The Central Bank of Nigeria (CBN) has announced a revaluation of the Naira, according to NigeriaFirst.org
Central Bank of Nigeria (CBN) Governor, Prof. Chukwuma Soludo on August 14, in a landmark policy briefing, unveiled plans for a comprehensive and revolutionary reworking of the Nigerian economy, which will return the Naira to its pre-1986 value.
According to Professor Soludo, implementing the impending re-denomination of the Naira would involve dropping two zeroes or moving two decimal points to the left from the prevailing currency, and issuing more coin denominations.
By implication, the move would in nominal terms shrink all naira denominated assets, prices, transactions and contracts, while in real terms their value would rise 100-fold.
My beef with this redenomination would have easily been that what happens to the proposed Eco currency? (The Eco is the proposed name for the common currency that the West African Monetary Zone plans to introduce by 2009 in the framework of ECOWAS.) But then, the last paragraph of the Governor’s speech to the legislature addresses that question:
Are these policies consistent with the drive towards a single currency in West Africa? Yes: Nigeria remains committed towards the ECOWAS goal. Currently, the Nigerian economy constitutes about 70 percent of the entire ECOWAS economy and accounts for about 80 percent of the total external reserves. It therefore goes without saying that if the Naira is properly aligned and can become the ‘Reference Currency’, the goal of a monetary union becomes all the more credible and sustainable. Nigeria has met all the primary convergence criteria and hopes that the other countries will do same on a sustained basis. In the meantime, Nigeria must continue to make progress.
What is your opinion on this issue?
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