The proposed redenomination of Nigeria ’s currency, the Naira , has begun generating concerns in Industrial circles over the possibility of its creating disequilibrium in goods and Services pricing mechanisms.
Although, some Sector operators lauded the proposal on account of its ability to give the Naira a psychological edge over other currencies, especially in Africa , they, nevertheless, expressed reservations on the ability of the strategy to impact on productivity as well as address the challenges of a probable disequilibruim it could inflict on pricing mechanisms.

Despite describing it as a psychological boost for the Naira , some sectoral leaders said it would be an uphill task for the strategy to acheive its proposed obejctives of stabilising the Exchange rate and lowering inflation as Long as the economy remained undeveloped productively.

Besides, the inudtrialists identified the problem of strategic Information Management , through planned enlightenment campaign, as one that must be recognised and solved if Nigerian Are to be carried along in the implementation the New currency SCHEME .According to them, this became primal as Nigeria remained mainly a country of illiterates.

The General outline of the Naira redenomiantion, according to the Governor of the Central Bank of Nigeria , Prof. Charles Soludo, includes dropping two zeroes from the existing currency notes, issuing more coin denominations, and phasing Out the existing denomiantions.

Ensuring from these moves would be efforts to make the Exchange rate of the Naira to be N1.25k to the United States dollar, an attempt to restore the Naira to its 1985 face Value . The effective date for the New policy, Soludo said, would be August 1, 2008.

In the opinion of the Manufacturers Association of Nigeria , the Lagos Chamber of Commerce and Industry and other industrialists, the proposed policy lacked merit as “it appears too artificial.”

The President of Man , Alhaji Bashir Borodo described the proposed policy as “an illusion, which has no Value addition to the Manufacturing Sector and the economy.”

The LCCI, on its part, described the move as a planned “massive disruption of the Price equilibrium and mechanism in the country.”

Borodo further described the proposal as “confusing, with market destabilising potential as it would throw up confusions in the pricing of goods and Services .”

According to him, “re-denomination of the Naira is not the nation’s priority at present; but a purposeful and gradual Building of the macro-economic factors, as it is being done by the Government , iswhat the Naira and the economy require.”

He said, “There is no need to soar up the Naira Value by force by whatever means. All that we need now is a natural revaluation of the Naira in such a way that All the essential ingredients of a growing currency should have. We do not do this hurried approach.

“The most important thing is a focused Development of the nation’s macro-economy.”

On the impact and possible gains of the policy to the Industrial Sector , the Man boss said, “nothing is there for the Manufacturing and Industrial Sector .”

On his part, the President, LCCI, Dr. Ademola Ajayi, said the only advantage in the proposed policy “is the psychological satisfaction of a strong currency, relative to other currencies.”

He said, “Let me stress that this is only psychological as nothing would change in Real terms.”

According to him, the redenomination was not operationally necessary as the Value of the Naira had not degenerated into a level that called for a re-denomination.

He said, “We Are not anywhere near the situation in Ghana , for example, where the Cedi was exchanging for 9,300 Cedis to the US dollar. To All intents and purposes, the Naira is a stable and credible currency that has functioned very well in the last five years as a credible legal tender and good store of Value in the Nigerian economy.

“The cost of implementation of the currency re-denomination may be horrendous and difficult to justify. Even as we speak, the proponents of this currency reform have not been able to articulate what Value the proposal will add to the economy,” he said.

The LCCI boss said, “There is a Real danger of massive disruption of the pricing equilibrium and mechanism in the economy.

“The challenge of determining the prices of goods and Services to reflect New denominations would be daunting. This is even more so having regard to the level of literacy in the Nigerian society, which is very Low.”

Ajayi added that “the position of the Real Sector , which is the hub of the economy, will still determine the Real Value of the Naira at the end of the day.”

On his part, the President, Nigerian Association of Small Scale Industrialists, Mr. Duro Kuteyi, said the problem of enlightement might scuttle the policy.

According to him, apart from destabilising the prices of goods and Services , the policy meant no change of status to the Naira and the economy.

He, however, urged the Government to work harder on the macroeconomic indicators so that Real Development would take place in the economy.