Wednesday, August 15, 2007

More Questions about the CBN New Naira Reforms

The Central Bank of Nigeria announced major currency reforms whereby the naira is being transformed by dropping two zeros or moving two decimal points to the left which is also aimed at reducing the quantum of money in circulation and preserve the value of the naira. Under the new reforms, 100 naira now becomes one naira. See full story

Now that is a preamble, the real thing is what happens if the regime take effect from August next year? There had been some opinions on what the regime will look like and there had been some insight into it as could be seen from this article in the Thisday

Now having said all this, there are still many questions, some rhetorical in nature since we both know what will happen, but I tell you, there are some that can best be answered when the regime actually take effect. But first, the matters arising.

No doubt, there would be a lot of coin carriage as against the present regime where we deal so much in paper money. Most of the daily transactions of buying and selling will be done through coins. There wont be ignoring of coins change as every coins is very important now.

Vending machine will spring up all over Nigeria, mostly those selling soft drinks. Phone booth will spring up also that will require coin slot while Kalo Kalo machine will continue to reign.

Beggars will have a field day since there will be large amount of coins in circulation, this may promote street begging.

Customers would be more interested in their bank balances to the kobo since Coins would be so much involved in daily transactions of buying and sellings.

Prices of commodity would also be affected as some items that price ceilings could not be fixed minimally before would have different coins denominations to rest on. For instance, a sachet of Pure Water cannot jump from 5k to 10k, it could rise from 5k to 6k as against the present regime where it rose from 5 naira to 10 naira.

What will happen to the Phone tarrif in Nigeria? In the present regime it is 50 - 60 kobo per second, what would it change to?

What about price of fuel? would it change to 7 kobo per litre?

Would the Fulani traders who are selling Cow still understand that the Cow he used to sell for 40,000 naira is now 400 naira?

What will happened at Owanbe parties? Would the people still spray 20 naira denominations being the highest denominations but equalled to 2,000 naira of present regime?. Would 50 kobo paper money that will be introduced gained popularity in owambe parties as it used to be in those days?

Would Murtala edifice still appears on the yet to be introduced 20 naira note? Would Illiterate Yoruba people still prefer to call the 20 naira note (Muri kan?)

Would ATM machines be programmed to dispense coins?

What will happen if US also decided to decimalise its own dollar such that the present 100 dollar is now 1 dollar? Would Nigeria again decimalise its own naira?

How many Nigerians would lose their precious title of Millionnaire and Billionnaire?

I beg I don tired jare, if you know of more questions email me or better still the comments is open for your contributions.

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