Currency Redesign Policy Implementation: Implications for Industrial Performance in Nigeria

Abstract

This paper investigates the effect of currency redesign policy implementation on industrial performance in Nigeria. The study adopted survey research design using Google Form and Computer Aided Personal Interviewing (CAPI) tool for data collection, which were carried out in the months of February and March 2023. A total of 514 micro, small, medium and large scale enterprises (MSMLEs) were randomly selected across some selected industrial sectors in five states within the six geo-political zones and Federal Capital Territory, Abuja, Nigeria. A response rate of 59.53% at a reliability level of 95% was recorded. The study revealed that the currency redesign policy implementation has negative short term effect on industrial performance. The effect includes weak access to cash flow, vulnerable economic hardship, inadequate marketing/loss of customers; and low returns on business investment. In the long run, the study revealed the positive effect of the policy as leading to reduced currency counterfeiting, encourage d a cashless economy, address ing cash hoarding that ha s led to reduction in the incidences of kidnapping and terrorism as well as strengthen the Naira against the US dollar in the long run term. The result also revealed that the policy has a significant difference (X 2 = 15.3, p ≤ 0.05) on enterprise performances by scale from small to large. The paper concludes that the currency redesign policy implementation has both negative and positive implications for industrial performance. The paper recommends the need to make Nigerian monetary policy implementations more industrially effective and friendly in the future. Moreso, monetary policy should be set in such a way that the objective it wants to achieve is clearly and transparently defined in response to the dynamics of the domestic and global economic developments for industrial growth in Nigeria.