Against the backdrop of sustained rumors about the introduction of the Naira re-denomination by the current government, economy analysts and corporate chieftains have painted a discomforting picture of what the policy may entrench on the economy if carried out.
Some experts who spoke to Saturday Vanguard also believe that it is either the apex bank is flying a kite to sample public opinion or they are actually about to announce the policy because ‘‘there is not smoke without fire’’. “Under present economic conditions, re-denomination will be an exercise in futility. It could further weaken the Naira and reduce the purchasing power of consumers as producers will lash on the opportunity to increase prices.”Reacting to the alleged plan by the CBN to redenominate the Naira, Tajudeen Olayinka, CEO, Wyoming Capital and Partners said: “Since CBN has continually denied the plan to embark on such a program, I also don’t find the rumor credible.
“Doing it at the wrong time, when the economy is in a prolonged state of disequilibrium could be counter-productive, as instability may soon return. “Good and careful planning of currency redenomination program, with timely implementation, could herald a new beginning for macroeconomic stability, especially, a new era of a very low or near absence of inflation, due to improved pricing mechanism in the economy.
‘‘Re-denomination can, however, contribute to price stability by simplifying price calculations and accounting which are usually impacted by high inflation rates. However, Azeez who is also the Chief Executive Officer of Obat Global Investment Limited, stated: “If such should happen, the government should first do the needful by providing enabling environment for business to thrive which would encourage foreign investors, promote small scale businesses and sizeable numbers of entrepreneur.
“This is different from devaluation or revaluation, which involves changing the real exchange rate of a currency. “I advise that Nigeria should consider redenomination only as part of a more comprehensive economic strategy aimed at addressing issues related to exchange rates, inflation, and overall economic stability.”Most of the experts spoke on the Ghana experience which has spanned 17 years now without any positive result.