NAIRA DESIGNING AND IT'S IMPACT TO THE NIGERIAN ECONOMY

Abstract This study examines the redesign of the Nigerian Naira and its impact on the Nigerian economy, with particular emphasis on exchange rate stability and broader macroeconomic performance. Currency redesign is a monetary policy tool used globally to improve the integrity of legal tender, combat counterfeiting, curb illicit cash hoarding, and restore public confidence in a nation’s currency. In October 2022, the Central Bank of Nigeria (CBN) announced the redesign of the ₦200, ₦500, and ₦1000 denominations, citing concerns over excess cash outside the banking system, insecurity, corruption, and the need to strengthen monetary control. The study explores the economic implications of this policy within the context of Nigeria’s foreign exchange challenges, inflationary pressures, fluctuating oil revenues, and declining investor confidence. It investigates how the Naira redesign may influence key macroeconomic indicators such as exchange rate, inflation rate, foreign direct investment (FDI), and real interest rate, and how these variables collectively affect economic development. Using established economic theories and empirical insights from global currency reforms, the research seeks to determine whether the Naira redesign has contributed to improved monetary stability or created additional short-term economic disruptions. The study is guided by clearly defined research objectives, questions, and hypotheses that evaluate the relationship between currency reform and economic performance in Nigeria. The findings of this research are expected to provide valuable insights for policymakers, financial institutions, and economic stakeholders by assessing the effectiveness of currency redesign as a tool for promoting financial stability and sustainable economic growth in Nigeria.