By Bassey Udo
The Central Bank of Nigeria (CBN) is to redesign, print and circulate the country’s banknotes, the apex bank governor, Godwin Emefiele, has announced.
Emefiele who disclosed this on Wednesday in Abuja said the denominations that would be affected included N100, N200, N500, and N1,000 notes.
He said President Muhammadu Buhari approved the exercise following persistent concerns the CBN was facing with the management of the banknotes, both in circulation and outside the banking system in the country.
Currency management, which is a key function of the CBN in line with the provisions of Section 2(b) of the CBN Act 2007, has faced several challenges that have continued to grow in scale and sophistication in recent years.
He said the sophistication of the currencies has posed unintended consequences for the integrity of both the CBN and the country.
These include significant hoarding of banknotes by members of the public, with over 80 percent of currency in circulation outside the commercial banks’ vaults.
Also, he said the worsening shortage of clean/ banknotes presents negative perception of the CBN and increased risk to financial stability as well as the increased ease and risk of counterfeiting.
Recent development in photographic technology and advancements in printing devices, the CBN governor said, have made counterfeiting of the national currency relatively easier, with significantly higher rates affecting the higher denominations of N500 and N1,000 banknotes.
Although global best practice was for central banks to redesign, produce and circulate new local legal tender every five to eight years, Emefiele said the Naira has not been redesigned in the last 20 years.
As a result of these challenges, he said the CBN, in line with Sections 19, Subsections a & b of the CBN Act 2007, sought and received the presidential nod to redesign, produce, and circulate new series of the Naira notes.
“In line with this approval, we have finalized arrangements for the new currency to begin circulation from December 15, 2022.
The new and existing currencies shall remain legal tender and circulate together until January 31, 2023 when the existing currencies shall seize to be legal tender,” the CBN governor announced.
Consequently, he urged all Deposit Money Banks currently holding the existing denominations of the currencies to immediately begin to return them back to the CBN.
He said the newly designed currency noted would be released to the banks in the order of First-come-First-serve basis, while bank customers were enjoined to begin paying into their bank accounts the existing currencies to enable them withdraw the new banknotes once circulation begins in mid-December 2022.
As part of the process to launch the new banknotes into circulation, the CBN governor said banks were expected to keep open their currency processing centres from next Monday to Saturday, to accommodate all cash that would be returned by their customers.
To ensure a smooth transition from the existing to new notes, Emefiele announced the suspension till further notice of all bank charges for cash deposits, no bank customer would be made to bear any charges for cash returned or paid into their accounts.
He reminded members of the public that the present banknotes would remain legal tenders till the end of January 2023 “The present banknotes should not be rejected as a means of exchange for purchase of goods and services,” Emefiele warned.
He assured the general public that the CBN would continue to monitor both the financial system in particular, and the economy in general, and to always act in good faith for the achievement of the Bank’s objectives and the betterment of the country.