In monetary policy, the term "currency management" has many meanings. Currency management, which includes currency recalibration, redenomination, and restructuring, is a large-scale set of economic and political reforms aimed at bolstering an economy's monetary sector (Somoye and Onakoya, 2013).

Additionally, currency management can be described as a monetary mechanism for redesigning and remodeling the available currencies in a country. The method is used to lessen the amount of money that is in circulation. It is also employed in monetary management to lower transaction expenses. When it becomes challenging to ascertain the flow of money in circulation or when the flow of counterfeit money outweighs the flow of official currencies, causing macroeconomic disequilibrium, this type of mechanism is only occasionally employed in monetary policy (Somoye and Onakoya, 2013).

In order to meet the demand for currency, which is necessary for the economy's smooth operation, adequate stocks must be made available. Currency management's goal is to increase and maintain people’s trust in the currency by protecting its integrity and worth (Central Bank of Sri Lanka, 2018).

Currency management is the most noticeable task performed by a central bank. The reliability of a currency and its effective supply are evident signs of a central bank that is operating effectively on a daily basis.. This crucial central bank function should, in the views of the general public, be effective, meet demand, and have few problems that could harm their respective country’s image (London Academy Business School, 2021).

According to the CBN Act of 2007, the core mandate of the Central Bank of Nigeria in currency management is to issue and manage the country's legal tender currency- Naira, Kobo and E-naira (Central Bank of Nigeria [CBN], 2022). Given that currency management is intended to be a routine activity (The Cable, 2023), the CBN has established reliable currency management procedures since its inception, including currency re-designing.

Over the years, the Central Bank of Nigeria has repeatedly redesigned Nigerian legal tender with the goals of improving currency management , cutting the cost of printing money, and fostering advancements in the payment system. It is important to note that some of the currencies have been demonetized and removed from use (Evbuomwan, 2016).

Thus, the ₦20 note was issued in 1977, the ₦50 note in 1991, the ₦100 in December 1999, ₦200 in November 2000, ₦500 in April 2001, while the ₦1000 was in October 2005. On February 28th 2007, the ₦50, ₦20, ₦10 and ₦5 as well as ₦1 and 50k coins were redesigned and issued into circulation while ₦2 coin was introduced.

However, the ₦20 was printed on polymer for the first time and put into circulation as a pilot project; the goal was to ascertain its benefits and drawbacks as well as to affirm public approval of polymer as a substrate as opposed to paper. Other objectives included lowering the cost of producing money, securing the notes to prevent counterfeiting, and improving durability to preserve the clean note.

Following the successful performance of the polymer-based ₦20 banknote, the redesigned ₦5, ₦10, and ₦5 banknotes were changed to polymer substrate on September 30, 2009. As a result, all banknotes of lesser denomination were now printed on a polymer substrate.

Finally, the CBN issued the N50 Commemorative polymer banknote on September 29, 2010, and the N100 Commemorative banknote on December 19, 2014, as part of its contribution to the nation’s celebration of its 50th anniversary of independence from Britain and its 100th anniversary of its existence (CBN, 2022).

Recently, the governor of CBN, Godwin Emefiele on October 26, 2022 announced that new naira notes would be introduced to replace 200, 500 and 1000 naira notes (Osadebe, 2022).

The purpose of which is to mop up the huge amount of cash that is outside the banking system, which currently estimated at 2.73 trillion or about 85% of the total cash in circulation. Economic factors driving the redesign of the Naira include lowering inflation, thwarting counterfeiting, reducing insecurity, and increasing the amount of money in circulation, as it is believed that 85% of all the country's cash is hidden away in houses outside of the banking system (Pillah, 2023).

Acknowledging that international best practice requires central banks and national authorities to issue new or redesigned currency notes every 5 to 8 years, the President of Nigeria noted that it is now almost 20 years since the last major redesign of the country’s local currency was done. This suggests that the Naira has been overdue for a fresh look for a while (Premium Times, 2022). 

