26th October, 2022
By Kadiri Abdulrahman
The Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, said the proposed move to redesign of the Naira is for it to impact positively on its value.
Emefiele said this while announcing plans by the apex bank to put redesigned N200, N500 and N1,000 denominations in circulation from Dec. 15.
According to him, though that is not the major intention for changing the currency, it can come as one of its advantages.
Emefiele said that significant hoarding of banknotes by members of the public, worsening shortage of clean and fit banknotes and increasing cases and risk of counterfeiting informed the decision.
“Statistics show that more than 85 per cent of currency in circulation are outside the vaults of our commercial banks.
“As at the end of September, N2.7 trillion out of the N3.23 trillion currencies in circulation was outside the vaults of commercial banks across the country.
“Evidently, currency in circulation has more than doubled since 2015 rising from N1.46 trillion as at Dec. 2015, to N3.23 trillion as at Sept. 2022.
“This is a worrisome trend that cannot continue to be allowed, ” he said.
According to Emefiele, recent developments in photography technology and advancement in printing devices have also made counterfeiting of the Naira relatively easier.
He said that the apex bank was determined to arrest the situation forthwith.
“In recent times, the CBN has recorded significantly higher cases 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 legal tenders every five to eight years, our existing series of banknotes has not been redesigned in the last 20 years.
“The CBN remains resolutely determined to achieve the objective of its mandate as enshrined in the CBN Act.
“It is, therefore, no longer tenable to continue with business as usual, especially given the continually evolving circumstances that could impede the optimal performance of our Naira,” he said.
He said that the step taken by the CBN to redesign the Naira would also help deepen the drive to entrench a cashless economy.
“It will be complemented by increased minting of the eNaira. This will further reign in on currency outside the banking system into the banking system, thus making monetary policy more efficacious,” he said.
He said that the step would also help to check crimes like terrorism and kidnapping.
“Access to large volumes of money outside the banking system used as source of ransome would begin to dry up ” he said.