The naira redesign strategy, which was intended to collect cash and reduce the amount of extra money in circulation, caused headline inflation to increase to 21.91 percent in February. The inflation rate in Nigeria for February was 21.91%, which is the highest level in 18 years.
Mr. Giwa Ademola, the acting Branch Controller for the CBN in Ondo State, defended the naira redesign policy by saying that it will “benefit the Nigerian economy enormously given that this policy will help to control inflation, as the exercise will bring the hoarded currency into the banking system, thereby making monetary policy more effective.
The CBN governor’s position is rejected by economists. Segun Kuti-George, the national vice chairman of the Nigerian Association of Small-Scale Industrialists, claimed that the naira redesign policy which has fueled scarcity of the local currency, was responsible for the spike in the country’s inflation rate.