Nigeria: CBN Set To Redesign Naira Notes, Gives Reasons

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The Central Bank of Nigeria, CBN’s Governor, Godwin Emefiele, Wednesday declared that the bank would release re-designed naira notes by December 15, 2022.

Emefiele said this during a special press briefing in the nation’s capital, Abuja, where he gave reasons for the decision.

The CBN Governor said the decision was targeted at controlling currency in circulation as well as curbing counterfeit currency and ransom payments to kidnappers and terrorists.

He said, “Indeed, the integrity of a local legal tender, the efficiency of its supply, and its efficacy in the conduct of monetary policy are some of the hallmarks of a great central bank.

“In recent times, however, currency management has faced several daunting challenges that have continued to grow in scale and sophistication with attendant and unintended consequences for the integrity of both the CBN and the country.

“More specifically, as of the end of September 2022, available data at the CBN indicate that N2.73tn out of the N3.23tn currency in circulation was outside the vaults of commercial banks across the country, and supposedly held by members of the public. Evidently, the currency in circulation has more than doubled since 2015, rising from N1.46tn in December 2015 to N3.23tn as of September 2022. I must say that this is a very worrisome trend that cannot continue to be allowed.”

On how it would help curb ransom payment, he said, “Also, in view of the prevailing level of the security situation in the country, the CBN is convinced that the incident of terrorism and kidnapping will be minimized as access to the large volume of money outside the banking used as the source of funds for ransom payment will begin to dry up.”

He further identified more reasons that necessitated the re-designing of naira notes.
According to the apex bank governor, the challenges included: significant hoarding of banknotes by members of the public; worsening shortage of clean and fit banknotes with an attendant negative perception of the CBN and increased risk to financial stability; and increasing ease and risk of counterfeiting evidenced by several security reports.

He added, “Indeed, recent developments in photographic technology and advancements in printing devices have made counterfeiting relatively easier. In recent years, the CBN has recorded significantly higher rates of counterfeiting especially at the higher denominations of N500 and N1,000 banknotes.”

The CBN governor further said that the re-designing of the currency would help to drive a cashless economy and it would be complemented by the increased minting of the e-Naira.

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