On Wednesday, the Central Bank Governor, Godwin Emefiele briefed the press on the redesigned Naira Notes.
The redesigned notes are N200, N500, N1000, and circulation of these notes would begin middle of December. He advised Nigerians to take old notes to banks to enable them to withdraw the new banknotes once circulation begins.
Citing the reasons for the redesign of the Naira Notes, the CBN governor stated that the decision was reached to change the notes due to persisting concerns over the management of the current series of banknotes, and currency in circulation — especially notes outside the banking system in Nigeria. Here are some of the reasons:
- Increased Rate of Counterfeiting of N500 and N1000 Banknotes: In recent years, the CBN has recorded significantly higher rates of counterfeiting especially at the higher denominations of N500 and N1,000 banknotes…This is due to the recent development in photographic technology and advancements in printing devices have made counterfeiting relatively easier, Emefiele said
He stated that the 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.
- Excessive hoarding of Naira Notes: Emefiele said that available data at the CBN indicate that N2.73 trillion out of the N3.23 trillion currency in circulation, was outside the vaults of commercial banks across the country; and supposedly held by the public at the end of September 2022. These statistics show that over 80% of the Nigerian Currency is not in circulation, rather it is being hoarded by members of the public.
- The Naira has not been redesigned in the last 20 years: Also, the Naira has not been redesigned in the last 20 years, which is contrary to global best practice for any central bank to redesign, produce and circulate new local legal tender every five to eight years.
“On the basis of these trends, problems, and facts, and in line with provisions of sections 2 (b), section 18 (a), and sections 19, subsections (a) and (b) of the CBN act 2007, the management of the CBN sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N200, N500, and N1,000 levels. In line with this approval, we have finalised arrangements for the new currency to begin circulation from December 15, 2022. The new and existing currencies shall remain legal tender and circulate together.
“Accordingly, all deposit money banks (DMBs) currently holding the existing denominations of the currency may begin returning these notes back to the CBN effective immediately.
“Customers of banks are enjoined to begin paying into their bank accounts the existing currency to enable them to withdraw the new banknotes once circulation begins in mid-December 2022. All banks are therefore expected to keep open their currency processing centres from Monday to Saturday so as to accommodate all cash that will be returned by their customers.
“For the purpose of this transition from existing to new notes, bank charges for cash deposits are hereby suspended with immediate effect. Therefore, DMBs are to note that no bank customer shall bear any charges for cash returned/paid into their accounts. Members of the public are to please note that the present notes remain legal tender and should not be rejected as a means of exchange for purchase of goods and services.”