The Central Bank of Nigeria has announced its decision to redesign the N200, N500, and N1,000 notes.
CBN Governor, Godwin Emefiele, who disclosed this at a press briefing in Abuja on Wednesday, said the new design and issues will be effective from December 15, 2022.
According to him, the action was taken in order to take control of the currency in circulation.
He stated that the apex regulator has secured the approval of President Muhammadu Buhari to roll out new notes to replace the existing currency in circulation.
“In line with the provisions of Sections 2(b), Section 18(a) and Section 19, Seb section (a) and (b) (2007), the management of the CBN has sought and obtained the approval of President Muhammadu Buhari to redesign, produce, release and circulate new series of banknotes at N200, N500 and N1,00 levels,” he said.
“In line with this approval, we have finalised arrangements for the new currency to begin circulation from December 15, 2022 after its launch by President Buhari.
He, however stated 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 a legal tender.
The CBN boss noted that once the new notes are designed, Nigerians are expected to take old notes to banks for the new notes.
Emefiele said the bulk of Nigeria’s currency notes were outside bank vaults and that the CBN would not allow the situation to continue.
“To be more specific, as of the end of September 2022, available data at the CBN indicates that N2.7 trillion out of the N3.3 trillion currency in circulation was outside the vault of commercial banks across the country and supposedly held by members of the public”, the CBN boss said.
He further noted that currency in circulation has more than doubled since 2015, rising from N1.46 trillion in December 2015 to N3.2 trillion as of September 2022.
” I must say that this is a worrisome trend that must not be continued to be allowed.”
He expressed optimism that the initiative by the CBN will help address some of the nation’s security threats, especially kidnapping and terrorism, noting that terrorists and kidnappers capitalise on the large excess of money to carry out their nefarious activities.
Read Full Text of Emefiele’s Speech Below:
*PRESS REMARKS BY GOVERNOR GODWIN EMEFIELE ON ISSUANCE OF NEW NAIRA BANKNOTES*
Good afternoon Ladies and Gentlemen, and welcome
to this special press briefing of the Bank. We have called this gathering to inform relevant stakeholders and the general public of persisting concerns we are facing with the management of our current series of banknotes, and
currency in circulation, particularly those outside the
banking system in Nigeria.
As you all may be aware, currency management is a
key function of the Central Bank of Nigeria, as enshrined in Section 2 (b) 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.
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. These challenges primarily include:
▪ Significant hoarding of banknotes by members of
the public, with statistics showing that over 80 percent of currency in circulation are outside the
vaults of commercial banks;
▪ Worsening shortage of clean and fit banknotes
with attendant negative perception of the CBN
and increased risk to financial stability;
▪ Increasing ease and risk of counterfeiting
evidenced by several security reports.
Indeed, recent development 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.
Although global best practice is for central banks to
redesign, produce and circulate new local legal tender
every 5–8 years, the Naira has not been redesigned in the last 20 years.
On the basis of these trends, problems, and facts, and in line with 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 N100, N200, N500, and N1,000 levels.
In line with this approval, we have finalized arrangements for the new currency to begin circulation
from December 15, 2022. The new and existing currencies shall remain legal tender and circulate together until January 31, 2023 when the existing currencies shall seize to be legal tender.
Accordingly, all Deposit Money Banks currently
holding the existing denominations of the currency may
begin returning these notes back to the CBN effective
immediately. The newly designed currency will be
released to the banks in the order of First-come-Firstserve basis. Customers of banks are enjoined to begin paying into their bank accounts the existing currency to enable them withdraw the new banknotes once circulation begins in mid-December 2022. All banks are therefore expected to keep open, their currency processing centers 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.
We would like to use this opportunity to reassure the
general public that the CBN would continue to monitor both the financial system in particular, and the economy in
general, and always act in good faith for the achievement
of the Bank’s objectives and the betterment of the
country.
I thank you for listening.
*Godwin I. Emefiele*
Governor