CBN Governor, Godwin Emefiele

The Governor of the Central Bank of Nigeria CBN, Godwin Emefiele has said that President Muhammadu Buhari has approved the apex bank’s request to redesign, produce, and circulate new series of banknotes at N100, N200, N500, and N1,000 levels, which are expected to come on stream December 15, 2022.

Accordingly, the new and existing currencies shall remain legal tender and circulate together from December 15, 2022 until January 31, 2023 when the existing currencies shall seize to be legal tender in the country.

Briefing newsmen in Abuja Wednesday, Emefiele noted that the redesigning of the naira notes, which have lost value, compared to other international currencies, was part of measures to curb the hoarding of the currency, saying that over 80 per cent of currencies in circulation are outside the vaults of the commercial banks.

He also cited worsening shortage of clean and fit banknotes with the attendant negative perception of the CBN and increased risk to financial stability and the increasing ease and risk of counterfeiting evidenced by several security reports.

According to him, the decision to redesign the currency was in tandem with the key statutory responsibility of the apex bank in terms of currency management as enshrined in section 2 (b) of the CBN Act 2007. He argued that 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.

He however regretted that in recent times, 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, a development that necessitated the redesigning of the naira notes.

“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 section 19 (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 finalised 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.

“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”, Emefiele said.

He enjoined members of the public to note that the present notes remain legal tender and should not be rejected as a means of exchange for purchase of goods and services.

The apex bank –boss however assured 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 Nigerian nation.