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Nigeria hopes new currency notes curb inflation

In this photo released by the Nigeria State House, Nigeria's central bank governor, Godwin Emefile, left, presents the newly designed currency notes to Nigeria's President Muhammadu Buhari, right, during a launch in Abuja, Nigeria, Tuesday, Nov. 22, 2022. [AP]

Nigeria has launched newly designed currency notes, a move that the West African nation's central bank says will help curb inflation and money laundering.

The newly designed denominations of 200, (Sh55) 500 (Sh137) and 1,000 naira (Sh275) also would drive financial inclusion and economic growth, said Godwin Emefiele, governor of the Central Bank of Nigeria.

Experts, however, are sceptical about such results in a country that has battled chronic corruption for decades, with government officials known to loot public funds that has caused more hardship for the many struggling with poverty.

Nigeria's currency has not been redesigned in 19 years, and the new initiative is the latest introduced by policymakers in Africa's biggest economy in their quest for a cashless and more inclusive economy.

The naira is "long overdue for a new look," Nigerian President Muhammadu Buhari said at the launch on Wednesday.

The new paper notes designed in Nigeria and featuring enhanced security "will help the central bank to design and implement better monetary policy objectives".

More than 80 per cent of the 3.2 trillion naira (Sh883 billion) in circulation in Nigeria are outside the vaults of commercial banks and in private hands, Emefiele said. Regulators last month announced a January 31 deadline for old notes to either be used or deposited at banks.

With inflation at a 17-year high of 21.09 per cent which is driven by soaring food prices, Emefiele said the new notes "will bring the hoarded currencies back into the banking system" and help fight corruption.