Despite the fact that studies have demonstrated that currency redesign is an effective method for controlling the amount of money in circulation (International Monetary Fund, 2022; Whelan, 2010), many experts have argued that the timing of this exercise in Nigeria is incorrect and will have a negative impact on the country's economy.

It is based on this background that this paper seeks to investigate the effect of naira re-design on the economy of Nigeria.



The study is aimed at investigating the effect of naira re-design on the agency banking (POS) in Nigeria.





The study had the following specific objectives: 

  1. 1.  To identify the role of bank agents in the Banking system of Nigeria
  2. 2.  To examine the effect of the naira redesign on bank agents in Nigeria
  3. 3.  To identify the challenges faced by Nigerian as a result of the effect of naira redesign on agency banking



The following hypothesis was formulated for the study:

H0 : There is no significant difference in the effect of naira redesign on agency banking of Nigeria

Ha : There is a significant difference in the effect of naira redesign on agency banking in Nigeria.



Nigeria has a big challenge with currency counterfeiting, with many such operations all over the country (Nnamdi Azikiwe University, 2022). The CBN governor asserts that recent advancements in printing technology and photographic technology have made counterfeiting comparatively simpler. The CBN has observed noticeably increased rates of counterfeiting recently, particularly at the higher denominations of N500 and N1,000 banknotes (Christopher, 2022).

Currency redesigns increase a currency’s security by allowing a nation to keep counterfeiting to a minimum and remain on top of counterfeiting threats. The CBN anticipates that redesigning Nigeria’s money will lower counterfeiting (Nnamdi Azikiwe University, 2022).

Moreso, hoarding cash is still very popular. According to current estimates, 2.73 trillion naira, or about 85% of the total quantity of money in circulation, is stored outside of the banking system. People in charge of running government departments and parastatals have historically accumulated wealth for themselves by hoarding cash.

The need to combat insecurity and the worsening shortage of clean, suitable banknotes are two additional economic reasons that led to the redesign of the Naira notes (Pillah, 2023).

The makeover of the Naira is advantageous, but its effects on Nigeria's economy are very worrying. Therefore, it is important to evaluate the Central Bank of Nigeria's effort to reform its currency critically.

In a 68-page report titled “Nigeria Development Update December 2022 – Nigeria’s Choice (English),” the World Bank expressed concerns about the redesign. The Washington-based bank issued a warning that the timing and brief transition period of the redesigned naira, which entered circulation in December 2022, may have a negative impact on economic activity, particularly for impoverished Nigerians (Komolafe, 2022).

The primary targets that would be adversely impacted by the new policy were identified as small businesses, particularly those that rely on daily cash transactions. It continued by stating that households and businesses already experience significant financial strain due to ongoing, high inflation, which has recently been exacerbated by external shocks to food and fuel prices as well as by the devastating floods, and that the quick phase-out of existing naira notes may make matters worse for them (Komolafe, 2022).

In addition, experts claim that this policy change is merely a diversion from the serious economic crises that are currently roiling the country and offers no major economic benefits to the populace. The Minister of Finance, appearing before the National Assembly, disowned the policy and slammed it as valueless in fiscal and monetary terms (Amadi and Opatola, 2022).

Given that the government is already grappling with a sizable debt deficit and is likely to borrow heavily to fund the currency redesign, experts have noted that it will come at a significant deficit for the current economy. They have argued that this will intensify inflationary pressure on Nigeria's currency.

In light of this, this research makes an effort to analyze how the redesign of the naira will affect Nigeria's economy.



Nigerians have expressed their opinions about the move to redesign the naira. Economists, lawyers, and other policy experts have engaged in a serious discussion over the policy. While some have lauded the move, some see it as unnecessary by the bank.

The focus of this research will essentially be on understanding how the naira redesign impacts the Nigerian economy. The study's results will be useful to academics, policymakers, the Nigerian government, and the general public.

Ultimately the analysis presented in this study will convey valuable information for future research. 



The scope of the study will covers impact of naira redesigning on agency banking in Nigeria using Uyo LGA as a case study. The information of the study will be gotten from central bank of Nigeria.






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