDP growth from 3.5% in Q4’2022 to 2.3% in Q1’2023.
But Nigeria is now under a new dispensation of renewed hope. In his inaugural speech on May 29, President Tinubu said his administration would review the naira redesign policy while old and new notes remain legal tender.
However, old notes will cease to be legal tender by December 2023 per the CBN, meaning they’ll be useless. So, while President Tinubu’s statement is an excellent signal to businesses like Unilever and consumers that suffered in Q1, the more significant questions are what the policy review will look like and how fast it will be. These questions hint at many unknowns.
What is clear, though, is that the naira redesign policy was damning to the economy. Understanding how bad it was, is imperative to getting better policy directives before it is re-implemented by year-end.
This is what we’ll discuss in today’s article. We’ll make a case for rethinking the currency design policy using the recently released GDP numbers to