The 2023 Nigerian currency crisis was precipitated by a shortage of cash currency (the

naira The naira (sign: ₦; code: NGN; , , , ) is the currency of Nigeria. One naira is divided into 100 ''kobo''. The Central Bank of Nigeria (CBN) is the sole issuer of legal tender money throughout the Federal Republic of Nigeria. It controls the ...

) and an attempt by the

Nigerian government The federal government of Nigeria is composed of three distinct branches: the executive, the legislative, and the judicial, whose powers are vested and bestowed upon by the Constitution of the Federal Republic of Nigeria. One of the primary f ...

to force citizens to use a newly created government-sponsored

central bank digital currency A central bank digital currency (CBDC; also called digital fiat currency or digital base money) is a digital currency issued by a central bank, rather than by a commercial bank. It is also a liability of the central bank, unless it is dividend-y ...

. This led to extensive street protests in mid-February 2023.

Central Bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...

governor

Godwin Emefiele Godwin Ifeanyi Emefiele (born 4 August 1961) is a Nigerian politician, economist and banker who served as governor of the Central Bank of Nigeria from 4 June 2014 until he was succeeded by Folashodun Shonubi, on 9 June 2023. Early life and e ...

initially cited Nigerians hoarding notes in their homes as the reason for the currency redesign. However, he later claimed that it would deter counterfeiters and those paying kidnappers' ransoms, and that it was a step towards a cashless society. He also argued that it would help reduce inflation. Some analysts and politicians have said that a motive of the CBDC introduction and deprecation of the old currency was to curb vote buying, by thwarting politicians who had amassed a stockpile of naira in preparation for election day.

References

{{econ-hist-stub 2023 in Nigeria Economy of Nigeria

See also

References