The governor of Nigeria’s Central Bank, Godwin Emefiele on Wednesday announced plans to introduce new designs of the N200, N500, and N1,000 notes by December 15.
Nigeria’s apex bank says the policy is an attempt to bring currency from outside the banking system into the banking system, thereby making monetary policy more effective in combating inflation.
The inflation rate in Nigeria continued on an upward trend as it surged to 20.77% in September 2022, up from 20.52% recorded in August while the Consumer Price Index rose by 20.77% year-on-year in September 2022.
Mr. Emiefele while speaking on the policy revealed that “Statistics show that 85% of the currency in circulation are outside the volts of our commercial banks. Data indicates that N2.73 trillion out of the N3.23 trillion currency in circulation was outside the volts of commercial banks across the country.
“In recent years, the CBN has recorded significantly higher rates of counterfeiting, especially at the high demonization of N500 and N100 bank notes.” He added.
Emefiele also explained that the redesign of the currency is long overdue. According to him, “our existing series of banknotes -the naira, has not been re-designed in the last 20 years. The bank reasonably determined to achieve the objective of its mandate as enshrined in Section 2B of the CBN act of 2007 to ensure a strong and effective legal tender.
“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. Furthermore, we believe that the re-design of the currency will help deepen our drive to entrench a cashless economy, and a christ minting of our E-Naira will complement it.”
He also argued that government would generate revenue from the process as Nigerians wanting to deposit more than N150, 000 cash must pay a deposit fee.
The CBN also hopes that redesigning of the naira would to a certain extent help manage terrorist activities with the belief that the process of ransom payments to terrorists and kidnappers would become knotty.
Kidnapping for ransom is on the rise in Nigeria, a report by Lagos-based security and political risk research firm has shown says about N653.7 million was paid as ransom in Nigeria between July 2021 and June 2022.