WED, 26 OCT, 2022-theGBJournal| The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele has said that the bank will begin the circulation new bank notes by December 15, 2022.
He disclosed this at a press conference called to inform all stakeholders and the general public of the existing concerns the apex bank currently face regarding the management of the existing series of bank notes and currency in circulation, particularly, those outside the banking system in Nigeria.
He noted that currency management is a key function of the Central Bank of Nigeria as enshrined in Section 2B of the CBN Act 2007.
‘’Indeed, the integrity of a local legal tender, the efficiency of its supply as well as its efficacy in the conduct of monetary policy are some of the hallmarks of a great central bank,’’ Emefiele said.
He also spoke about the challenges the bank’s currency management faces that impinges on its integrity including the significant hording of the bank notes by members of the public, with statistics showing that over 85% of currency in circulation are outside the vaults of the country’s commercial banks.
To be more specific, he said, ‘’as at the end of September 2022, available data at the CBN indicate that N2.733 trillion out of N3.23 trillion currency in circulation was out the vaults of the commercial banks across the country, and supposedly held by members of the public.’’
According to Emefiele, ‘’Evidently, currency in circulation has more than doubled since 2015, rising from N1.46 trillion in December 2015 to N3.23 trillion as at September 2022.’’
The CBN governor described the trend as ‘’very worrisome trend that cannot continue to be allowed.’’
The second challenge is the worsening shortage of clean bank notes with attendant negative perception of the CBN and increased risk to financial stability, and thirdly, the increasing ease and risk of counterfeiting evidence by several security reports.
He said the CBN has, in recent years recorded significantly higher cases of counterfeiting, especially at the higher denominations of N500 and N1000 notes.
‘’Although normal global best practice is for central banks to redesign, produce and circulate new local legal tender every five to eight years, our existing series of bank notes, the Naira has not been redesigned in the past 20 years.’’
The CBN governor said the bank believes the redesign of the currency will help deepen the drive to entrench a cashless economy that will be complemented by the eNaira.
‘’This will further reign in the currency outside the banking system therefore making monetary policy more efficacious.’’
He suggested that with the intended redesign, and in view of the acts of terrorism in the country, access to the money outside the banking system as source of fund for ransom demand, will begin to dry up.
He said on the basis of the facts set out, and in line with Section 2B, Section 18A and Section 19, Subsection A and B of the CBN Act 2007, the management of the CBN has sought and obtained the approval President Muhammadu Buhari to redesign, produce, release and circulate new series of bank notes at N200, N500 and N1000 levels.
‘’In line with this approval, we have finalized arrangement for the new currency to begin circulation from December 15, 2022, after its launch by President Muhammadu Buhari.’’
He confirmed that the new and existing currencies shall remain legal tender and circulate together until January 31, 2023, when the existing currencies shall cease to be legal tender.
He ordered the banks to begin returning the old notes to CBN effective immediately
He said the newly redesigned currency will be released to the banks in the order of first come basis.
He urged bank customers to begin paying into their accounts the existing currency to enable them withdraw the new bank notes once circulation begins in mid-December 2022.
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