The Central Bank of Nigeria (CBN) has revamped several new naira bills.
Godwin Emefiele, the governor of CBN, stated this during a press briefing on Wednesday.
Emefiele stated that the new layout and releases will take effect starting in mid-December 2022.
As per Emefiele, the newly introduced banknotes consist of N200, N500, and N1000.
He advised Nigerians to take their old currency to banks in order to expedite the withdrawal of the new banknotes once they begin to circulate.
The governor of CBN explained that the decision was reached due to persisting concerns with the management of the current series of currency and banknotes, particularly in the banking system in Nigeria. Speaking about the motivation for the change, the governor highlighted the ongoing issues.
He stated that both the CBN and the nation’s integrity have encountered unforeseen and associated repercussions that have been escalating in scale and complexity in recent times. Furthermore, he emphasized that currency management has confronted numerous formidable obstacles.
According to Emefiele, the majority of currency in circulation is kept outside the commercial banks’ vaults, with data indicating that a significant portion of banknotes is being hoarded by the general public, posing one of the main challenges.
He stated that by the end of September 2022, the available data from CBN indicates that the currency in circulation, supposedly held by the public and commercial banks across the country, was N3.23 trillion, with N2.73 trillion being held in the vaults outside of circulation.
Emefiele stated that this is a worrisome trend that cannot be allowed to continue. The circulation of currency has evidently more than doubled since December 2015, rising from N1.46 trillion to N3.23 trillion in September 2022.
Numerous security reports indicated a rise in counterfeiting risk and an increase in ease; this led to an increase in financial instability and a negative perception of the Central Bank of Nigeria (CBN), along with worsening challenges such as a shortage of fit and clean banknotes.
The central bank’s governor also noted that recent progress in photographic technology and enhancements in printing devices have made counterfeiting relatively easier.
Emefiele stated that the Central Bank of Nigeria (CBN) has observed significantly higher counterfeiting rates, particularly for banknotes with higher denominations of N500 and N1,000, in recent years.
The naira has not been redesigned in the last 20 years, with local legal tender being circulated and produced every five to eight years, although it is considered best practice for central banks to redesign currencies globally.
The existing and new currencies shall remain legal tender and circulate together. We have finalized arrangements for the new currency to begin circulation from December 2022, with this approval. The management of CBN sought and obtained President Muhammadu Buhari’s approval to produce and circulate new series of banknotes at N1,000, N500, and N200 levels, and to redesign them. These actions are in line with subsections (b) and (a) of section 19, sections 18 and 2, and provisions of section 2(b) and 2(a), based on the basis of facts, problems, and trends.
With immediate effect, all deposit money banks (DMBs) are permitted to commence the process of returning these notes to the CBN, while still retaining the current denominations of the currency. The banks will receive the newly designed currency in the sequence of First-come-First-serve basis.
Starting in mid-December 2022, customers are encouraged to deposit the current currency into their bank accounts in order to withdraw the new banknotes. It is expected that all currency processing centers will remain open from Monday to Saturday to handle the cash returned by customers, including all banks.
The customers of DMBs should take note that there will be no charges imposed by the bank for cash deposits. It is important to note that legal tender notes should not be rejected as a means of exchange, and they should continue to be accepted for the purchase of goods and services. Customers will not be subjected to any charges when exchanging these notes for cash.
Emefiele stated that the eNaira will experience a boost in production, accompanied by a currency redesign. This initiative aims to further strengthen CBN’s efforts in establishing a cashless economy.
He stated that implementing a more effective monetary policy would result in further strengthening the banking system both internally and externally, thereby enhancing the currency.
Emefiele further stated, ‘The Central Bank of Nigeria (CBN) is also convinced that the incidents of kidnapping and terrorism would be minimized as the volume of money flowing from outside the banking system to fund ransom payments begins to decrease, considering the prevailing level of security in the country.’