THE IMPACT OF NAIRA REDESIGN ON NIGERIA ECONOMY – “AN ARDL ANALYSIS”

ABSTRACT

This study focuses on the impact of naira redesign on the Nigeria economy using secondary data which span for over 40 years period. The study analyzes the relationship between the effect of naira redesign on Nigeria economy using the Auto Regressive Distributed Lagged Model (ARDL) to obtain both the long run and short run relationship. From the study it was discovered that currency in circulation (proxy for naira redesign) exhibited a negative and insignificant relationship with Gross Domestic Product (GDP). There the study recommended that; there should be a clearly define objectives of the currency redesign. Is it primarily for security and anti-counterfeiting purposes, to reflect cultural identity, or to improve durability and cost-efficiency? Understanding the primary goals will help guide the redesign process. There should be transparent communication of the objectives, progress, and benefits of the redesign to the public, businesses, and financial institutions. Transparency builds trust and ensures that stakeholders are informed and supportive of the changes and efficiency and costeffectiveness: costs associated with the currency redesign should be carefully managed. There should be assurance that the benefits, such as improved durability and security, outweigh the expenses related to design, production, and distribution. Economic efficiency uses the redesign as an opportunity to introduce cost-efficient printing methods and materials. This can lead to long-term cost savings for the government and the central bank.