IMPACT OF NAIRA REDESIGN ON ECONOMIC GROWTH IN NIGERIA

ABSTRACT The redesign of the Naira, Nigeria's official currency, represents a significant monetary policy aimed at tackling critical economic issues such as inflation, counterfeiting, and the inefficiencies of a cash-dominated economy. This study explores the impact of the Naira redesign on economic growth in Nigeria focusing on key factors such as investment, consumption, and government spending. By integrating theoretical insights from monetary economics with empirical data, the research assesses the immediate and long-term consequences of this policy intervention. The results suggest that the Naira redesign can enhance public confidence in the currency, reduce the incidence of counterfeiting, and create a more secure environment for domestic and foreign investment, thereby fostering economic growth. The move towards a cashless economy, facilitated by the redesigned currency, can also lower transaction costs and improve economic efficiency. However, the study also identifies potential challenges, including the costs of printing and distributing new currency notes and the risk of disrupting the informal sector, which relies heavily on cash transactions. This research draws on historical data, policy analyses, and comparative studies of similar currency reforms in other nations to provide a nuanced understanding of the potential impacts of the Naira redesign. The study concludes that while the redesign has the potential to positively influence Nigeria's economic growth, successful implementation, and supportive policies are crucial to address associated risks and ensure a seamless transition. This work contributes to the broader discourse on how currency redesigns can be strategically employed to stabilize and enhance economic growth in developing countries. The study recommends that the government ensure all necessary logistics for printing and circulating the new currency before enforcing deadlines on the old Naira notes. Keywords: Naira redesign, economic growth, Nigeria, monetary policy, inflation control.