CBN Governor announces redesign of Naira notes to fight various negative ills

The Governor of the Central Bank of Nigeria, Godwin Emefiele, announced on Wednesday, October 26th, that the apex bank would release the long overdue re-designed naira notes by December 15, 2022.

Emefiele announced this during a special press briefing in Abuja where he gave reasons for the decision to redesign the Naira notes.

According to the CBN governor, this would help in the controlling of how much currency would be  in circulation as well as curb counterfeit currency and ransom payment to kidnappers and terrorists.

“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 at 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, currency in circulation has more than doubled since 2015, rising from N1.46tn in December 2015 to N3.23tn as at September 2022. I must say that this is a very worrisome trend that cannot continue to be allowed,” he voiced out his worry over the issues occurring in the country. 

He also said that the decision to redesign would also help to reduce the menace of kidnapping as the money in circulation would be reduced. 

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

According to the apex bank governor, the challenges like significant hoarding of banknotes by members of the public; worsening shortage of clean and fit banknotes with attendant negative perception of the CBN and increased risk to financial stability and increasing ease and risk of counterfeiting evidenced by several security reports we’re parts of the reasons that necessitated the change in design.

“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,Emefiele, also added that the redesigning of the currency would help to drive a cashless economy and it would be complemented by the increased minting of the e-Naira.

While according to global best practices, it is expected that central banks redesign, produce and circulate new local legal tender every five to eight years, the apex bank governor said that the naira had not been redesigned in the last 20 years.

In a speech later released to the press, it was noted that the new series of banknotes would be for only N100, N200, N500, and N1, 000 levels.

In an effort to clear off the money being hoarded by Nigerians as soon as possible, he said that existing notes would cease to be regarded as legal tenders by January 31, 2023.

Emefiele further urged Nigerians to proceed to their banks to deposit their naira notes, saying that deposit fee would be waived for transactions below N150, 000.

He also directed all commercial banks to keep open their currency processing centres from Monday to Saturday so as to accommodate all cash that would be returned by their customers.