Follow Us on Google
From Uche Usim, Abuja and Sola Ojo, Kaduna
Central Bank of Nigeria (CBN), Mr Godwin Emefiele, on Wednesday, disclosed that plans are afoot to unveil newly-redesigned bank notes of N200, N500 and N1,000 by December 15 this year.
He urged depositors to hit the banks to exchange their old currencies for the new ones before January 31, 2023 deadline, when the old currencies cease to become legal tenders.
Emefiele who made the disclosure at a special media briefing in Abuja, said the action already has the approval of President Muhammadu Buhari and other stakeholders.
President Buhari had done something similar in 1983 as a military head of state.
According to the Emefiele, the action, consistent with the CBN Act of 2007, also seeks to retrieve huge funds outside the banking system and restore the stability of the local currency and country at large.
The CBN Governor revealed that out of N3.23 trillion in circulation, N2.77 trillion is outside the banking system but in privately-owned vaults.
Emefiele stated that while global best practice was for Central Banks to redesign, produce and circulate new local legal tender every five to eight years, the Naira has not been redesigned in the last 20 years.
He added that currency management has faced significant challenges in recent years like; 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.
“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-First-serve 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”, Emefiele stated.
For the purpose of the transition from existing to new notes, Emefiele said 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”, he added.
The move is expected to vandalise terror funding fulcrum and force politicians and influential Nigerians to return trillions of stashed naira notes.
Reacting, Nigeria’s first professor of the capital markets, Prof Uche Uwaleke, said the decision to replace some naira denominations with new ones will be positive for the economy in the medium to long term.
“First, although the measure does not amount to demonetization of big currency notes often carried out by Central banks to curb black money and corruption, it will go a long way in ensuring that a lot of naira notes circulating outside the banks are crowded in. If it leads to large deposits in banks, it means the banks will have more money to lend which may reduce interest rates.
Meanwhile, Concern Northern Forum on Wednesday called for the removal of the Governor of the Central Bank of Nigeria Godwin Emefiele over his decision to redesign the #100, #200 and #500 notes, effective December 15, 2022.
Spokesman for the Forum, Abdulsalam Mohammed Kazeem in a statement described the move by the apex bank as idea to empower ‘boys’ as this administration winds down in a few months time.
To him, “the redesigning of the said currency will only cost our nation huge sums of money at the expense of tax payers. This is coming at a period when we are borrowing to fund significant parts of our annual budget and another significant parts of the borrowing go to debt servicesing and yet the only solution the apex bank could offer is to redesign our currency. Indeed Mr Godwin Emefiele and his entire team has completely run out of ideas and now is the time to show them the exit gate.”
