Nigerian naira banknotes are seen in this picture illustration
Reuters

Nigeria announced the launch of its much-awaited newly designed currency notes Wednesday. The newly-launched notes include denominations of 200 (5 U.S. cents), 500 ($1.10), and 1,000 nairas ($2.20). The move to introduce new currency notes is aimed at fighting corruption and money laundering in the country.

Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), announced the printing of new notes, along with a reduced window for exchanging old notes for new ones, Associated Press reported.

The move is being seen as a significant development, noting that the currency of the militancy and banditry-hit nation has not changed in 19 years. It is considered a step towards a cashless economy and revamped financial structure.

The new currency rollout, however, invited huge criticism since approximately 45% of the country's adult population doesn't have bank accounts.

At the launch, Nigerian president Muhammadu Buhari said Naira was "long overdue for a new look." The new paper notes possess new security features to "help the central bank to design and implement better monetary policy objectives," the outlet quoted him as saying.

The redesigned notes have been printed by Nigerian Security Printing and Minting, according to AfricaNews.

Additionally, the CBN is planning to issue new notes to the public from Dec. 15. Meanwhile, the current window for people to exchange old notes for new ones is till January 31, 2023.

As of now, around more than 80% of the Naira notes in circulation, which is around 3.2 trillion ($7.2 billion) are outside the vaults of commercial banks and concentrated in private vaults, according to Emefiele. Regulators have directed citizens to either use or deposit old banknotes within the revised deadline.

Inflation in the country is at a 17-year high of 21.09%, driven by factors like lawlessness and soaring food prices. Analysts also suggest Nigeria is facing increasing inflation due to excess liquidity and the high cost of fuel.

Emefiele said the new notes "will bring the hoarded currencies back into the banking system" and help the central bank regain control of black money.

"The currency redesign will also assist in the fight against corruption as the exercise will reign in the higher denomination used for corruption and the movement of such funds from the banking system could be tracked easily," the central bank chief added.